As Regulations Increase, Small Banks Close Their Doors

Bigger is not always better. However, in a tough economy small banks are often left with no choice but to go out of business. rnA bigger golf score is definitely not better. A larger student loan that has to be paid back is not better. Sometimes, small can be good.rnIn terms of banking options, some might believe that going with a larger bank would be a better option than going with a small bank, but this is not always the case. It all depends on the kind of banking relationship that you are looking for. rnSome people like to feel a personal connection to their bankers. These people would probably want to go with a smaller bank. Other people may need access to their accounts from all over the world. These people would be better off with a larger bank that has many branches and locations from which they can be granted access without any hassles. rnHaving multiple branches from your bank is the biggest advantage of choosing the large bank over the small bank. This allows for less stress if you need money while out of town traveling or if you are moving to a new city or state. If you are relocating, you will also not have to change bank accounts and numbers. As a result of more branches, you are likely to also have more and better ATM coverage provided by your banking company, which translates to fewer service charges to use ATMs and a greater chance that you will find an ATM from your bank. rnThe downside of a large banking corporation is having little to no personal connection with the tellers and bank employees. It is likely that you will not work with the same person more than once. Additionally, larger banks typically tend to have more fees than smaller ones do. rnSmall banks offer their customers a great deal of personal attention. You are more likely to be known by name here than at a big bank. The connection between bank employee and bank customer is stronger and on a more personal level. Here, you are more likely to speak with an executive when dealing with loans; whereas, this is a very rare occurrence with the big corporations. rnWe all know the economy is not where we would like it to be. Everyone is tightening the grip on purses and wallets. Even banks are cracking down on loans. Or, rather, new regulations are forcing them to crack down on their customers. These new regulations are more difficult for smaller banks to adjust to than for big banks. rnBank regulations are put forth by the government. Currently, the government is subjecting banks to new, more stringent requirements, restrictions, and guidelines. These new rules can be too much for the little guys and, as a result, many are closing their doors.rnOne such bank, in Medina, Ohio, had had enough of the new regulations. The chief executive of this bank, the Western Reserve Bank, sold the company at the first offer he got. This is not the first community bank to lead by this example. If there are more regulations to come, it certainly will not be the last of them to close up shop, either.