Leigh Lumley, 74, opened his checking account at Bank of America (BAC) in 1978. On Thursday, he closed it. The retired insurance salesman who lives Salem, Ore., moved his banking business to nearby SELCO Community Credit Union.

"It's an economic thing," he says about not wanting to add a $60 annual debit-card fee on top of his $12-per-month checking account cost. "I give my regrets to them."

Credit unions, mid-size banks and online institutions are eagerly stepping up to capture banking customers who are fed up with increasing fees at the biggest banks. And so far, it seems, those big banks don't mind losing their business.

Ron Shevlin, a senior retail bank analyst with the Aite Group, says that losing a small percentage customers may not even matter too much for the biggest banks. The recent rush that some of the largest credit unions are experiencing, including a boom in account openings at the Navy Federal Credit Union and BECU, represents an extremely small fraction of the biggest banks' customer base.

"[Big banks] are really trying to cull the bottom of their barrel," Shevlin says. "They are looking at their customer base and have to find ways of making it more profitable."

Even as as the biggest national banks shift increasingly into a pay-to-play model, regional banks and credit unions -- by design or coincidence -- are gearing up to absorb the fleeing customers. New promotions and products are creating competitive incentives for bank switchers, and could offer some good values to customers looking for more rewards, no fees and high-yield checking accounts.

Smaller Institutions, Bigger Incentives


EverBank, headquartered in Jacksonville, Fla., is offering $60 cash to bank switchers who open a high-yield checking account with them by the end of November. That the incentive amount is the same as what Bank of America is charging for annual debit card use is coincidental, says Frank Trotter, president of EverBank Direct.

Meanwhile, the Randolph Brooks Federal Credit Union is offering to pay customers 15 cents back on every debit card purchase. Bethpage Federal Credit Union in Long Island, N.Y., is offering free-for-life accounts to new customers who open a Bethpage Bonus checking account. Cleveland-based Key Bank rolled out its Key Rewards Program in late September, which gives rewards to customers for doing things like direct deposit or using ATMs for banking.

"The timing is very fortunate for us," says David Bowen, Key Bank's director of consumer products.

Meanwhile, it is hard to miss Capital One's (COF) campaign for it's new "5x" High-Yield Checking Account, which was launched in September.

With its catchy celebrity ads starring Jerry Stiller, the bank is making an aggressive push to grab upwardly mobile customers who can afford to carry a $5,000 monthly balance. While the campaign is part of a longer term growth strategy, the timing of it underscores a sentiment prevalent in the consumer outcry: Checking accounts should be working for you, not charging you.

Sexy marketing like "five times the national interest rate" might be ear-catching, but in reality, the national interest rate is pretty low, and five times that is not an extraordinary return. And expanding a basic checking account at a bank that offers rewards for online banking and direct deposits could leave you hooked in deeper than you'd have planned.

But for a banking customer like Lumley, no extra bells and whistles were wanted -- or needed -- to make the switch. He just wanted a plain, simple checking account that aligned with his personal finances and affordability.

"The people in Charlotte are going to lose a lot business," he says. "They don't understand the ramifications in the board room."

Catherine New can be reached at catherine.new@huffingtonpost.com.


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