By Sarah Morgan
Credit unions nationwide got a big boost from Bank Transfer Day on Saturday, capping off an already strong month.
According to the Credit Union National Association, more than 40,000 people joined credit unions as part of the grassroots protest begun on Facebook, bringing with them about $80 million. Organizers encouraged people to switch banks in protest of new fees, such as Bank of America’s since-rescinded $5 debit-card charge. The effort then gained support from the Occupy Wall Street movement and received national attention. More than 60% of credit unions who added new members also made new loans, according to the national organization’s survey of local credit unions.
Many of the Bank Transfer Day movement’s supporters made the switch prior to Saturday. More than 650,000 people have joined credit unions in the past month, and credit unions have added about $4.5 billion in new savings accounts — double the typical monthly account growth — according to the Credit Union National Association. “I’ve been working for credit union trade associations for 23 years, and I’ve never seen anything quite like this,” says Dave Adams, the CEO of the Michigan Credit Union League.
In Michigan, local credit unions have opened two or three times as many new checking accounts this October as they did last year, Adams says. That suggests it’s not just new credit union members who are moving some money, Adams says. “People are moving more of their business to have their primary relationship be with the credit union,” he says. Those who do so may stand to save some real money, not just on lower fees, but on lower interest rates for credit cards and other loans, Adams says. Nationally, CUNA estimates that credit union members save an average of nearly $70 a year compared to traditional bank customers.
The big banks do not appear to be threatened by the protest effort. “Banks have been and continue to be highly competitive,” says Carol Kaplan, a spokeswoman for the American Bankers Association. “There’s plenty of choice out there, and banks have always been in favor of competition, regardless of where it comes from,” she says. Regarding CUNA’s numbers, she says “the only data that’s going to be reliable” will come from government sources.