Bank Transfer Day Pumps Up Missouri Credit Unions With $49 Million
More than 7,100 members switched to Missouri credit unions in the past six weeks. Local credit unions said the increase was evident.
Since the effort began six weeks ago, the 131 credit unions in Missouri added 7,100 new members, who transferred $49 million into the credit unions, said Missouri Credit Union Association President and CEO Mike Beall. Bank Transfer Day was Saturday.
“In just a couple of weeks, that’s a half percent growth in number of members and total assets,” Beall said. “That’s pretty significant growth in just a six-week period.”
In the St. Louis area, Jim Cochran, vice president of retail sales for Vantage Credit Union, said the establishment saw increases throughout the six weeks leading up to Bank Transfer Day, although he couldn’t give exact figures.
"I can tell you we opened more accounts in October than we did in any other month in 2011," Cochran said. "I would have to attribute some of that to Bank Transfer Day.”
Bank Transfer Day began after the Bank of America announced it would begin charging a $5 monthly fee for its debit card. Los Angeles gallery owner Kristen Christian said she was outraged over bank fees and began the transfer movement on Facebook. On Monday, her Bank Transfer page had more than 59,501 people who clicked to “like” it.
Bank of America later reversed its decision and did not charge the fee, but the transfer effort gained momentum.
Cochran said when Bank of America first announced the fee, he asked branch workers if new customers told them why they were transferring accounts. Some mentioned they were with Bank of America and other banks, but usually did not mention Bank Transfer Day itself.
"I experienced that myself," Cochran said. “I visit our branches, and I heard people coming in and say, ‘I’m with Bank of America,’ and they wanted to see about the services we offer.”
Some credit unions built advertising campaigns around the effort. Community America Credit Union in Kansas City had an “Escape Your Bank” campaign.
Other credit unions, such as Vantage Credit Union, with 15 St. Louis locations, posted information on their websites and Facebook pages. On its website, Vantage urges customers to “Go Bankless.”
Cochran said the difference boils down to the institutions’ purpose. Banks are for-profit corporations, so banks’ main purpose is to earn profits for shareholders.
“At credit unions, our primary focus is how can we provide the best possible menu of services for members,” he said. “At credit unions, all our members are our shareholders, so we serve them.”
Beall said he believes consumers are catching on to the advantages credit unions offer, and that customers will continue to move their credit unions.
“We think consumers have wised up to the concept that banks will continue to charge large fees one way or another,” he said. “We think this will continue as a trend.”
He said credit union members even brought in friends and family members to make the switch.
Would that create a dangerous climate in finance? The state credit union CEO said that’s up to the banks.
“I think banks are on notice that they will not be able to deliver huge profits to their shareholders on the backs of their customers,” Beall said. “They will have to re-think their business model on this."