Credit Unions Get Their Day In The Sun
I’ve been joking with friends lately that suddenly people are actually listening to what I’m saying.
I’ve traveled around the state for the last 30-plus years touting the benefits of joining a credit union. Thankfully, people have been fairly receptive to my message. But nothing can top the response we’ve seen over the last two months. And we’ve only just begun.
In case you haven’t followed all the recent developments, here’s a brief recap of how the financial services industry has changed recently: On Sept. 29, Bank of America (BofA) announced its now-rescinded $5 monthly debit card fee. The announcement followed increased fees by Citigroup, SunTrust, Chase, Wells Fargo and others. BofA was the tipping point. Consumers had had enough and decided to fight back, introducing Bank Transfer Day, on Saturday, Nov. 5.
Within days, this grassroots-organized social media-based movement was gaining national and statewide attention, urging consumers to switch their money from the larger, trans-national financial institutions to locally grown credit unions and community banks. I have never seen a consumer movement take hold so quickly.
We estimate that since Sept. 29, at least 20,000 consumers throughout Massachusetts have joined a credit union, adding more than $136 million in new deposits. Credit unions reported that average checking account openings in September and October were 50 percent higher than in the same months in 2010. Traffic to “aSmarterChoice.org” website, where consumers can search to find local credit unions, reached a record number of clicks.
The numbers for Bank Transfer Day itself are still being calculated, but we know already that Digital Federal Credit Union, the largest credit union in New England with 330,000 total members, reported signing 133 new members on Bank Transfer Day, a 56- percent increase from the 85 account openings it averages on a Saturday.
All of this presents an opportunity for the state’s credit unions. The facts speak for themselves, just as the value of credit unions speak to the new, empowered consumer.
For one, we have a different structure; we’re nonprofit. And so, any profit earned is returned directly to members through lower fees and better interest rates. For example, most Massachusetts credit unions don’t charge debit transaction fees and offer account options with no monthly fees.
Additionally, credit unions are not driven by stock prices. In fact, we don’t have them. BofA and others have to keep profits at a certain level because they have large boards of directors and shareholder obligations. That’s fine, and many corporations work that way. But a credit union is owned by its members. If you were to join one, you would take an ownership stake in the institution, no matter how much you deposit. No bank offers that.
Bank Transfer Day has given us the chance to be discovered and frankly, rediscovered. We continue to see strong consumer interest, and we expect that by year’s end, we’ll be able to report that 2011 was one of our fastest-growing years in state history. We hope to say the same about 2012.
Dan Egan is president and CEO of the Marlborough-based Massachusetts Credit Union League.
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