Membership Movement: New Bank Fees Driving Renewed Consideration of Credit Unions
October 3, 2011
October 4, 2011
It took less than a week for the court of consumer opinion to levy its decision on the new round of fees banks will soon require their customers to forfeit. The verdict—guilty as charged for the crime of gouging—may have led to a credit union membership movement similar to what happened during the bank exodus of late 2008-2009.
While the full scale has not been measured, the recent announcement by Bank of America to hit their customers with a $5 per month charge for accessing their account with their previously free debit card is manifesting itself as a renewed consideration of credit unions in some areas, and media is taking notice.
Washington State Employees Credit Union (WSECU) said its membership inquiries have doubled, according to a story published by The Olympian. Spokeswoman Ann Flannigan noted in the piece that the credit union typically receives 30 to 40 inquiries a week about membership, but that had risen to 62 by early Friday.
The new bank fees will kick in January 2011, and follows Wells Fargo and Chase Bank’s testing of $3 monthly fees for debit cards in some markets. Washington consumers pay some of the highest fees in the nation if they overdraft a bank account or use an ATM, according to a report by the Puget Sound Business Journal.
The late 2008-09 march to credit unions was aided in part by a perfect storm of circumstances: 1) anger at banks and Wall Street (and a news cycle that would not let up); 2) a desire for change among the public; 3) a credit union industry that was ready to take steps necessary to make potential membership gains real.
The most recent CUNA report on the benefits of being a credit union member show a savings of $92 per year to each of Washington’s 2,711,781 credit union members, and $105 per year to each of Oregon’s 1,339,580 credit union members. Adding on the additional $3-to-$5 savings in debit card fees that credit union member will also NOT be paying, those member benefits raise to between $128 and $158 in Washington and $141 and $165 in Oregon.
That’s a potential consumer savings in the Northwest of more than $653 million for current members only. Considering the new fees that are set to hamstring every bank customer come January, if each of the 6.73 million Washingtonians and 3.83 million Oregonians joined a credit union, the total savings in the Northwest could be as much as $1.65 billion ($632 million in Oregon, $1.06 billion in Washington).
But is it enough to get noticed?
The public’s anger at banks is back and the spreading Wall Street protest that saw 700 arrested over the weekend is keeping it in the news. With credit unions being the clear choice for smart consumer banking, it seems the only aspect of the perfect storm that that hasn’t been confirmed system-wide is credit unions preparedness to attract those potential members who have been put on the ropes by bank greed.
That too is changing, at least in the Northwest. Credit union spokespeople and their allies have been quoted on Oregon Public Broadcasting, the Seattle PI, Seattle Times and several regional radio and television news broadcasts.
The issue has garnered positive attention in the national press as well. ABC’s “Good Morning America,” for instance, aired a segment on Monday offering tips for consumers to avoid bank fees, trumpeting credit unions a place for better service and lower fees.
Back at WSECU, by the end of the day last Friday inquiries rose to 86, not including the phone calls and in-branch requests for information.
Questions or Concerns? Contact Matt Halvorson, Anthem Editor: firstname.lastname@example.org.