October 31, 2011; Source: Detroit News | Credit Unions around Detroit are reporting a significant increase in new demand as bank patrons react to the general proposition of larger banks charging additional service fees as sparked by Bank of America’s plan to charge $5/month for debit card use. But the shift seems to be more of a general reaction to the banking industry than about a particular bank’s practices.
According to the International Business Times, their website CULookup.com has seen a 350 percent increase in traffic in the two weeks since Bank of America announced its plan. In Charlotte, N.C., home base to Bank of America headquarters, there has been, over the past month, a 263 percent jump in membership and a 373 percent increase in checking accounts, according to Patty Briotta, public relations manager for the National Association of Federal Credit Unions.
James Dietz, who used to do business at TCF Bank but who recently shifted his money to the Co-op Services Credit Union in Livonia, says, “I wasn’t happy . . . Not just with TCF but with all banks in general, for the fees they’re starting to charge, just for itty bitty things. It’s like they’re telling me they don’t want to do business with me, that I’m not worth their time.
Some credit unions have recognized a business opportunity in the current displeasure with banks and are offering incentives to encourage the flow of new customers, which is in some institutions being estimated at a 25 percent to 50 percent increase, but Michael Poulos, president and CEO of the Michigan First Credit Union, reports strong growth—without any effort on their part. “We average about1,500 new members a month, and most of it comes from word of mouth, so we’ve chosen not to go out with any advertising campaign.”
Not only are fees lower at credit unions, profits are passed back to members either as annual dividends or, in what is more often the case, through lower loan rates and higher rates of interest on savings accounts than one might get in a big commercial bank.
Credit Union customers save $6.3 billion a year in fees, according to David Adams, president and CEO of the Michigan Credit Union League. “That’s $69 per person, on average, but in Michigan, which has 4.5 million credit union members, the savings are about $200 million a year, which is $81 per person.”
On a site called defendyourdollars.org, Consumers Union has put up a video explaining how people can change banks. This seems to be well timed to coincide with Bank Transfer Day, set for November 5 and organized, according to Consumers Union, by grassroots activists.—Ruth McCambridge