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Quitting Your Bank: Easier Said Than Done?

NEAL CONAN, host: Maybe it's new fees. The Bank of America recently decided to charge $5 a month to use a debit card or maybe it's just the size of the institution you bank with. If you decide to change for whatever reason, well, it may not be so easy. If you've tried to break up with your bank or have questions about doing that, give us a call, 800-989-8255. Email us, talk@npr.org. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.

Ron Lieber joins us from his office at The New York Times, where he's the "Your Money" columnist and editor of the "Bucks" blog. Nice to have you with us today.

RON LIEBER: Thanks for having me on.

CONAN: And I think once you've established direct deposit, where your paycheck goes directly into your account, well, all that's very convenient, but it makes changing a lot more difficult.

LIEBER: It does, although, you know, direct deposit, I mean, that you change with one form. I think the real issue here is that, you know, people have gotten used to having their credit card bill paid from their bank account and paying their utilities and maybe there's a direct connection between the school or a tuition payment plan. And, you know, by the time you're done, you've got 10 or 12 different tentacles into the account, and you start to believe that it's going to be really complicated to extract yourself.

CONAN: And does it - is it not complicated?

LIEBER: Well, you know, it depends on how you look at it. I mean, I actually put a stopwatch to this the last time I did it a couple of years ago. I had somewhere between 10 and 15 automated payments and direct deposits to various sorts that I needed to change, and it took me a little under two hours. So, you know, it involves some effort and some, you know, thinking about it ahead of time and, you know, making of lists to make sure I got everything done. And then the other thing you have to worry about is that, you know, sometimes, for a month or two afterwards, it takes various billers time to switch over.

So sometimes, they may be taking money out of one account when you think they're taking money out of another. So you need to leave some money in both places just to allow for that, which can be tough for people who are living hand to mouth.

CONAN: And if you're juggling - yeah, that could be difficult. It's also - if it's a big payment, like your mortgage or your housing payment, that can be scary.

LIEBER: Yeah. I mean, you better be sure it's going to or from the right place. I mean, another way to do it is to cut off automated payments, start paying with checks for a month or two and then restart them from the new account once everything has moved over and you're sure nobody is drawing from the old account. That's another way you could go at it. So, you know, it's not a small thing, but it's not impossible, either.

CONAN: Not impossible but isn't inertia the reason that a lot of banks maybe not worried about - there's this change-your-bank movement on Facebook. I'm not sure the big institutions are that worried about it.

LIEBER: Right. I think they're counting on the fact that people are believing, you know, everything that they might be hearing about the fact that it's going to take them a really long time. They don't want people like me coming out and putting a stopwatch to it and saying hey, you know what, it will take you 100 minutes. Well, it only took me 72 minutes because I have six accounts. They're just hoping that, you know, people will throw up their hands and be willing to pay $5 a month or $60 a year, you know, out to eternity to spare themselves the hassle of changing. And, you know, you have to decide how much it's worth to you.

CONAN: And are - well, I mean, there is the big banks, you know, Bank of America, PNC, we all know their names, Citibank, those that have an ATM machine and seemingly on every other corner in a lot of places. Are there distinct advantages to being with big banks like that?

LIEBER: I don't think the ATM machine is the advantage. A lot of online-only banks will reimburse you for some or even all of your ATM fees no matter which ATM you use. Some of them also contract with a network of, you know, sort of the no-name ATMs that you often see in the drugstore, and you can get yourself an, you know, iPhone app or at least go to a website that tells you where those ATMs are where you can take money out for free. And often, they have more ATMs than even the biggest banks do.

So I don't think that's the issue so much. I mean, some people will convince themselves that they absolutely need to have access to a teller just in case. But, you know, I haven't banked with a bank with branches in almost 15 years now. And anytime I need help, I just call the friendly people on the telephone, and, you know, they do want needs to be done. So I haven't missed having bank tellers in my life.

CONAN: Well, let's get some callers in on the conversation. Our guest is Ron Lieber, the "Your Money" columnist and editor of the Bucks blog at The New York Times. We're talking about breaking up with your bank. If you had experience with that, if you tried it, if you have question about it, give us a call. 800-989-8255. Email us, talk@npr.org. Let's start with Tina with us from Pensacola.

TINA: Oh, hey. How are you doing. We're currently gotten out of Bank of America and going to local. They represented payee. My daughter's on SSI with electronic deposit. There was one number wrong, and we're working through a mess right now. But it's, hopefully, going to get straighten out.

CONAN: Supplemental Social Security is SSI?

TINA: Yes. She's got Down syndrome. They represented payee, so we're - they had one number wrong. We're getting it worked out, hopefully.

CONAN: And I should - boy, that - but that's scary if you start losing the payment there. It's mislaid for a month or two.

TINA: Well, they're going to cut - right. They were going to cut her off, and then we had - I had to go leave work two times to go take care of it at the local office, so...

CONAN: But...

TINA: ...hopefully, it will be straightened out.

CONAN: And what advantage do you see after the move is complete?

