While banking industry analysts measure the effectiveness of "Bank Transfer Day," the Credit Union National Association reports that many Americans didn't wait until Nov. 5 to move their money. A CUNA survey of 5,000 member institutions revealed that over 650,000 consumers joined credit unions between Sep. 29 and Nov. 1. The five-week figure beat the entire number of new credit union members for all of 2010.
In a statement to reporters, CUNA President and CEO Bill Cheney said that his organization's members had seized the opportunity to capture the business of dissatisfied bank customers across the country. Cheney said that many of the largest credit unions had prepared for Bank Transfer Day by adding staff, preparing account "switch kits," and offering referral bonuses to members. According to CUNA, the "Move Your Money" movement has already shifted billions of dollars from banks to credit unions over the past few weeks.
Credit union credit cards look more like premium bank services
Some of the country's largest credit unions have developed products and services that rival those of major banks, but with alternative fee structures and application requirements. For instance, Pentagon Federal Credit Union eliminated foreign transaction fees from all of its member credit cards in October. Previously, only cardholders with the PenFed Promise Card and the PenFed Premium Travel Rewards American Express Card enjoyed the money-saving perk.
Panelists at a banking industry conference in Las Vegas told reporters from Reuters and UPI that banks had lost some traction with consumers by linking debit card fees to provisions in the Durbin Amendment of the Dodd-Frank Act. Bank of America, Chase and Citibank announced plans to scrap the rollout of new debit card fees. In addition, the major banks hinted that they would reserve many of their best credit cards for customers with checking and savings accounts at the same institution.
According to a new survey from Equifax, banks have also started using their higher risk tolerance to recruit more subprime credit card customers. Credit unions like PenFed can afford to keep fees low by offering credit cards for excellent credit. Large banks instead use subprime offerings to build loyalty among consumers who might not qualify for a credit union credit card, Equifax researchers told reporters.