Credit unions were the beneficiaries of a completely organic outgrowth of support through the Facebook-promoted Bank Transfer Day, which encouraged people to transfer their money to credit unions on Nov. 5. The genesis of this movement was consumer frustration with rising bank fees.
Ultimately, the banks withdrew their plans to charge a debit fee; but it was too little, too late. This was the straw that broke the camel’s back, and consumers, who already were frustrated because of the fallout from the financial crisis, voted with their money and chose Main Street over Wall Street.
Credit unions across the country gained attention for their consumer-centered focus and for holding the line on fees. At a credit union, profits go back to the members in the form of lower fees, competitive interest rates, increased dividends and excellent member service. The member is the boss at a credit union.
A recent Harris Poll underscored the positive relationship that people have enjoyed with credit unions. Poll results showed credit union members are three times as likely as Bank of America customers to experience a trustworthy relationship and feel valued.
The recent survey by the National Association of Federal Credit Unions confirmed that many consumers took action on or before Nov. 5 and joined a credit union:
54 percent of credit unions responding reported an increase in share growth.
More than three-fifths (63.9 percent) said they experienced growth in membership in October, with nearly a quarter of this group reporting the growth was 20 percent higher than in September.
NAFCU’s credit union locator site, culookup.com, broke all previous records for daily visitors on Bank Transfer Day. In fact, culookup.com has seen a 700 percent increase in average daily visitors compared with October 2010.
The increase in credit union membership also strengthens NAFCU’s advocacy efforts on behalf of the industry. Credit unions now have over 93 million members — a number that cannot be ignored heading into an important election year. The influx of new credit union members will make it harder for lawmakers to ignore efforts to remove outdated and arbitrary restrictions on credit unions, such as the credit union member business lending cap.
The recent migration of members to credit unions was a victory for Main Street. This victory will be incomplete without the much-needed access to capital that many of those members who own small businesses critically need. Unfortunately, the current member business lending cap severely limits credit unions’ ability to lend. That is why NAFCU is urging Congress to act and truly ensure this Main Street success story continues, and ultimately, helps create jobs and puts our economy on the road to economic prosperity.
Bank Transfer Day has shone a great spotlight on credit unions and created an opportunity to dispel several misconceptions about credit unions that may be holding some people back from joining.
Consumers won’t be sacrificing convenience or accessibility when they join a credit union — quite the opposite. Credit unions today boast a plethora of products and services including online banking and access to the largest network of free ATMs. Additionally, credit unions are well-equipped to manage the recent influx of new members.
NAFCU is glad that the hallmarks of credit union membership are attracting a new generation of members. Putting members first and a prudent business model have earned credit unions their place on center stage — and will continue to help credit unions earn their members’ trust every day.
Credit unions are no longer the best kept secret in banking. NAFCU hopes this renewed interest in credit unions endures and encourages more and more Americans to join the millions who already enjoy the benefits of credit union membership.
Fred R. Becker Jr. is president and chief executive of the National Association of Federal Credit Unions.