TINA: We are very unhappy with Bank of America and what's been going on, so we want out.

CONAN: I want out. OK. Good luck, Tina.

TINA: Thank you. Thank you. Bye-bye.

CONAN: Appreciate the phone call. That terror, the typing in one wrong number, and, boy, the whole world goes haywire for awhile.

LIEBER: It happens, right? And that's something you need to be careful of, but it may not be your error. It may be the error of somebody who's, you know, inputting the change of accounts form that you do. So you do need to be vigilant about this. You know, you need to look at your new account online and make sure that everything is working the way that it's supposed to. Look at the old accounts before you close it and make sure that nothing is being drawn from there and keep an eye on it.

CONAN: And obviously, you need to open that new account before you close down the first one.

LIEBER: Yes. It should not go without saying, right, that you - that the accounts are going to be - or your two accounts are going to be open simultaneously, right? And you want to make sure that everything is done with the old account before you close it down and that everything is being drawn from the new accounts before you finish the old one off.

CONAN: And if your - for example, your paycheck is directly deposited into the bank, you want to change that at the - just after the first of the month to give it a little time to get through.

LIEBER: Exactly. And, you know, you want to time things so that, you know, your paycheck is where it's supposed to be, you know, in the new account when the billers start drawing on the new account. So the paycheck should be the first thing that you change just to make sure that that money is landing where it needs to be to pay your bills.

CONAN: Let's go next to Steven(ph). Steven on the line from St. Louis.

STEVEN: Hi there.

CONAN: Go ahead, please.

STEVEN: Yeah. I'm also pushing away from USA. My general reasoning being the credo of too big to fail is too big to exist. But I'm switching over to USAA personally. Thankfully, I don't have too many that are going direct debit out of my USAA account - or sorry - my Bank of America account. So it's not that troubling for me. The troubling thing is the timing because I got my mortgage getting withdrawn every two weeks from another bank, and I need to make sure I pick those up just right. Otherwise, somebody is going to be really mad at me.


CONAN: Yeah. And somebody being really mad at you can have some consequences, too, can it?

STEVEN: Yeah. I really don't want my credit score to suffer because of it.

CONAN: And I think, Ron Lieber, that's something that people really worry about if they mess up their credit card payment or the mortgage payment that, all of a sudden, their credit score is going to plummet.

LIEBER: Right. Exactly. I mean, with the mortgage companies, you usually have some kind of a grace period before they ding your credit score. But this is the perfect sort of scenario where, you know, you can say to somebody like this, well, you don't have to snap your fingers, stop the every two-week payment over here and start it immediately over there. You can have the pause button, pay by check for a month or two and make sure the new account is up and running and make sure your paycheck is landing, and then restart, you know, the every two-week draw on your bank account from the new account once you're sure that everything is there in shipshape. So, you know, you don't have to do this all at once. Yeah, it make take 90 minutes or 120 minutes, but maybe you spend 60 minutes on it to first get it set up. And then two months later, is when you switch everything over once you make sure your paycheck is landing and everything is working.

CONAN: Steven, good luck.

STEVEN: Thank you.

CONAN: Here's an email from the Reverend Moise(ph) in Baltimore. I really want to leave BOA because the fees are outrageous. I'm concern about doing that because BOA is everywhere and very convenient. I don't want to be slammed by out-of-network ATM fees if I choose a bank with just a few locations. Any advice?

LIEBER: Well, there it is with the ATM fee again, right? I mean, one thing for people to think about, right, is that, you know, it's - they're going to charge you $5 a month at the Bank of America if you want to use your debit card. And, you know, if you hit, you know, more than three out-of-network ATM fees - out-of-network ATMs in a month, then your ATM fees at the new bank are going to start to be more than $5 a month. You really haven't gained anything, right? So you need to figure out, OK, where do I work? Where do I live? And when - which institution is going to give me a break on my ATM fees, if any?

See, the things with all of the banks that only exist online - and this is something that, you know, community banks don't necessarily do. The online-only banks have to find a way around this ATM problem. They know it's an issue. They know that there are people like the reverend who are raising this. And so, again, they arrange to reimburse you for a certain number of ATM fees a month, or they arrange to reimburse you for every ATM fee a month. Or they partner up with a network of ATMs where you can take money out for free, and you just need to check before you sign up with an institution what their policy is and whether there are free ATMs that are convenient to you.

CONAN: And I know that there is really no difference, but was there a moment when you switch to the online bank - I mean, the idea that there was a branch down there you can go and talk to somebody, the feeling of solidity. Yes, all of this is done electronically now anyway, but was there a moment of hesitation when you switch to the online bank?

LIEBER: Not for me. You know, the best argument I've heard against us, and this came up especially in 2008, was that, you know, people want to know that they can run down the street and yank all of their money if, you know, the world is ending or (unintelligible).

CONAN: Jimmy Stewart's waiting there to pay you out.


