WASHINGTON (11/4/11)--At least 650,000 consumers across the nation have joined credit unions in the past four weeks, reflecting consumers' reactions to rising fees at banks, according to a survey by the Credit Union National Association (CUNA).
They have joined credit unions since Sept. 29, when Bank of America (BofA) unveiled its plans to charge $5 a month for debit cards. The public outcry the past month has forced BofA and other big banks to reconsider their debit fees.
CUNA estimates that credit unions have added $4.5 billion in new savings accounts. More than four in every five credit unions experiencing 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. Bank Transfer Day, which is tomorrow, urges consumers to switch from big banks to smaller credit unions and community banks.
"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.
Cheney 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.
The growth is particularly noticeable at larger credit unions--those with $100 million or more in assets, Cheney said. They account for about 20% of all credit unions, but serve about 80% of credit union members. The CUNA survey indicated that more than 70% of these credit unions reported they have seen growth in memberships and deposits since Sept. 29.
"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," said Cheney.
"They are conducting advertising campaigns both individually and cooperatively with others, sending 'switch kits' to existing members to share with family members or other prospective members, beefing up websites, extending hours and staffing for Bank Transfer Day, performing e-mail blasts to members, maximizing social media campaigns, putting up banners in lobbies or on their buildings, offering bonuses to members who bring in new members, and giving bonuses to 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 noted searches for credit unions continue to surge on the website aSmarterChoice.org, with more than 56,000 visitors in October.
The phenomenal increases in membership this month have caught the eye of the nationwide media, many of whom bumped up their coverage of the issue Thursday, with heavy coverage of Cheney's comments and CUNA's statistics and positive press.
Among them: Bloomberg Radio, MSNBC's "Rachel Maddow Show," Businessweek's "Bank fees are a gift to credit unions," credit.com's "Not Your Grandmother's Credit Union," and Reuters' "Credit union business grows as consumers sour on banks." That doesn't count dozens of regional and local coverage.
Reuters (Nov. 3) reported Cheney's comments and noted the growth statistics provided by CUNA and said, "The big banks may have dropped the debit card fees, but the credit unions are the ones picking up the business."
MSNBC's (Nov. 3) Rachel Maddow, in covering Bank Transfer Day, referenced new member growth at several credit unions and pointed to Cheney's comments on credit union growth that appeared in the Reuters story.
In the credit.com article, CUNA Vice President of Economics and Statistics Mike Schenk described the features of today's credit unions, including the conveniences, such as free ATM access, shared branches, and electronic banking. He noted that 71% of credit unions belong to a surcharge-free ATM network. Some 97% of credit unions offer Web-based home banking, allowing members to check balances, view their account histories or transfer funds online. And 94% offer online billing while 47% offer mobile banking.
Meanwhile, credit unions continued to announce their readiness to help consumers switch to credit unions tomorrow, on Bank Transfer Day.
However, they also emphasized, like CUNA's Cheney, that: "Any day is a good day for a consumer to become a credit union member. 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."
Use the links to access the full reports in the media.