Amid the hype and hoopla, the protest marches, and the bank
occupations, it seems something interesting happened on Bank
Transfer Day: People actually moved their money. The Credit Union
National Association, or CUNA, which has been thrust into the
unexpected position of suddenly being the cool kid at the party,
reported that nearly 700,000 people have become members in the
weeks leading up to the event, with 40,000 alone joining a local
credit union Saturday. Credit unions recorded $80 million in new
savings and made $90 million in new loans to new and existing
customers.
Now that we can claim Bank Transfer Day a success, let's take
a look at what we learned.
You can opt out of the big bank system
The beauty of Bank Transfer Day was that it was inherently
Foolish. Much like we Fools advocate for understanding and
building your own portfolio, Bank Transfer Day advocated for
understanding and building your own banking. It empowered regular
people to take an active role in managing the bigger picture of
their money. It was led by the notion that people without
million-dollar portfolios
could still determine how and by whom their money is being
used.
You can do it without living outside in a tent
Bank Transfer Day worked because it appealed to the many people
who are not able, interested, or willing to take part in a
camp-out protest. While Occupy Wall Street protesters took part
in many of the activities on Nov. 5, organizing marches and
rallies in several cities, those activities were ancillary. The
organizer of Bank Transfer Day made it clear this was a separate
movement. Holding banks accountable, while important, was not the
primary motivation. Whereas Occupy Wall Street is attempting to
reason with a crazy person (large banks), Bank Transfer Day
simply ended the conversation.
Opting out of the big bank system may not affect it much
(and that's OK)
As I noted on
Monday
, individual accounts with moderately low balances -- the type
that would have been hit hardest under many of the proposed fees
-- don't typically generate much revenue for larger banks. CUNA
estimates that credit union members save $6.3 billion each year
just by doing business with a credit union, an average of just
under $70 per member. That won't hit
Bank of America
(
BAC
) too hard -- and in fact, big banks may be just as happy to see
those accounts go. But for many of the people who switched to a
credit union, the satisfaction that comes with that extra $70 a
year may be priceless.
It's not over
The proposed fees that prompted Bank Transfer Day have mostly
vanished. B of A has rescinded the $5 monthly debit card fee that
prompted the most vitriol, and the other banks fell in line like
dominoes.
JPMorgan Chase
(
JPM
) ,
Wells Fargo
(
WFC
) ,
Regions Financial
(
RF
) , and
SunTrust
(
STI
) have all backed away slowly from recently announced fees and
pilot fee programs. But that doesn't mean other fees aren't
coming. Other banks, including
BB&T
and
Fifth Third
, are looking for additional ways to generate revenue.
Fool reader Travis Tredwell works for a local credit union and
shared some advice it gives prospective customers: You should
remember that allowing a financial institution to hold your money
is a privilege, one that you can take away.
Want to see how these companies will fare in the coming
quarters? Add
these companies
to My Watchlist.
Did you switch to a credit union? Tell me about it below.
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