Occupy Wall Street movement
has largely faded out of the news in recent months. But at least
one activist move against Wall Street institutions appears to
have been extremely successful -- both in terms of its stated
goals and in getting ordinary Americans to take action and put
themselves into better financial shape.
A recently released survey of customers from J.D. Power and
Associates provides some more information about the impact of
what became known as Bank Transfer Day. But before talking about
the survey, let's first bring everyone up to speed on what Bank
Transfer Day actually was.
Bank Transfer Day and you
Bank of America
) made the mistake of announcing that it intended to start
charging monthly fees for its customers to use debit cards. In
response, a group of people organized on Facebook to
announce Bank Transfer Day
, which happened on Nov. 5. With at least 73,000 supporters, the
group urged customers at big banks to move their accounts to
smaller community banks and credit unions to protest proposed
The movement eventually led B of A, along with several other
) , to scrap plans to charge fees. But it also resulted in people
actually moving their accounts, as the Credit Union National
Association said that nearly 700,000 people had
become members of credit unions
leading up to Bank Transfer Day.
Making the move
In contrast to the CUNA, J.D. Power clearly didn't have a horse
in this race, making its survey results even more credible.
According to the survey, a much larger percentage of customers at
big and midsized banks switched their accounts to smaller banks
last year. The rate averaged between 10% and 11.3%, up from a
range of 7.4% to 9.8% in 2010.
Interestingly -- though not surprisingly -- many of the
customers who switched said that they were already displeased
about other issues at big banks, including customer service. Yet
it apparently took the threat of fee hikes and an organized
movement to finally get them to jump off the fence and actually
take their business elsewhere.
Not the last time
Big banks seem to have gotten the message last year, but
unfortunately, you can expect the quest for more fee-based income
to continue. After all, banks are still reeling from the losses
that the financial crisis caused. B of A is still working through
the myriad issues raised by the problem mortgages it picked up
during the crisis. Moreover, even with the
recent foreclosure scandal settlement
putting an end what could have been a much more expensive,
drawn-out fight, B of A -- along with fellow settling banks
) -- will face a big bill for getting that dispute behind
Addtionally, remember that in many cases, getting rid of
customers was actually
for the big banks. Customers with small balances and few
money-making transactions aren't profit centers for banking
institutions unless they generate lucrative overdraft fees and
other income. Seeing them move away will likely
big banks money and improve their profits.
Even if Bank Transfer Day didn't hurt big banks as much as some
activists may have hoped, it will be much more positive for
customers in the long run for one simple reason: It shows that
they're empowered to take action to boost their own personal
financial situations. By moving to smaller institutions that are
better suited to meet their needs, millions of customers will get
better service and have a more valuable experience. That, in
turn, should help encourage many people who otherwise would've
been too intimidated to take further steps toward smarter money
management moves like investing.
In the end, the winners of Bank Transfer Day were those who
saw the light and made moves to save them money. That's a lasting
lesson that could serve you well throughout your lifetime.
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