Considering a bank change?

Most people choose a bank or credit union early on and stick with it through good times and bad. Change is tough, after all, especially when it means signing legal documents, getting new credit cards and checks, and remembering new passwords.

But more banking customers are fed up with higher fees and 800 numbers, huge banking salaries and profits, and a sense that giant banks may not only be “too big to fail” but also “too big to care.” They’re looking for alternatives to the “too big” without the disadvantages of the “too small.”

Even in an era of financial consolidation — Vancouver-based First Independent Bank announced last week its pending sale to Sterling Savings Bank of Spokane — consumers have a wide array of choices for financial institutions. Last weekend’s grass-roots Bank Transfer Day, a response to Bank of America’s now-aborted plan to charge a $5 monthly fee on debit card use, focused public attention on those options. Credit unions, both locally and nationally, reported a spike in new memberships as some people sent an angry message to the nation’s financial brokers.

“At the end of the day, I am sick of supporting organizations (that) are more than willing to throw people out of their homes, destroy lives and only focus on the bottom line,” said Vancouver resident Jason Williard, who recently left Bank of America.

But Williard, like most consumers, measured his own best financial interest when deciding where to move his money. He opened an account at Portland-based Umpqua Bank after searching for an alternative that was “small enough to care but big enough to be convenient.”

For those considering a change, the conventional bricks-and-mortar choices break into three categories: national banks, local or regional banks, and credit unions. Each offers advantages and disadvantages, depending on individual financial circumstances. Consumers also can weigh financial institutions’ role in the community through charitable donations, volunteer time or support for community-based events.

Then there’s the fundamentally different structure of banks and credit unions. Banks are easily understood: They are businesses, albeit heavily regulated ones, with a goal of making a profit for their investors. “They are a business and should be making money,” said Richard M. Riccobono, director of banks for the state Department of Financial Institutions. “You can’t go giving away your services.”

Banks are in a tight spot, he said. Congress has limited reimbursements banks receive from merchants on purchase transactions. They’ve long offered services such as free checking that was financed on the backs of people who paid high fees for late payments. But new laws have reduced the potential revenue from those fees. Still, Riccobono said, banks have been profitable in part because they are offering very low interest rates to customers.

Credit unions operate under a more obscure organizational structure. They were originally designed for large employee groups, such as teachers or railroad employees, but most are now open to the public. They are legally structured as cooperative, with members instead of customers. Those who join pay a small membership deposit or fee into their savings account, which may or may not be returned when the account is closed.

Credit unions offer a populist pitch that they’re accountable to members, not to investors. “We do not have the short-term pressures of making a profit for stockholders. Instead, we look longer term at the overall membership’s benefit,” said Colleen Boccia, senior vice president of marketing and chief deposit officer for Vancouver-based Columbia Credit Union.

The message sees to resonate in Washington, which has 64 in-state credit unions and others based outside the state with branches here. They are widely popular, holding 20 percent of the state’s deposits in financial institutions, said Linda Jekel, director of credit unions for the state Department of Financial Institutions. The Credit Union National Association, a trade group, reported, that Washington credit unions attracted 1,430 new members out of 40,000 new members nationally on the Nov. 5 Bank Transfer Day.

Vancouver residents Liz and Jesse Weiss decided to leave Bank of America for iQ Credit Union because they felt the bank was taking unfair advantage of clients with the least financial resources. The couple, both of whom are bartenders, complained that Bank of America charged them $14 whenever their account went below a certain balance. “If there wasn’t enough money in the account for the charge, then there also was a $35 overdraft fee. It was just terrible,” said Liz Weiss.

The couple transferred their money to iQ based on recommendations from friends and say they are happy with the credit union’s services. The act of switching also was one way she and her husband felt they could effect change, Liz Weiss said. “For us, it’s the best way to show we care,” she said.

Yet banks push back, noting that credit unions are exempt from federal income tax and Washington’s business and occupation tax that help finance government services. Vancouver-based Riverview Community Bank said it has paid more than $1.1 million of those taxes so far this year, and more than $6.5 million during much healthier times in 2007. Riverview and others local and regional banks are promoting themselves as the best community-oriented alternative for those who have complaints about national banks.

“I think if you measure the impact in the community from a sponsorship, from a tax base, from an overall involvement in the community that pound-for-pound, community banks make a much bigger impact than credit unions,” said Ezra Eckhardt, president and chief operating officer of Sterling Savings Bank, which will complete its acquisition of First Independent Bank early next year.

Even if cost, convenience, service, and personal values all tip the scales in favor of change, the hassle of change often weighs in favor of the status quo. James Edmondson, a former Vancouver resident recently relocated to Utah, has decided he’ll stick with JP Morgan Chase.

“Most of the services are free, so there is no reason to leave. I’ve had a really good experience with their tellers and their management,” he said. But that’s not the only reason.

“Part of it is inertia,” Edmondson said. “I’m too lazy to move.”