Bye bye, banks: 650,000 switched to credit unions last month!

  • Published on November 4th, 2011

bank transfer day coming November 5

November 5 has been designated Bank Transfer Day or Move Your Money day, the day to send the message to the too-big-to-fail Wall Street banks that they have failed us.

But it looks like the tsunami has already begun. The Credit Union National Association (CUNA) says that some 650,000 people have opened credit unions in the past month – more than in all of 2010.

Bank transfer day november 5Customers were livid after Bank of America announced they would introduce a $5 monthly fee for using their debit cards, as a way of keeping their profits high after a new federal law had tried to limit them. But it looks like they’re feeling the heat – earlier this week they scrapped the fee. Other banks have also backed down from planned fees.

“These results indicate that consumers are clearly making a smarter choice by moving to credit unions where, on average, they will save about $70 a year in fewer or no fees, lower rates on loans and higher return on savings.” said Bill Cheney, president and CEO of CUNA.

But the big story is the way people are taking control of their own financial future, and returning autonomy to local institutions.

CUNA estimates a total of $4.5 billion has moved out of the big banks. That may not hurt the banks all that much, but as David Dayen notes at FireDogLake, “It’s not about “hurting” the bank’s bottom line. It’s about refusing to participate in a corrupt system of finance, and voting with your wallet to support institutions that are better stewards of your money. It’s not about bringing down the finance sector. It’s a personal issue.”

As CUNA points out, more than 93 million Americans have already chosen a CU over a bank.

Credit unions are financial cooperatives owned by their accountholders, rather than outside investors.  Because they are member-owned and not-for-profit, credit unions return their excess earnings back to the members they serve, typically through higher rates on savings accounts, lower rates on loans, and by charging lower and fewer fees. The money stays local and is plowed back into the community.

The next step: Going beyond “Move Your Money” to Move Our Money” : Getting cities and other institutions to switch from the big banks as well. They’ve already gotten a commitment from the city of San Jose to move their money away from Bank of America.

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About the Author

Jeremy Bloom is the Editor of RedGreenAndBlue. He lives in New York, where he combines his passion for the environment with his passion for film, and is working on making the world a better place.


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