(Fred Lynch) [Order this photo]
The movement stemmed from already-rampant public distaste for the government bailout of large banks coupled with a social media call for a "National Bank Transfer Day" on Nov. 5. That Saturday alone brought 40,000 new members and their $80 million to credit unions nationwide, according to the Credit Union National Association.
The Sept. 29 unveiling of Bank of America's now-rescinded $5 monthly debit card fee sparked the mass exodus, which occurred throughout October. In a CUNA survey of 5,000 credit unions, a majority attributed their new membership growth since that date to consumer reaction to newly imposed bank fees and the Bank Transfer Day idea.
"We've seen fairly large growth in credit union members who are leaving banks," says Jim Cauble, president of Cape Regional Credit Union in Cape Girardeau. "They're leaving because of fees, adverse publicity from Wall Street -- people are looking for and hoping for a safer place to put their money, because we are not insured by the same federal organization."
Some believe the popularity of credit unions will continue to grow. Bill Cheney, CUNA president and CEO, says consumers are rediscovering the services offered by local credit unions, which are not-for-profit, member-owned alternatives to banks that provide all of the same service.
"We're not owned by stockholders; we're owned by members," Cauble explains. "Each member has one vote and the membership actually elects from the membership a director. The director essentially hires me and I hire everyone else."
According to Cauble, customers are drawn to the credit union for its low rates, great service and convenience, with three locations in Cape Girardeau County. Overall, he says, some people just find credit unions easier to work with.
"We offer basically the same services but sometimes it costs less to work with us because we don't have stockholders to answer to," says Cauble. Credit unions are able to offer better rates and lower fees, even in this low-interest environment, says Cheney. Studies have shown people living paycheck to paycheck save more at a credit union than the average customer because they use more credit union services.
"It's an entirely different philosophy," says Cheney. "Banks use people to make money; credit unions use money to help people. Credit unions truly are groups of people coming together to help each other, versus doing business with banks, which ultimately answer to their shareholders."
Whereas anyone can walk into any bank and open an account, credit unions are slightly different, with fields of membership eligibility. For example, Tucson Old City Pueblo Credit Union in Tucson, Ariz., is limited to city employees and select groups. Cape Regional Credit Union can only serve customers who live or work in Cape Girardeau County. In Southeast Missouri, there are other independent credit unions in Sikeston, Poplar Bluff and the Park Hills area.
"Anyone can be a member (at Cape Regional Credit Union) as long as they live (or) work in Cape Girardeau County. It just takes about 10 or 15 minutes of paperwork," says Cauble.
Robyn Gautschy contributed to this report.
Learn more about ...
* Joining a credit union at asmarterchoice.org
* Comparing credit union rates versus bank rates at ncua.gov (look under 'Resources and Information')
* Making smart financial decisions at mycreditunion.gov
-- CTW Features