LIEBER: Right. Right. Or if, you know, the bank is days away from going out of business. But, you know, again, the thing you have to remember is that, you know, we have FDIC insurance. We have federal insurance for a reason, right? And so if things are going awry with the institution, you're going to get your money back. Now, you may not be able to get it back instantly. I mean, you know, it may take a day or two, or in a worse case scenario, maybe a couple of weeks. So, you know, some people have that sort of apocalyptic concern, and it's hard to argue against that. But, you know, I didn't have a moment's hesitation and, you know, I haven't missed it for a moment.

CONAN: We're talking with Ron Lieber, "Your Money" columnist at The New York Times. You're listening TALK OF THE NATION from NPR News. Let's go next to John. John calling from Oakland.


CONAN: Go ahead, John.

JOHN: Hi, Neal. I switched over a few months ago from Wells Fargo because I was fed up with all the fees and the bad service. I switched to the credit union that my wife has been with for years and I love it. I recommend it to anyone. And the switchover was a little bit of a pain but the thing that makes it easy - that made it easy for me is to be able to have some extra cash around, to have some cash in the new account for the auto-pay things without having emptied out the old account. It just made it all a little easier to make that transition if you had an extra couple of thousand dollars around. So that - I worry for people who are trying to make the switch who are living from paycheck to paycheck and don't have an extra few dollars to have in the account. Then their timing has to be perfect. That might be more difficult.

CONAN: Exquisite. And have you experienced any diminution of service by going to...

JOHN: The service is - no. The service is much better. I get much better service. It's a credit union. It's not strictly an online, but they have an online presence. There are people. If I want to talk somebody, there's somebody to talk to. There - actually, I have an occasion to research some old records, and they were better able to do that than the big bank was. The service is better, if you ask me. There are fewer ATMs, but credit unions have cooperative agreements, so I don't have to go to my own credit union. I can go to any credit union and get an ATM withdrawal without any fee. So that's a plus. (Unintelligible).

CONAN: All right, John. Thanks very much.

JOHN: I recommend it to anyone. They should make the switch.

CONAN: OK. Thanks very much. He may be working for a credit union. Ron Lieber...


CONAN: ...do they pose any advantage?

LIEBER: Only when they put their tots on the radio.


LIEBER: No. No, no, no. Look, you know, the biggest advantage with the credit union is that the profit motive isn't necessarily there, right? They're not reporting to shareholders. They're reporting to members. And so, you know, either rates tend to be better, you know, the interests rate that you got maybe on your checking accounts. But, really, it's borrowing where the deals are often better, you know, car loans, some home equity lines of credit. Credit cards to credit unions, they tend to be better deals. And, you know, in this particular day and age, the idea of being part of an institution that reports essentially to its customer, as opposed to a shareholder or somebody else, it's appealing to a lot of people, so, you know, I understand that appeal.

CONAN: Let's go next to Matt. Matt on the line from Denver.

MATT: Hi, there. I just wanted to give the perspective of somebody that actually works in banking. I mean, I would like to respectfully disagree with your guest in that the online banks have the advantages to be of the convenience and whatnot. There's a lot to be said about developing a relationship with someone. I mean, I know most of the customers that walk into my branch by face. I know what's going on with them. I can use an example of a customer that lost his wallet out of state, and we were able to make things right for him because we knew who he was. And you don't - you can't get that same level of service and meeting of your needs with these online banks because there's a level of impersonality there.

And the other thing is, we're able to make those recommendations. We know what's going on and so that I - fair enough that if someone wants to fire their bank, but shop around and find out what works for you, what works for your finances, but also what kind of service are you going to get because this is something that these online banks, these impersonal banks can't really provide.

CONAN: Well, a lot of people would say something the size of a Bank of America - I don't know which bank you work at, Matt - but that can be pretty impersonal too. But, Ron Lieber, let's get to your point of view.

LIEBER: Yeah. I have no doubt that Matt and, you know, thousands - tens of thousands of people like him out there at large banks and small banks across the nation provide excellent service in person to people who walk in every day. I have no doubt that that is the case. However, it is absolutely incorrect to say that online banks cannot provide that same service. I've experienced it myself, lost my wallet at 5 a.m. at LAX a couple of months ago. It disappeared in between the rental car shuttle and the terminal. And my online bank got me my new ATM card before all of my credit card companies got me my new credit cards. It was totally hiccup-free. I was able to get right through, and it just is not the case to say that an online-only bank, you know, can't provide personal service or at least speedy service. I mean, it was just not a problem.

CONAN: Matt, thanks very much for the call, and we appreciate it. Ron Lieber is the "Your Money" columnist, editor of the Bucks blog for The New York Times. There's a link to the article he co-wrote, "Question: Why Pay Banking Fees?" on our website. Go to npr.org, click on TALK OF THE NATION. He joined us from his office at The New York Times. Thanks very much.

LIEBER: Thank you.

CONAN: Tomorrow, Political Junkie Ken Rudin joins us with, of course, a new trivia question. This is TALK OF THE NATION from NPR News. I'm Neal Conan in Washington. Transcript provided by NPR, Copyright NPR.