Unit banking refers to a banking system in which banks remain stand-alone organizations and are forbidden by law to open branch offices. Banking institutions tend to look toward branching out or merging with other banks to diversify risk, but many United States banks were unable to do so until the passage of deregulation legislation in the 1990s. Prior to that time, about one-third of the states had various forms of unit banking or branch office laws in effect.Continue Reading
Before deregulation, many of the Midwest states, such as Illinois, Iowa, Kansas and Minnesota, maintained strict unit banking laws that limited a bank to a single office. The rationale behind many of these state laws has been attributed partly to a traditional distrust of large banks within regions of the U.S. that contain large communities of farmers.
The smaller, local bank was viewed as an institution that could be counted on to be more responsive and sensitive to the needs of local communities. However, stand-alone banks faced a disadvantage in their vulnerability to the ups and downs of their regional economies, and were unable to offset their losses by the profitability of branch offices in regions not affected by a localized downturn.
Critics of large, consolidated banking organizations claim that the diminishing number of small, localized banks will make it increasingly difficult for small businesses to acquire the funding they need. An additional criticism of large financial institutions is that they will grow and develop into corporations that are "too big to fail." The phase is a euphemism which reflects the significantly negative impact that the organization's failure would have on the greater economic system, and the need for a federally-funded rescue to prevent severe harm to the overall economy.Learn more about Banks
To choose the right bank for your business, determine the financial needs of your business, compare the kinds of services and corresponding fees each prospective bank offers, research the background of potential banks, and ask other business owners about relevant business banking experiences, recommends the U.S. Small Business Administration. Select a bank that meets all of your business requirements, offers excellent customer service and makes you feel comfortable.Full Answer >
According to Teach-ICT.com, information and communication technology is used by banks for ATMs and online banking as well as storing information on the magnetic strip of a credit or debit card. Banks also use ICT to clear checks and handle electronic and international bank transfers.Full Answer >
Some banks that offer online-only banking include GoBank, Ally, Charles Schwab Bank and PNC’s Virtual Wallet. These online banks offer convenient services and highly mobile banking tools for customers.Full Answer >
Several banks offer online banking and checking account services to their customers, including well-known banks like Bank of America, Chase and U.S. Bank, according to their official websites. With online banking, customers can conveniently use the Internet to conduct banking activities and account management.Full Answer >