MADISON, Wis. (10/18/11)--Some credit unions are reporting significant hikes in new members and membership inquiries since Sept. 28, the day it was disclosed that Bank of America (BofA) customers would be charged $5 a month to use their debit cards. Since the disclosure, other banks have hiked fees, and created a backlash among consumers. Some consumers are switching to credit unions and community banks to avoid the big-bank fees. Last week the Credit Union National Association (CUNA) canvassed a number of credit union CEOs, most of whom said they were seeing a spike in inquiries and new account activity from consumers. Here's a rundown on some of the credit unions reporting increased membership applications:
* LGE Community CU, Atlanta, Ga., swapped out its ads, which focused on refinancing, and replaced it with ones that tell consumer that its checking accounts are still free. In the past three weeks, online applications for membership totaled 70 a day, compared to its usual 25 a day, spokeswoman Andrea Shorr told the The Atlanta Journal-Constitution (Oct. 16). * Delta Community CU, also based in Atlanta, said its monthly average of 1,500 applications through July jumped to 2,200 in August and 2,300 in September. Since then, "folks are coming in and they're pretty upset [about bank fees]," Todd Marksberry, executive vice president and chief operating officer at the $4 billion asset credit union, told the Atlanta newspaper. * LA Financial CU, a $345 million asset credit union in Pasadena, Calif., said its member requests skyrocketed (American Banker Oct. 17). It reported receiving 175 applications in the two weeks since the BofA's fees were disclosed, compared with 27 during the same period in 2010. * Credit Union of Atlanta will offer online account opening to accommodate a spike in new members. It grew $4 million in assets since the end of August, which is unusual for the $71 million asset credit union (American Banker Oct. 17). * SAFE CU, A $1.8 billion asset credit union in North Highlands, Calif., reports a 54% increase in online account applications in the past month (MSP News Oct. 17). The article also suggested consumers go to ASmarterChoice.org to locate a credit union. * The Golden 1 CU, Sacramento, Calif., has been running newspaper ads that encourage consumers to "Say 'No!' to Big Bank Fees!" and promises free checking accounts and debit cards with no monthly fees. As a result, there's been an "uptick" in new account inquiries (MSP News Oct. 17) . * BECU, Tukwila, Wash., signed up 5,400 new members in the week and a half before Oct. 14. The $10 billion asset credit union usually signs 6,000-7,000 new members a month but if the current surge continues, it will nearly triple that rate for October (Puget Sound Business Journal Online Oct. 14). * Washington State Employees CU, a $1.6 billion asset credit union based in Olympia, Wash., said that since Sept. 28, its new accounts have outpaced the previous month's by 22%. Spokeswoman Ann Flannigan told the Puget Sound Business Journal that the spotlight on credit unions' good value and great service has never been brighter. She noted the contrast between what is being delivered by big banks on those fronts versus credit unions "has never been bigger." * Bay State credit unions are already seeing some increased interest, according to Rob Kimmett at the Massachusetts Credit Union League. For consumers facing higher fees for other services, a debit card fee is the last straw, he told the Taunton Gazette (Oct. 17). He called the fees "a major irritant" and a "thumb in the eye kind of a thing."
CUNA's website for consumers, aSmarterChoice.org, saw double its typical level of traffic. A boost in web traffic for the site has happened before when credit unions received national media attention, but this time it is more sustained. From Sept. 29 to Oct. 9, roughly 36,000 visitors have entered the site. During the past seven months, visits averaged about 16,500 per month. That means the past two weeks have seen roughly two months' worth of visits. CUNA President/CEO Bill Cheney called the attention "nothing short of extraordinary." He told The New York Post.com
Sunday, "We've seen surges in the past; most of the time it drops back down, but this is more sustained and seems to be gaining momentum." For more, see related stories "Cheney: Bank backlash leads to growing CU membership" in the Washington section and "Reuters
note CUs are bank-fee alternative" in the System section of News Now