The Facebook page for Bank Transfer Day.
The Facebook page for Bank Transfer Day.
Credit unions didn’t declare Saturday as Bank Transfer Day, but they’re sure seizing on the powerful forces that are pushing customers their way.
The event, urging people to transfer money out of banks, was hatched by a Los Angeles gallery owner and spread through a Facebook page that has almost 36,000 followers. Columbia Credit Union is running a steady stream of ads in The Columbian, including a full-page ad in this past Sunday’s newspaper with the blaring message: “Fed up? Sign Up.” Other local credit unions are staffing up for a possible influx of new customers during Saturday banking hours. And the Northwest Credit Union Association, a trade group for Oregon and Washington, is offering consultation to its members, including a “sample news release, interview talking points, and consumer information.”
The frenzy is being fed by the latest Internet-fueled revolt against an attempt by business to raise costs to consumers. Bank of America’s announcement a month ago that it would charge a $5 per month fee for debit card users sparked the kindling of public anger over rising living costs, as well as lingering resentment of government-funded bank bailouts. The bank scrapped the fee idea this week, and other banks have lowered their trial balloons for debit card fees.
“The fees pushed a lot of people over the edge,” said Todd Pietzsch, spokesman for BECU credit union, the state’s largest, with 725,000 members including about 3,000 in Clark County. “People are frustrated with the banking industry.”
That’s true of Vancouver resident Mary Curtis, who plans to close her account at JP Morgan Chase and switch to a credit union. Chase doesn’t charge her for using her debit card, but Curtis says she has other reasons for moving her business.
“The big banks are pretty much the reason behind our (economic) problems,” Curtis said. “I’ve never had a problem with Chase, but I have heard it’s been one of the banks that’s been in the mix of all the things that happened leading up to the recession. I want to support the effort of trying to keep things local and take support away from the big banks that caused the problems.”
The various “Occupy” campaigns flowing from Occupy Wall Street have fed the rebellion, Pietzsch believes. “They have carried that torch and message,” he said. “They’re encouraging and supporting credit unions.”
The shift to credit unions started gaining traction even before Bank of America lit the fuse. BECU, originally a Boeing employee credit union that is heavily concentrated in the Puget Sound region, has broken records for new members three months in a row. It attracted 8,700 new members in August, 9,400 in September, and 16,000 last month, Pietzsch said. Typically it draws some 6,000 to 7,000 new members a month.
Locally, Columbia Credit Union reports a 15 percent membership growth, with 10,000 new members, over the past year. Then there’s iQ Credit Union, which reported 2.1 percent growth in membership this year, but added 25 percent more new accounts last month than in October 2010.
Bank Transfer Day “has certainly ramped up people’s awareness, and they’ve been asking about our service,” said Danette LaChapelle, senior vice president and chief communications officer for iQ Credit Union.
All of the buzz is enough to leave bankers feeling unfairly beleaguered as they speculate about the impact of the grass-roots Bank Transfer Day, which, according to media reports, was launched by a Los Angeles art gallery owner with no ties to credit unions other than personal membership.
“I don’t know what effect that’s going to have,” said James M. Pishue, president and CEO of the Washington Bankers Association. “I’m as curious as anybody.”
Pishue thinks that much of the anger is misdirected: A Congressional decision to lower fees businesses pay for debit transactions will reduce bank revenues by some $7 billion to $8 billion annually, he said, and businesses aren’t likely to pass those savings on to consumers. Federal bailouts of banks have been repaid with interest, and Pishue argued that much-criticized bank profits are good for the economy — they mean more jobs in the industry, more taxes paid for government services, and healthier pension funds for retirees.
“I would think everyone would want corporations to make profits,” he said. “The main issue we have is unemployment has been so high for so long it’s just affecting everyone.”
He thinks anger should be directed to Washington, D.C., not Wall Street. But if consumers want to take out their wrath on Wall Street, he says they should move their money to local community banks instead of credit unions. As nonprofits, he says, credit unions are exempted from federal income tax, state business and occupation tax and sales tax. “If they look and act like banks, they should be taxed like banks,” Pishue said. “We are more than willing to compete with them on an even keel.”
But it will be tough for that message to break through, at least not when anger at banks remains white-hot. JP Morgan Chase CEO Jamie Dimon is scheduled to speak at a Portland Business Alliance banquet Thursday. Occupy Portland protestors plan to greet him.
Columbian reporter Paris Achen contributed to this story.