A year ago, social media channels were abuzz with chatter about Bank Transfer Day. It started when a young woman working at an art gallery in California got fed up with her mega-bank's high fees, so she posted a Facebook "event page" calling on people to join her in moving their money from big banks to not-for-profit credit unions on Saturday, November 5, 2011, a day she dubbed "Bank Transfer Day."
RSVP's for her event page started to accumulate rapidly, reaching well into the six figures. Traditional media soon began taking notice. As the head of the national trade group for credit unions, I found myself at this time last year doing broadcast interviews on CNN, Fox Business, NPR, and ABC Nightly News. As you might expect, the surge of media attention came and went with the passage of Bank Transfer Day last Nov. 5. But what of the day itself, did it have a lasting impact?
We think so. When you look at the numbers, it's hard to conclude otherwise. The most recent figures on the number of people belonging to credit unions are those for mid-year 2012. Looking at the one-year ending June 30, 2012 -- a period that encompasses the months leading up to and after Bank Transfer Day--we've seen the biggest increase in new credit union members in more than a decade -- a net of nearly 2.2 million new members.
To give you a sense of perspective, that is almost double the 1.2 million average growth we've seen in similar 12-month periods over the past 10 years, and it is four times greater than the 550,000 total of new credit union members who joined over that same period the prior year.
We also saw a huge increase during this same period in the number of new checking accounts opened up at credit unions (nearly 2.9 million), which makes sense because people were looking to avoid high debit card fees.
A third indicator is a web site we launched 20 months ago, www.aSmarterChoice.org, to help people find a credit union they're eligible to join. Before the buzz began over Bank Transfer Day, we were seeing about 2,000 visitors to the site a week. The day before Bank Transfer Day, we hit 70,000 visits and on Bank Transfer Day itself, another 40,000. In the months that followed, the traffic has leveled off, but at a higher level than before -- about 5,000 to 6,000 visits a week.
All this suggests Bank Transfer Day and consumers' negative reaction to high bank fees was not a short-lived affair, but something more sustained. Many of the people who have opened these new accounts at credit unions are younger (a welcome development, given the average age of a credit union member is 48). They are fee-conscious, and discovering most credit unions still offer free checking and lower fees generally (we calculate consumers save $6.3 billion a year in lower fees and better rates using credit unions rather than banks).
Moreover, these newcomers discovered, contrary to what they may have thought previously, that many credit unions today offer the services, access and convenience of large banks, but in a decidedly consumer-friendly way, and with the kind of roots in their local communities that comes from being member-owned cooperatives. (For these same reasons, the "Move Your Money" campaign championed by the Huffington Post also recommended credit unions as an alternative to big banks).
We're finding these new members talk about their experiences via word of mouth and through their social media circles, perpetuating this long stretch of new-member growth.
Interestingly, I've seen comments from some banking executives who are dismissive of the Bank Transfer Day phenomenon, saying they don't really care because these small-dollar accounts that have moved aren't profitable.
That is being short sighted. Even a low-dollar checking account can be a first step to a deeper relationship with a financial institution. But credit unions, as not-for-profits, are also not as concerned as banks about making money on every account.
Kristen Christian, that young California woman who started Bank Transfer Day, has said she is pleased with the results and has no intention of creating a Bank Transfer Day II this year, particularly given Nov. 5th's proximity to Election Day. That is just as well. The effects of the event she launched a year ago continue to live on.