The Long-Term Relationship You Just Can't Quit

The Long-Term Relationship You Just Can't Quit
The Long-Term Relationship You Just Can't Quit

It's an abusive relationship and you'll probably never end it. Time and again your partner takes advantage of you. You lost trust a while back. You don't even expect any satisfaction anymore, but it's been going on so long you just can't break away.

No, not your spouse. I'm talking about your bank.

For all the anti-bank anger erupting across the country lately, relatively few of us are actually parting ways with our significant financial institutions. In the past six weeks a mini bank-run sent 700,000 new customers to credit unions, according to the credit unions' trade group. But that's hardly noticeable on the scale of the universe of U.S. banking customers. Analysts predict that the percentage of people changing banks in 2011 could edge up to 10%. That's only a slight lift from 8.7% in 2010, according to a retail bank survey earlier this year from J.D. Power and Associates. Momentum is building, to be sure, but it's not yet significant.

Sometimes it seems like it's easier to walk away from a marriage than a bank account: After all, spouses don't have an entire team of MBAs working to make sure you never leave. And face it, your whole life is tied up with the conveniences of big banking: Your paycheck is deposited, your bills are paid, that quick trip to the ATM is right across the street. Maybe even your alimony and child support are on auto pay.

It's not actually easier to get divorced, of course. Far more people are leaving their banks each year than are leaving their partners. But it's not for want of trying on the part of the financial institutions.

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Banks invest hundreds of dollars per customer to make your relationship to them last and grow: new products, savings rates, rewards programs, overdraft protections, credit cards, mortgages, home equity loans, bill pay, direct deposit, weekly letters, pens and free lollipops. It works too. A typical banking customer reports having an average of 2.7 "banking products" from their primary institution, according to J.D. Power and Associates.

Worse yet, many people can't even afford to leave their bad bank marriage. That resentment-building $10 monthly checking account fee -- some of which goes to pay for the shiny new branches you see all over town -- may be the price one must pay to avoid a huge, and potentially disastrous, transfer of a whole system of electronic payments and credits.

At least 42% of all American workers lived paycheck to paycheck last year, according to a survey. Increasingly, those funds are delivered electronically through direct deposit. Bills like credit cards, mortgages, rent, student loans, utilities, cable -- not to mention regular subscriptions like Netflix -- are increasingly tied to checking accounts via automatic bill pay.

How do you divert a paycheck next month into a new account while making sure all the bills get paid for last month? It's tricky to choreograph when you live close to the bone. And banks know that.

"The bottom line is that you can't move the account if you don't have extra cash to leave behind for two months," Hank Israel, a director with consulting firm Novantas, told The New York Times last year in an article on switching banks.

It is a lot harder to change something than it is to not change it. In behavioral finance this is called the status quo effect. Plenty of bad marriages -- and bad banking relationships -- have lasted many decades on this principle.

Of course, bad behavior from a bank is easier to ignore than that from a spouse. You can leave statements unopened, but you can only hide from your significant other for so long without severe consequences.

"Banks are just caretakers, they don't have opinions. Spouses have opinions," says Maggie Baker, a clinical psychologist and author of Crazy About Money. "You don't get into an argument with your bank account."

Catherine New can be reached at