Bank Transfer Day inspires Richmond to move its money

Bank Transfer Day materialized on the heels of the nationwide Occupy protests. Angered by the indiscretions of large financial institutions, Americans were encouraged to to move their money from large banks to local ones. Are local banks and credit unions better off as a result?

November 9, 2011; 6:00 AM • by Nathan Cushing

If you were one of the many people that began the process of moving your assets from a national bank to either a community bank or credit union as part of last Saturday’s Bank Transfer Day, you have an unexpected person to thank: a Los Angeles art gallery owner.

Kristen Christian was, like millions of others, frustrated with paying high bank fees to her national bank. She organized Bank Transfer Day on Facebook. Not just an act of catharsis, Christian’s wish was to inspire those with similar frustrations to move their money to a local banking institution. Last Saturday, over 78,000 people nationwide signed up for the cause.

The Credit Union National Association (CUNA) reports that more than 650,000 new members transferred $4.5 billion in assets in the month leading up to Bank Transfer Day. Most of these transfers were likely inspired by Bank of America’s announcement in late September that the company would charge their members a monthly $5 debit card fee (a decision on which they have since gone back).

Glenn Birch, Public and Media Relations Director at the Virginia Credit Union, said in an email that the credit union witnessed “very strong numbers of new members and accounts in the weeks and days leading up to Bank Transfer Day.” Here’s the data that Birch included.

There was a 60% increase in new members–approximately 2,300– to the Virginia Credit Union in October 2011 compared to October 2010. Birch went on to write that, “the number of savings and checking accounts grew even more,” 99% and 79%, respectively, versus last October.

Although not a credit union, but a for-profit business (unlike credit unions), Virginia-located Union First Market Bank loans money only to those within it’s territorial footprint–namely the Richmond and Charlottesville area. Although Union First Market is still finalizing the total number of membership and assets added as a result of Bank Transfer Day, Bill Cimino, Vice President of Corporate Communications, said that the bank saw a “slight increase” in traffic to their local branches on Bank Transfer Day compared to their typical Saturday numbers.

Chief Economist at CUNA, Bill Hampel, said that “the real story” of Bank Transfer Day is not so much the asset growth (although that is remarkable in-and-of itself), but “membership growth and the new, mostly young members that credit unions have now gained.”

Update

Tina Endicott, Vice President of Marketing and Business Development at Partners Financial Federal Credit Union, told RVANews late Wednesday afternoon that the locally-based credit union has seen “quite an uptick” of new members. There was an approximate 20% increase in new customers for the credit union in the weeks leading up to Bank Transfer Day. Endicott also said that Partners Financial member service representatives handled a swell of calls from prospective customers asking about the credit union’s various accounts, “specifically our checking accounts” and debit cards, both of which are free to members. “I think people were doing a lot of shopping,” says Endicott.

Speaking of larger banks flirting with the idea of recouping revenue lost under the Dodd-Frank Act, “we understand their need to change their strategy.” Partners Financial, however, did not want to criticize the larger institutions as they try to satisfy very dissatisfied customers, but “push the positive benefits” of belonging to Partners Financial.

photo by YourAnon