WASHINGTON (12/1/11)--A youth movement away from big banks, and toward smaller institutions such as credit unions, could be catching on if a recent survey is any indication, as nearly 23% of respondents under 30 said they were planning to change their financial institution or had already done so.
That same percentage said they were aware of last month's Bank Transfer Day activities. Bank Transfer Day, which was created on Facebook and reached well in excess of 600,000 through that social media site, and even more through media coverage of the event, spoke mainly to younger adults.
Overall, American Banker reported, the survey by TNS Research found that around 12% of the 2,500 respondents questioned had already closed their big bank accounts or would do so in the future. The article also noted that while the over-60 crowd was more likely to be aware of Bank Transfer Day, the under-30 crowd was even more likely to act on it and move accounts.
Nearly 14% of so-called "wealthy" respondents, i.e. those making $75,000 or more per year, reported they would close their accounts. Around 10.2% of lower income respondents (those making less than $30,000 per year) said they planned to close their accounts.
Close to half of those that left their big bank (41%) said they would part ways with Bank of America, whose decision to charge $5 per month debit account fees led to the creation of Bank Transfer Day. Other large banks were also cited in the survey, with 13.7% of respondents saying they planned to leave JPMorgan Chase, 10% fleeing Wells Fargo, and 3.1% closing Citigroup accounts.
In a recent Fox News interview, Credit Union National Association (CUNA) Chief Economist Bill Hampel said that while Bank Transfer Day officially ended on Nov. 5, "Bank Transfer Season" has begun. Around 650,000 new members, and $4.5 billion in new deposits, flooded into credit unions in the month before Bank Transfer Day, and credit unions brought in an additional 40,000 in new members, and added $80 million in new savings account funds and $90 million in new loans, on Bank Transfer Day, according to CUNA. However, Hampel said, the real story is not asset growth, but membership growth "and the new, mostly young members that credit unions have now gained."
And, he added, Bank Transfer Day's longest lasting legacies will unfold as those new members relate their positive credit union experiences to their friends and families, creating even more new members.