Bank Transfer Day had a big payoff for area credit unions.
Since the effort began six weeks ago, the 131 credit unions in Missouri added 7,100 new members, who transferred $49 million into the credit unions, said Missouri Credit Union Association President and CEO Mike Beall. Bank Transfer Day was Saturday.
“In just a couple of weeks, that’s a half percent growth in number of members and total assets,” Beall said. “That’s pretty significant growth in just a six-week period.”
In the St. Louis area, Jim Cochran, vice president of retail sales for Vantage Credit Union, said the establishment saw increases throughout the six weeks leading up to Bank Transfer Day, although he couldn’t give exact figures.
"I can tell you we opened more accounts in October than we did in any other month in 2011," Cochran said. "I would have to attribute some of that to Bank Transfer Day.”
Bank Transfer Day began after the Bank of America announced it would begin charging a $5 monthly fee for its debit card. Los Angeles gallery owner Kristen Christian said she was outraged over bank fees and began the transfer movement on Facebook. On Monday, her Bank Transfer page had more than 59,501 people who clicked to “like” it.
later reversed its decision and did not charge the fee, but the transfer effort gained momentum.
Cochran said when Bank of America first announced the fee, he asked branch workers if new customers told them why they were transferring accounts. Some mentioned the Bank of America
"I experienced that myself," Cochran said. “I visit our branches, and I heard people coming in and say, ‘I’m with Bank of America,’ and they wanted to see about the services we offer.”
Some credit unions built advertising campaigns around the effort. Community America Credit Union in Kansas City had an “Escape Your Bank” campaign.
Other credit unions, such as , with 15 St. Louis locations including two in Florissant, posted information on their websites and Facebook pages. On its website, Vantage urges customers to “Go Bankless.”
Cochran said the difference boils down to the institutions’ purpose. Banks are for-profit corporations, so banks’ main purpose is to earn profits for shareholders.
“At credit unions, our primary focus is how can we provide the best possible menu of services for members,” he said. “At credit unions, all our members are our shareholders, so we serve them.”
Beall said he believes consumers are catching on to the advantages credit unions offer, and that customers will continue to move their credit unions.
“We think consumers have wised up to the concept that banks will continue to charge large fees one way or another,” he said. “We think this will continue as a trend.”
He said credit union members even brought in friends and family members to make the switch.
Would that create a dangerous climate in finance? The state credit union CEO said that’s up to the banks.
“I think banks are on notice that they will not be able to deliver huge profits to their shareholders on the backs of their customers,” Beall said. “They will have to re-think their business model on this."
"Because banks stand to lose revenues when the interchange fee rule becomes effective, they may raise fees – either on consumer bank accounts more broadly, or specifically on debit cards – to recover their losses." How are they going to do that? Stavins: "Any price changes may take the form of reduced rewards on debit cards or increased fees, either in a form of fixed term fees or as variable per-transaction fees. Fixed one-time fees are more likely to affect the adoption of a payment method, while per-transaction fees are more likely to affect the use of payment methods." We know from other studies that young, low-income and less educated consumers are the ones relying most heavily on debit cards, partly because they have no access to credit. So at the end the issuers will manage to at worse recoup their losses, the merchants will be net winners as well and those consumers who can least afford it will be net losers from the interchange reform. http://blog.unibulmerchantservices.com/young-less-educated-and-low-income-consumers-most-affected-by-higher-debit-cost
No matter if it's the banks, the suppliers, the manufacturers or the retailers, no one is going to lose except the consumer. It wouldn't surprise me if credit unions would start tacking on some fees in the future when they acquire the millions of former bank customers due to an increased load on their own business.