NEWS ANALYSIS
NEW YORK—The nation’s nonprofit credit unions are taking business from retail banking giants as the Occupy Wall Street campaign gains momentum.
Credit unions provide similar products and services as large retail banks, but are member-owned and nonprofit.
Recent studies show that credit unions have seen a greater increase in customers in recent weeks—perhaps one reason for last week’s moves by banking giants such as Bank of America Corp. to ditch proposed debit card fees.
“At least 650,000 consumers across the nation have joined credit unions in the past four weeks,” beginning Sept. 29, as reported by the Credit Union National Association (CUNA), a trade group for credit unions. Sept. 29 is the day Bank of America, the nation’s largest bank by assets, announced a $5 fee for consumers using debit cards to make purchases. The survey is based on responses from more than 5,000 credit unions nationwide.
Last Saturday Nov. 5 was dubbed Bank Transfer Day, a day marketed by the Occupy Wall Street movement to encourage consumers to transfer their accounts from large banks such as Bank of America, Citigroup, and Wells Fargo, to local credit unions, which are perceived to be more consumer-friendly.
“[Credit unions] are doing whatever their resources will allow them to do to help serve this consumer surge in interest in credit unions,” said Bill Cheney, president of CUNA, in a news report.
For example, Golden 1 Credit Union in Sacramento, Calif., had announced that it would have extended hours on Nov. 5, in anticipation of consumers opening new accounts. Many others have put up new advertisements to encourage consumers to switch.
While it’s still unclear what financial impact Bank Transfer Day will have on the nation’s biggest banks, if any, there’s little doubt that consumer satisfaction among large banks has deteriorated.
