MADISON, Wis. (10/4/11)--Credit unions made an impact last weekend and yesterday among national media reporting on consumer backlash from debit card-fee hikes by large banks seeking revenue after limits were imposed on debit interchange by the Dodd-Frank Act . The media--including ABC's "Good Morning America," The New York Times
, National Public Radio
and Yahoo! Finance
--told consumers to consider switching to a credit union.
"Good Morning America" Monday, Elisabeth Leamy reported on "Tips and Tricks to Avoid New Bank Fees." News last week about Bank of America's plans to charge $5 per debit card purchase transaction produced "an immediate backlash," with protests from consumers causing the bank's website to crash, Leamy said. She reported that other banks could follow in one of the "unintended consequences" of the debit card interchange provision. Leamy, who is a past guest on the Credit Union National Association's (CUNA's) Home & Family Finance Radio Show, is familiar with credit unions through her work on savings makeover segments that featured credit unions in New York and New Jersey. Among the "workarounds" consumers can use against such fees include considering a credit union. ABC's website, abcnews.com, features a link where viewers can go to find a credit union, she said. Other reports:
* "Marketplace" from National Public Radio (Sept. 30): BofA's fee has "angered consumers who haven't forgotten they helped bail out the bank as taxpayers." However "BofA's nearly 39 million debit card holders do have options: Switch to a smaller bank or credit union, or just start putting all their purchases on a credit card," said the report, entitled "Bank of America to charge for debit card use." * In "Question: Why Pay Bank Fees?" The New York Times columnists Ron Lieber and Ann Carrns reported that Elvita Dominique of Harlem, a BofA customer had met with the bank to go over her options. Interviewed as she was leaving the appointment, she said one option she is considering is joining a credit union. "The fed-up have plenty of places to go to find a better bank these days," wrote Lieber and Carrns, adding readers can use creditunion.coop to locate "a credit union that will take you in." A student at University of Arkansas also indicated she might switch. A debit fee is "an inconvenience, especially for students. No one carries cash." * Yahoo.com noted in its "SmartMoney" article, "Is It Time to Ditch Your Debit Card?" that "for anyone who still really wants a debit card, smaller banks and credit unions may be the best alternative." * CreditCards.com (Oct. 3) in its article, "9 ways to avoid debit card usage fees," advised: Switch banks. "Consumer advocates urge debit cardholders to do their homework and find lenders than don't charge fees. That is most likely going to e a local credit union or small community bank." * In the Denver Business Journal Online (Sept. 29) , Bankrate.com Senior Analyst Greg McBride said not all banks are expected to charge the fees. Many larger banks have added the charges so the impact is larger, but he advised consumers to shop around. "Look at community banks, credit unions and online banks," he said. "They are still very viable for free checking and free debit cards." * In "Bank of America Charges Debit Card Fee: Time to Consider CUs?" International Business Times (Oct. 2) reported that some consumers on BofA's Facebook page commented they would switch to credit unions. BECU, Tukwila, Wash., told Seattle Post-Intelligencer that business at branches is "bustling." The credit union did not tie the increase in business to the bank's fees, but said it has steadily gained members leaving for-profit banks and growing fees. Its membership grew by 18% over the past 12 months. The Credit Union National Association (CUNA) in the article said that credit unions don't issue stock or pay dividends to outside stockholders, so they can offer lower loan rates, higher interest on deposits and lower fees. The article also reported that credit unions' CO-OP Network boasts free access to 29,000 ATMs and provided a link to an ATM online locator. * WTVM-TV in Georgia's "'Fed Up With Fees? Ways to Break Up With Your Bank" featured MEA FCU, which is offering money back for using a debit card. Credit unions "don't nickel and time" members and they don't have fees on debit cards, said the credit union.
These articles joined others reported earlier on Monday, including an interview with CUNA President/CEO Bill Cheney on Fox Business Network
in which Cheney told reporter Gerri Willis that the credit union difference makes the financial cooperatives a better deal for consumers than profit-driven banks. Los Angeles Times
and The New York Times
also reported examples of credit unions as a solution to the debit fees (News Now