WASHINGTON (3/15/12)--New government figures on credit union membership growth are even more impressive when you dig below the surface, Credit Union National Association (CUNA) President/ CEO Bill Cheney explains in a column posted on the Huffington Post'
s website. The membership gains, he said, "are strong evidence that consumers are fed up with high bank fees and leaving in large numbers for credit unions."
Cheney noted the National Credit Union Administration's fourth-quarter data released this month showed 1.3 million people joined credit unions in 2011, more than double the previous year's growth.
CUs saw a net gain of nearly 400,000 in the fourth quarter, a period that encompassed Bank Transfer Day. But the fourth quarter is also a time when many dormant accounts are closed at credit unions. So much so, he said, that it's not unusual for credit union membership to actually go down in the fourth quarter, as closed accounts exceed those opened by new members.
"We've seen that occur five times in the seven years prior to 2011. The 400,000 net gain in new members in the fourth quarter of 2011 was actually 530,000 greater than the average change in members over the same period during the preceding seven years," Cheney noted.
The CUNA leader added that an additional and perhaps better measure of membership activity at credit unions comes from looking not only at new people who joined, but at new checking accounts opened, since Bank Transfer Day was triggered in large part by big banks' debit card fee increases.
"When you look at the change in new checking accounts, credit unions saw a net increase of about 737,000 in the fourth quarter -- that's nearly three times the average fourth-quarter growth of these accounts in the past seven years," Cheney wrote. "By establishing checking accounts, these new and existing members alike are apt to make their credit union their primary financial institution."
Cheney's column pointed to recent findings from CUNA's 2012 National Voter Survey as an indication of what is likely driving consumers to credit unions:
- Banks received a favorability rating of 69%—the lowest since CUNA began doing the survey 14 years ago;
- More than eight in ten consumers said banks today charge too much in fees;
- For the first time since CUNA started the survey, as many people (43%) viewed credit unions as the best place to keep their day-to-day checking and savings as they did banks; and
- About three out of four (74%) said credit unions "look out for the little guy," compared to 18% who felt that way about banks.
"Taken together," Cheney said," NCUA's data and CUNA's survey results "offer compelling evidence that high banking fees and all the attention surrounding Bank Transfer Day motivated people to move to credit unions."