Advice on how to choose a good bank

To start, look for an “FDIC” or “NCUSIF” sign is on the door. State and federal regulators provide consumers a lot of protection, both as insurance and information. Private financial watchdogs provide information as well.

The Federal Deposit Insurance Corporation and the National Credit Union Share Insurance Fund insure individual accounts up to $250,000. The FDIC boasts that no one has lost a penny on an insured deposit since the agency was created in 1933.

“Is my money safe? Yes, it is,” says Joe Brannen, president and CEO of Georgia Bankers Association. “You can take that out of your worry box.”

That’s no small matter given the instability in the banking industry — 16 Georgia banks have gone under this year alone, 46 since 2008. On the up side, other institutions have acquired the failed banks and the process has gone smoothly, Brannen says.

“We are not hearing of any interruption in service. It proves the system works,” he says.

Nevertheless, being forced into an arranged marriage with a bank can be unnerving to customers. This past week, the name Wachovia disappeared for good. Wells Fargo purchased the venerable North Carolina-based institution two years ago as it teetered on collapse.

To help consumers navigate this landscape, the FDIC or the National Credit Union Administration (NCUA), as well as a bank’s principal regulator, can provide information on the health of an institution.

The Georgia Department of Banking and Finance oversees state chartered banks, for instance, while the Office of the Comptroller of the Currency oversees nationally chartered banks.

Non-governmental sites such as bankrate.com and moveyourmoney.info also keep tabs on institutions.

Another way to learn about a bank’s stability is to research which banks are taking over failed banks.

The FDIC posts a list of failed banks every week. The NCUA has a similar site that tracks failed credit unions.

But, your bank “worry box” should cover more than an institution’s financial health.

The Center for Responsible Lending, a consumer advocacy group, recently published its Shopper’s Guide to Better Banking that delves into everything from checking account practices to cash advances.

“People were pretty upset with banks after the bailout and they didn’t know what to do,” said Kathleen Day, a spokesperson for the group. “One movement said, ‘Move your money.’ The problem is, a lot of bank products look the same. Now, with a lot of the new rules in place, we are beginning to see some differences.”

One of the biggest changes has been in the debit card arena. To better protect consumers, the Federal Reserve Board now prohibits banks and credit unions from offering — and charging for — overdraft coverage for debit card and ATM transactions unless their customers consent, or “opt in.”

Many consumers have passed on overdraft coverage, choosing to have their transactions declined, thus incurring no fee, when they don’t have enough money in the bank.

In March, Bank of America, the country’s largest bank, announced that it would stop allowing customers to overdraw their checking accounts with their debit card transactions. The bank said that’s what its customers want.

Among the questions in Center for Responsible Lending’s guide:

● When I make a deposit, will you credit my account as soon as possible so I won’t get unnecessary overdraft charges?

● For those who do opt in to overdraft coverage for debit card transactions, is there a limit to how many times per day, month or year you charge a fee?

● How would you determine my ability to pay back a direct deposit advance on time without reborrowing?

“We want people to really start asking questions,” Day said. “The more questions, the more banks will think about what products they offer. That will make the market more competitive and benefit consumers.”

For more information on how to choose a financial institution, consider visiting these sites:

Tips for choosing a bank or credit union?

Sources: Better Business Bureau, Center for Responsible Lending, Georgia Bankers Association

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