The speculation was that political pressure and reputational damage led them to conclude that crossing the government, whose assistance they may yet need again, was not worth the hassle. However, new data has emerged suggesting that customers responded in terms the banks could not ignore; they switched their accounts. In one month, more people dropped their accounts at big banks and opened new accounts at credit unions than in all of 2010.
Now 650,000 is a large number but the US has 300 million people. And according to bank deposit data, most Americans who have such accounts have three of them. So, the number who have switched so far is minimal. But it is the volume of people who switched in one month that evidently caught their attention. And why should banks care? Because those deposits are warehoused at relatively low interest rates but leant out or invested at relatively high interest rates or returns, which provides the banks with a nice little profit. Yes, where you stand is influenced by where your wallet sits. JL
Jillian Berman reports in Huffington Post:
More consumers flocked to credit unions last month than in all of 2010 combined, likely in part due to the controversy surrounding debit card fees.
At least 650,000 customers opened new accounts at credit unions since September 29, the day Bank of America announced it would charge customers a $5 per month fee to use their debit card for purchases starting in 2012, the Credit Union National Association estimates.
If that number holds true, it would be more than the 600,000 consumers that joined credit unions in all of 2010.
More than 80 percent of the credit unions that experienced a boost last month attributed the growth to fees like Bank of America's or a mix of reactions to fees and "Bank Transfer Day" -- a social media-centered movement encouraging consumers to transfer their money from banks to credit unions or other non-traditional lenders, according to CUNA.
The banks are likely feeling the customer anger. A Bank of America official said the bank decided to scrap the debit card fee earlier this week as other banks also dropped their fees in response to the outcry, according to Reuters.
SunTrust Banks and Regions Financial said they were canceling their debit card fees hours before Bank of America made its announcement, according to the Wall Street Journal. Wells Fargo and JPMorgan Chase also halted their fee pilot programs. One-third of consumers said they would leave their bank if it put debit card fees in place, according to a survey released last month from Research Intelligence Group.
Credit unions across the country are benefiting from customers' decisions to make the switch. The 20 biggest credit unions in Massachusetts reported a 50 percent boost in account openings in the past six weeks, compared to the same period last year, according to the Worcester Telegram. Some Minneapolis, Minnesota-area credit unions have seen their new account volumes more than double during the first three weeks of October, the Minneapolis Star-Tribune reports.
Some credit unions are encouraging consumers to make the switch by extending hours and staffing for Saturday's Bank Transfer Day as well as providing current customers with "switch kits" that they can give to friends and family, according to CUNA.
"They are doing whatever their resources will allow them to do to help serve this consumer surge in interest in credit unions," Bill Cheney, CUNA president and CEO said in a statement.
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