There's a misconception that large banking entities are more trustworthy and reliable because they managed to get to the scale they're at today. Then again, it wasn't long ago when some of the biggest banks in America were teetering on the brink of bankruptcy. Now some glaring errors are coming into focus and it may be time to rethink your business banking strategy if you've only been relying on big, ambiguous banks up until now.

FDIC crosshairs

The Federal Deposit Insurance Corporation (FDIC) is taking some of the highest-profile banks in the country to task over shady business practices. According to a report published by The Huffington Post, the FDIC is suing Bank of America (BoA), JPMorgan Chase, Citigroup and several others on behalf of a small Illinois banks that went under last year. According to the FDIC, these large institutions led Strategic Capital and Citizens National, the two smaller Illinois entities, to believe that they were offering sound financial investment advice regarding mortgage securities that subsequently tanked, costing Strategic and Citizens their livelihood.

Looking local

Banking Grades, a new online financial tool that helps investors look for banks by region, provides customer-level feedback and professional grading of entities based on several performance markers. The reviews have found small, local banks tend to offer the best services and be most reliable, and consumers and businesses are taking notice.

Drawing on FDIC data, Banking Grades reviewed where these financial institutions were putting their money and found they were giving loans to small businesses. By and large, the big banks like those currently facing the FDIC suit were given failing grades for refusing to invest in the local community.

"In our opinion, big banks are not well equipped to lend to small businesses," said Multifunding founder Ami Kassar in an interview with The Huffington Post. The company is in charge of managing the Banking Grades site. "[Big banks] are simply too bureaucratic and complex to handle small-business loans well."

Weigh the options

Whether big banks are intentionally sabotaging smaller institutions or just failing to have faith in local investing, small businesses and consumers are looking more to local banks to assist with opening accounts, business banking and other financial investing advice.