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As of November 5th, the Credit Union National Association reports that 650,000 consumers have joined credit unions across the nation, a reaction to increasing fees imposed by big banks.

I’VE BEEN READY TO SWITCH from Bank of America for awhile, and their plans to impose a $5 a month fee for debit cards sealed the deal. I wasn’t the only one ticked off – the additional charges brought on a Facebook-led movement known as Bank Transfer Day. The purpose: encourage consumers to exercise their rights and let banks know about their dissatisfaction by closing their accounts and finding an alternative.

The movement is already working – Bank of America recently rescinded their debit card fee plan and noted that it was due to public outcry. Other banks are listening up.

Will it be enough, or are banks facing more backlash? It’s not just about the debit card fee; Bank Transfer Day is just part of the larger Occupy movement that’s been going on for months. For people living from one paycheck to the next, an account with a credit union can help with saving money more so than a bank account.

“The 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 CUNA President/CEO Bill Cheney. “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.”

Occupy Wall Street

 

About The Author

Michelle Schusterman

Michelle is a musician, writer, and teacher just trying to see the world while doing what she loves for a living. She's taught ESL in Salvador, Brazil and kindergarten in Suwon, Korea, and now she's a full-time freelance writer living in Seattle (just to keep the city alliteration going). She'll try pretty much any food once and believes coffee is its own food group.

  • Guest

    The increase in bank fees is a result of legislation passed by Democratic Senator Dick Durbin. Credit Unions have been able to skate by for decades with minimal regulation in comparison to banks due to a marginal impact on the system. What do you think is going to happen as the popularity of CU’s increase…Washington isn’t going to just let that slide…

    • Stud

      because credit unions are not for profit banks….do you not realize every single regulation is put in place because corporations can’t regulate themselves…are you really that clueless….since credit unions don’t screw their customers, your premise that regulations are coming are a joke…

      • scuba4fun24

        Actually they are subjected to regulations as well and have experienced a proportionately similar failure rate as banks – they have also had their fair share of fraud and losses etc.  Just as they share their “profits” as the population of participants extends beyond their traditional known member from employer sponsored plans, those who will ultimately default on their loans will result in the losses to be shared by the members as well since the NCUA (comparable to the FDIC for S&Ls) is ill-prepared and underfunded to support the increased losses and defaults.

      • Guest

        If you think that CU’s are not a type of corporation and that they can effectively regulate themselves because they are allegedly “non-profit” then you are entitled to live in your fairy tale. 

        In the 1980s there was a “Savings and Loans Crisis” that resulted in the failure of almost one-third of CU type institutions because they had the same rights as banks without most of the regulations.

        CU’s can, and have, screwed their customers which is why they have their own S&L regulatory agency similar to the OCC. If they already have a regulator, then why could their not be more regulations?

    • Kevin Diggett

      As the popularity of CU’s increase the existence of BIG banks decreases. Idiot.

      You realize that Credit Union is not a single bank? It is a term used to describe a type of banking unit that is member owned. THERE IS NO ONE BIG CU

      They are many small credit unions, and they are not aggressively trying to buy one another to become the ultimate credit union.

      Moron.

      • Guest

        The fact that you resort to name calling Kevin undermines the legitimacy of your opinion as well as your intelligence.

        BIG banks won’t decrease as CU’s increase. The two are not positively correlated, and that’s not the point I was making to begin with. In reality most large banks don’t care about small depositors that have the ability to  transfer to a CU.  Large banks like BofA facilitate mass credit, something CU’s will never be able to do based on their charter. But as CU’s increase in popularity, even at a regional level, so will their profile and scrutiny.

        Did you know that less than a century ago there was not “ONE BIG BANK” as interstate banking was prohibited under the McFadden Act of 1927? This meant that nationally chartered banks under the National Bank Act of 1864 could not operate in multiple states. It was not until the Riegle-Neal Act of 1994 (approved by Clinton) that allowed banks of significant capital to merge across state lines, buy other banks, and allow national banking to expand.

        If you look at the data from bank size in terms of capital and deposit accounts in the last decade you will see a decrease in the number of total banks and increase in the number of large banks.

