Rising bank fees cause 'bank transfer day'
NEW ORLEANS, LA. (FOX44) - Reacting to rising bank fees, hundreds of thousands of consumers are rushing to credit unions and joining existing credit union members in depositing or shifting billions of savings from banks to credit unions, according to estimates released today by the Credit Union National Assn. (CUNA), the nation's largest credit union advocacy group.
Based on a nationwide survey of 5,000 credit unions, CUNA estimates that at least 650,000 consumers across the nation have joined credit unions since Sept. 29 (the day Bank of America unveiled its now-rescinded $5 monthly debit card fee). Also during that time, CUNA estimates that credit unions have added $4.5 billion in new savings accounts, likely from the new members and existing members shifting their funds.
The survey shows that four in every five credit unions experiencing member growth since Sept. 29 attributed the growth to consumer reaction to new fees imposed by banks, or a combination of consumer reactions to the new bank fees plus, the social media-inspired "Bank Transfer Day," Nov. 5. "Bank Transfer Day" urges consumers to transfer their accounts from banks to credit unions by Saturday, Nov. 5.
"These results indicate that consumers are clearly making a smarter choice by moving to credit unions where, on average, they will save about $70 a year in fewer or no fees, lower rates on loans and higher return on savings," said Bill Cheney, president and CEO of CUNA.
He added that studies have shown people living paycheck to paycheck save even more at a credit union than the average financial institution customer, as they use more credit union services.
Cheney said the growth is particularly noticeable at larger credit unions (those with $100 million or more in assets, which account for about 20 percent of all credit unions - but count about 80 percent of all credit union members). The CUNA survey shows that more than 70 percent of these credit unions reported they have seen growth in memberships and deposits since Sept. 29.
Cheney noted that many credit unions across the nation -whether they are realizing new members or not -are making special efforts to tap the surging interest in credit unions.
"They are conducting advertising campaigns (by themselves or cooperatively with other credit unions), sending 'switch kits' to existing members to share with family members or other prospective members, beefing up web sites, extending hours and staffing for this Saturday (Nov. 5), performing email blasts to members, maximizing social media campaigns, putting up banners in lobbies (and on their buildings), offering bonuses to members who bring in new members (and giving bonuses to new members as well)," Cheney said.
"They are doing whatever their resources will allow them to do to help serve this consumer surge in interest in credit unions."
Cheney also noted that searches for credit unions on the website "aSmarterChoice.org" - which includes a search engine to help consumers find a credit union they are eligible to join - continues to surge, with more than 56,000 visitors in October.
"Any day is a good day for a consumer to become a credit union member," Cheney said. "Saturday, Nov. 5, is one good day to join, and we certainly encourage consumers to make the change. Because when a consumer joins a credit union, he or she takes the first step for themselves, and their families, in moving toward financial freedom."