Will Bank Transfer Day ruin credit unions?
October 31, 2011
I have a business checking account with a "big bank" and one of its managers called the other day to ask if I would like to come in and figure out a way to get rid of the fees I was accruing on that checking account.
I was impressed. I knew banks were taking a public relations hit from all the recent fees, particularly after Bank of America's announcement that it was going to charge customers $5 a month for using a debit card and the announcement by many others that they were going to charge for checking accounts. But were banks managers really meeting with customers individually to get them to stay?
Well, I guess mine was.
The truth was, it was pretty easy to set up some checking account features, such as a direct deposit, to avoid the charges I was getting. With my bank's help, I was even able to set up a new money market account and take advantage of some great refinance rates to lower my house payment.
But although I do some banking with my big bank, my day-to-day personal checking account is through my local credit union. I've been with it for about 25 years and I've never seen a reason to leave. They don't charge me for a checking account and my debit card is free, too. I also have two savings accounts there, and the interest rate on my credit union credit card is relatively low too. They also have some of the best CD rates in town.
I got dinged with some unexpected overdraft fees a couple of years ago, but other than that, I have no complaints about the service or practices.
So I hope that this national Bank Transfer Day on November 5 doesn't screw things up for me. Thousands of people are threatening to leave their banks for credit unions, and what if a lot of those new credit union customers are so-called "bad" account-holders who maintain low balances, incur costly overdrafts and make only slipshod loan payments? Won't these low-value accounts have to be subsidized by the rest of the membership?
I like my little credit union. The tellers are nice and they don't charge me when I come by to make a deposit in person. There's never a line, and when I have to order checks or a new debit card, they take care of it right away. The general manager even called me personally that time I'd gotten a little steamed about those overdraft charges.
So I'd like to keep banking with this credit union. But will it be the same if thousands of new customers show up demanding a free checking account?
I hope so.
I'd hate to have to move all of my accounts to my big bank.