        Have you ever noticed that no one used CU’s a few decades ago? CU’s since the 1980s have significantly relaxed their policies regarding classification of member ownership. There was a time when only a specific group of people could gain membership, but now having a certain zip code or being the resident of a particular state is often good enough.

        For you to assume that CU’s do not have the potential to evolve in a similar fashion given the appropriate legislation and buy each other out is short-sighted. Given the proper incentive, there can be one large CU. And Washington will increase regulation (in case you didn’t notice most of these problems are a result of legislation).

  • Obysmal: Dependency Politics

    I bet the collective average daily balance of the 650,000 people who transferred their bank accounts to credit unions because of the “occupiers” urging is about $650,000. The banks could care less, they’re shedding their unprofitable customers. Of course, they probably will lose a substantial amount of their NSF fee income, though. LOL!

    • Kevin Diggett

      The most profitable customers to BIG banks are those users, the ones they nickle and dime for fees and rake in dollars on extremely high interest rate credit cards and loans. BIG banks don’t make money when their customers pay back their loans. They rely on debt.

      • Obysmal: Dependency Politics

        An overdraw is not a “loan”. Customers who overdraw their accounts cost banks money, they don’t earn money off them other than fees which cover the cost of the overdraws, including recovering the overdraw from the offender. If the offender had an overdraw protection “loan” account, there wouldn’t be huge fees to begin with, so it goes without saying that the unauthorized overdraws are not “loans” and the fees that are applicable are simply cost recovery. Meanwhile, the high deposit customers that are staying with the banks do take out loans for mortgages, credit cards and business operations, etc., and the banks earn their typical 3% or higher “margin” on those loaned funds, which is where the big earnings for financial institutions are.  And the  banks will still be earning them, not withstanding the transfer of the low deposit accounts to the credit unions.  So what this is all really about is just “feel good” by a bunch of occupiers. 

        • Boybunny

          Are you a bank shill or just clueless?

          Outside USA, in Australia, the banks were charging $40 per overdraw fee… claiming it was only covering costs. The Australian government investigated those claims, and found that the costs to the banks was only cents per overdraw… and regulated the banks in Australia because of their lies. They can no longer charge a huge profit on small account issues.

          The Australian government also saw that the lock in contracts and exit fees plus exit paperwork and paperwork filing fees to change from one mortgage lender to another lender was ridiculous. After investigating it, they saw profiteering and deliberate lock in under unfavourable terms… so in a few months the law will change so the banks have to stop charging for mortgage exits and must do all exit paperwork themselves. The customer only needs to fill in one page of a standardised form to change from one lender to the next.

          There is pressure in Australia to regulate a lot of other areas the banking industry makes ridiculous profits on for services that cost them only a few cents.

          Customers, especially on the bottom end are being screwed by banks all around the world. The fight back has started, and will continue until either the banks are shackled or the banksters are shackled.

          • Obysmal: Dependency Politics

            Bunny, perhaps the problem in Australia was that the people who were overdrawing their bank accounts mistook their banks for a welfare department! Banks are not in business to give away money. If you anticipate the need to borrow the banks’ money, and set up overdraw protection, overdraw fees ( to access your pre-approved line of credit) rarely exceed $10. The kind of fees you are talking about are those charged to only those people who have no overdraft protection, because they don’t qualify due to poor credit reasons and/or because they haven’t applied for overdraw protection before overdrawing their account.  On those 1-2 occasions where I have mistakenly overdrawn my bank account because of an arithmetic error, my Wall Street’s bank’s overdraw charges have not exceeded $2.00, because I had the overdraw protection established to protect against such accidental overdraws. Don’t ask me to feel sorry for people who overdraw their accounts without having overdraw protection, and then are charged high fees as a result. Good luck with the credit unions if that’s the “business” you intend to bring them by transferring your account to them. You’ll soon find out that they’re not the “welfare department” either.

    • billtech66

      “13 months and counting”Your math skills are lacking.
      By your numbers not one of the 650,000 people switching banks could
      have had more than ONE dollar in the account they switched.
      You make no sense whatsoever.

      I personally switched $16,000 from Wells Fargo to Redwood Credit Union.

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