Reflections on Bank Transfer Day
November 18, 2011
I recently heard the intern in my office on the phone cancelling his accounts with a large commercial bank. It was, appropriately enough, November 5--Bank Transfer Day.
This intern is an endearingly idealistic guy. He recently recruited me to join him in growing a moustache to raise awareness for men's health issues (I couldn't figure out the connection either) and had previously asked me if he should move his checking account and savings accounts to a credit union.
I said I used both commercial banks and credit unions, but kept my personal checking account and savings accounts with a local credit union. He didn't know what a certificate of deposit was, but I explained that the best CD rates in town were also at my credit union. I said current mortgage rates were low there as well and that the debit card tied to my checking account was still free.
So as part of the event intended to send a message to large banks, he joined what may have been hundreds of thousands of consumers who switched to nonprofit credit unions.
Bank Transfer Day started with a single Facebook post by a Los Angeles art gallery owner and blossomed into a national movement linked with the Occupy Wall Street cause. According to the New York Daily News, more than 650,000 people moved to credit unions after Bank of America announced its plan to charge a $5-a-month fee for debit card use in late September.
The fee was the proverbial straw that broke the backs of consumers, who had already faced new fees for a variety of things for things such as ATM use, live teller transactions, checking accounts and even cash deposits. Since then consumers have moved an estimated $4.5 billion in deposits to credit unions. Bank of America and other banks dropped plans for their debit card fees, but the damage had already been done.
Once these new credit union members get used to the fact that they won't have a bank branch on every corner the way they did with Bank of America or Wells Fargo, they'll enjoy joining the 91 million people already banking with a credit union. They'll likely get a free debit card, free checking, lower refinance rates and the freedom to visit a living, breathing teller without having to pay for the privilege.
They'll wonder what took them so long to make the switch.