Bank Fees Are a Gift for Credit Unions
Posted by: Dan Beucke on November 3, 2011 at 10:30 AM
Kristen Christian, a 27-year-old Los Angeles gallery owner, came up with the idea for Bank Transfer Day after getting socked with one bank fee after another. Now that big banks are backing off their most notorious fees, on debit card use, is she backing down? No.
Bank Transfer Day is this Saturday, Nov. 5. Supporters say they are voting with their feet against fees, bank bailouts, home foreclosures and other sins of the big banks by pulling their money out and moving it to local banks or credit unions. The concept was quickly seized upon by Occupy Wall Street demonstrators, leading to a torrent of supportive Tweets and sister movements. And in perhaps the surest sign of Internet respect, Christian has been featured in a Taiwanese animation.
In just a month, Christian’s Bank Transfer Day page on Facebook has picked up 35,711 “likes” and the event page shows nearly 75,000 “rsvps” for those who have closed bank accounts or plan to. She goes out of her way, there and in interviews, to stress that BTD and OWS aren’t connected, though she welcomes the Occupiers’ support. (Christian also says she hasn’t received any financial support for BTD and her links with credit unions are limited to her membership with Los Angeles Federal Credit Union and Coast Hills Credit Union.) Bank of America’s decision Tuesday not to charge customers $5 a month to use their debit cards doesn’t change her mission, Christian explained in an email interview:
As far as I’m concerned, the funds of the American public are still better served on the local level with credit unions that focus on members and community instead of stockholders and profit. As I’ve mentioned before, November 5th is merely the deadline goal of Bank Transfer Day. This announcement from the banks comes too little, too late.
In an earlier interview with the Village Voice, Christian described bank experiences that may sound familiar:
Mostly just, I was tired. I was tired of being charged bank fee after bank fee after bank fee. If their site is down, if I call in, I get a 2 dollar charge. That’s not my fault. … Another example: I took my mother to a Mother’s Day brunch, and she had to pay because the bank decided to freeze my funds. It took nearly three days to give me access again. They said it was frozen for suspicious activity, but they made no attempt to contact me, they just froze my funds.
No surprise, credit unions jumped at the opportunity to take advantage of the fee outrage. My colleague Suzanne Woolley points out the credit union for our old employer, McGraw-Hill, this week started a “UnFEElievable” campaign. Amplify Credit Union in Austin is offering $50 to anyone who transfers over on Nov. 5, and the chance to win an iPad. A music video explains how to switch to a credit union.
How much actual business credit unions will pick up is unclear. The Credit Union National Association claims that a survey of 5,000 credit unions shows 650,000 new customers have been signed up, and $4.5 billion added through new accounts, since BofA announced its fee-hike plan on Sept. 29. (The group says average monthly membership growth is 80,000.) Western Federal Credit Union, a Los Angeles outfit that’s offering financial incentives to switch, says it added 30% more new members last month than it averaged the prior four months. A Bank of America spokeswoman declined to comment on BTD.
Banks can lose a good number of small accounts and not suffer greatly — especially if they hang onto the accounts of the 1% or near-1%. Those wealthier customers get hit with fewer fees anyway, and stick around for services that aren’t available to smaller account-holders. Finding new fees to fill the $8 billion revenue hole left after the debit-fee debacle will be a bit trickier, however.
(Photograph: Courtesy Everett Collection)
