Many Americans are quickly losing faith in big banks and the financial industry in general and the scandals and weekly bank failures are not helping. Fortune Magazine just came out with three indicators that middle-class Americans may slowly and subtly begin to opt out of banking services.

1. Withdrawing from Retirement

About 22% of people with retirement funds had an outstanding loan against their retirement, according to a Fidelity Investments report. Fidelity also reported that 2.2% more individuals withdrew from their 401(k)s this past quarter than during the same period a year earlier. Also, 45% of those that withdrew money last year due to hardship withdrew again this year for similar reasons.

When you take out a loan against your retirement, you do not need a proven financial plan and there is a limit to the amount you can receive. An increase in the number of Americans taking out a loan against their own retirement funds is an indicator of the drift away from banks. The reason for this indication is loans are repaid back into your own retirement as opposed to the bank. Either way, it is never beneficial to pull from your retirement. But in the face of unexpected hardship, it sometimes can be unavoidable.

2. Private Funding Becomes More Popular

Some of the country’s biggest corporations are beginning to shift away from using big banks as they diversify their funding by turning to investors for loans. The Financial Times pointed out the growth in private placement deals, which indicates that banks are trying to avoid adding loans to their balance sheets. In the past, smaller organizations typically have favored going to investors directly in order to build better relationships, but now multinational companies are following suit as well. This doesn’t mean that banks are completely out of luck, as these private placements still sometimes utilize banks as facilitators.

3. Friends and Neighbor Funding

Since many lenders have gotten more strict about to whom they choose to lend, more people are turning to friends and family for loans. The rising costs of having a credit card and the increasing difficulty of obtaining a loan makes peer-to-peer lending an option that more Americans are willing to explore. Now, with retail banking firms like Mango Financial people who are not seeking traditional banking services are finding ways to still get the services they need without turning to payday loan processors. Not only are the increases in out-of-bank lending an indicator of a shift away from traditional banking, but figures released by the FDIC also showed the large number of unbanked and underbanked citizens in the U.S.

These trends and theories do not necessarily predict Americans will completely turn away from banks, as many are still storing their money in banking institutions. Having barely survived the financial crisis, some banks are struggling. When the industry and economy turn around, those citizens considering leaving traditional banking could have a change of heart.

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