Canadian banks might be a friendlier option for U.S. savers

TD Bank sign on building

The U.S. banking bust of 2008 proved a boom for Canadian banks that have tried for years with limited success to gain a foothold in the lucrative market next door.

Having largely dodged the calamitous effects of the U.S. housing market implosion, Canada's big five -- Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD Bank), Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce (CIBC) -- are better positioned than they've been in years to expand southward.

Granted, their past efforts didn't always fare well.

CIBC, in particular, took it in the chops when Enron investors sued its U.S. banking unit, forcing its fire sale to Oppenheimer Holdings in 2007. Other U.S. expeditions, including RBC's Centura, TD's Banknorth and Bank of Montreal's Harris Bank acquisition, didn't exactly set Wall Street on fire, either.

But the steep grade the Canadians typically faced seems to have leveled recently as the "customer service" (quotes intended) offered by U.S. megabanks slid from benign neglect to outright bouncer-at-last-call surliness in the wake of the financial reforms they so richly deserved.

Suddenly, the old-school friendliness and reassuring banker-ly behavior at which the Canadians excel seems a breath of fresh northern air to customers who've grown tired of being treated like party crashers or carjackers by their pinched-lipped American banks.

TD Bank has made the most headway of the five Canadian brands, acquiring banks like New Jersey-based Commerce Bancorp and making bold inroads down the East Coast, where its 1,300 bank branches now outnumber its Canadian stores.

Its December purchase of Chrysler Financial Corp. places TD among the five top auto lenders in the United States. Its stateside brand, which now employs 24,000 in 16 states from Maine to Florida, already accounts for a quarter of annual corporate profits.

Bank of Montreal has acquired nearly a dozen U.S. banks during the past decade.

Although Harris Bank has underperformed to Wall Street's expectations, it was recently singled out by American Banker as one of only two U.S. banks (among the 30 studied) whose reputation ranked as "strong."

So far, Bank of Nova Scotia has largely avoided the crowded U.S. market in favor of opportunities in Latin America and China.

What does this brisk north wind mean for American consumers?

If TD's customer-centric approach is any indication, it could blow in changes like simplified account structures, fewer fees and a level of customer service we haven't seen in years.

Of course, they're still banks, and they'll do what all banks do to keep the lights on.

But like the bar in the old television show Cheers, we might not mind the marketing barrage as much when it comes from a branch where everyone knows our name.