By Bridget Sullivan Mermel, CFP®, CPA Chicago, IL

People of all political stripes are exploring the= advantages of using local banks and financial institutions. “Breaking up with your bank” doesn’t have to be difficult if you follow these four suggestions.

Suggestion 1: Stop auto-pays originating from your current bank account

The big banks focus on convenience; they were the first to figure out that online banking makes it more difficult to leave the institution. Banks have found that if you have a lot of auto-pays set up through online banking, it’s tough to switch banks.

To prepare for the breakup, stop auto-pays; paying everyone manually through your online banking system is fine. Consider getting regular paychecks instead of direct deposits. Or find out what your payroll department will require for you to change the direct deposit of your check. Once you have switched to a new bank and feel good about it, go ahead and start up the auto-pays again.

Suggestion 2: Explore your local community banks

Local community banks are privately owned local banks, which means they take deposits and loan them out to the local community. Large national banks may do some community lending, but with local community banks your dollars on deposit should help the local economy, not trickle off into corporate Never-Never Land or the derivatives market.

You can usually find a local community bank that is convenient to where you live or work. Online banking will probably be available, perhaps with an interface that seems more basic than with the too-big-to-fails. When I got fed up with my big bank, I checked the ratings on www.yelp.com before picking North Community Bank in Chicago for a lot of my banking.

Suggestion 3: Investigate credit unions

Credit unions are created when groups of people pool their resources, hire a manager to run the operation, and provide their own financial services. Credit unions are owned by their members and can limit their membership. They are run typically in a straightforward manner with transparent agendas. They’re not trying to lure you in and extract fees. They’re trying to provide the best service to the most members.

Often credit unions originate with employers. I’m still a member of Summit Credit Union in Wisconsin, which I joined because my coworkers at my part-time job working for the state government when I was in college told me it was a good deal. Other credit unions have geographic boundaries. Try this website to help you locate a credit union that might work for you: www.findacreditunion.com.

Suggestion 4: Find a community development bank

Just add “development” to a community bank, and you have another type of bank. Community banks lend money to the community at large, whereas community development banks focus their lending on people who don’t have access to regular banking. In other words, they reach out to the economically disadvantaged.

Community development banking has taken off since legislation that encourages it was passed in the 1990s. It represents a rapidly growing sector of banking, but there are far fewer community development banks than either community banks or credit unions. Although the FDIC insures deposits up to $250,000, this type of bank typically lacks some of the convenience factors of other banking institutions.

For a list of major community development banks, check http://en.wikipedia.org/wiki/Community_development_bank.

For many people, the ideal would be banking at a community development bank down the street. Unfortunately, most people don’t have that available. Like many decisions, picking a bank requires striking a balance between idealism and pragmatism.