WASHINGTON (11/7/11)—The official Bank Transfer Day came and went on Saturday, and by now the dust has settled and tallies have been taken of how many consumers switched from being bank customers to credit union members on the day that was so much ballyhooed in advance.
But regardless of the numbers of new accounts or increased deposits generated by "the Day," the real story for credit unions is the lasting benefits that the event has fostered.
Increased awareness of credit unions and the credit union difference is clearly one of the big benefits.
Just as big banks were experiencing what might seem like insurmountable reputational damage--when announcements of new fees were coupled with consumers' residual resentment of bailouts--credit unions were highlighted in media across the country as an important resource for consumers looking for a better way to do their banking business.
Scores of stories nationwide highlighted that credit unions are not-for-profit and owned by their members, compared to banks that have a responsibility to provide a good return to their shareholders.
More consumers than ever before heard the message that credit unions generally offer higher rates on savings, lower rates on loans, and lower fees than the megabanks.
"This gives credit unions an incredibly strong new foundation from which to launch future branding campaigns," Mark Wolff, Credit Union National Association (CUNA) senior vice president of communications, observed Saturday.
As USA Today put it "credit unions view raising fees as a last resort." Or as The Los Angeles Times noted, "Credit unions…are set up for such hands-on service at a low cost. Owned by members who are linked by jobs or geography, their core focus is on
consumer accounts, although some these days are doing more small-business lending." And these two represent dozens of such articles feature by national media.
Myth-busting is another forward-going benefit delivered by the media attention.
The extensive interviews with consumers helped identify for credit unions where confusion points exist, so going forward from Bank Transfer Day credit unions will know where they have to strengthen their message.
Membership rules were questioned, and CUNA, state leagues, and credit unions got extensive opportunity to note that with a quick visit to sites like CUNA's Smarterchoice.org, almost anyone can find a credit union to join.
When convenience was challenged, CUNA and credit unions explained how credit unions don't compete with each other as banks do and work together to benefit all members.
CO-OP Financial Services and FSCC (Financial Service Centers Cooperative Inc.) informed media in separate campaigns that convenience is not an issue for many credit unions.
CO-OP Financial Services, manager of CO-OP Network, a nationwide network of 28,000 ATMs for members of 3,000 participating credit unions, for instance launched an information campaign in mid-October that was viewed by more than 500 editors and appeared on numerous sites, including Finance.Yahoo.com, Marketwatch,
Investor and Optimum Online as of the end of the month. At the same time, FSCC explained the convenience of shared branching networks.
Another example of myth debunking was called just that: AOL's DailyFinance.com, in an article entitled "5 Credit Union Myths Debunked."
Written by The Motley Fool columnist Matt Cropp, it acknowledged the public outcry on fees and the fact that "normally low-profile credit unions have been receiving a great deal of attention as an alternative to the big banks." This piece, and others like it, help to clear up five misconceptions about credit unions. Instead it reported that:
• Many credit unions have community charters and are easy to join (readers were referred to aSmarterChoice.org to locate a credit union);
• Credit unions offer a full range of competitive products and services;
• Credit unions through ATMs and shared service centers offer nationwide convenience;
• Savings at credit unions are safe and sound and backed by the government; and
• Members buy a share and "own" the credit union.
And what about the influx of deposit?
CUNA Chief Economist Bill Hampel said Bank Transfer Day could drive the credit union system over $1 trillion in total assets.
But Hampel emphasized that the true impact of Bank Transfer Day may not be seen at first.
"The real story," he said, "is not asset growth, but membership growth and the new, mostly young members that credit unions
have now gained."
Attracting younger members has been a topic of concern for years among credit unions, but Bank Transfer Day—which reached well in excess of 600,000 through its Facebook page alone—was in large part speaking directly to the younger adult crowd.
Around 650,000 new members transferred a total of $4.5 billion in funds into new credit union savings accounts in the month leading up to Bank Transfer Day. An estimated 80% of credit unions saw their membership increase in October.
Since Sept. 29, California-based credit unions have seen the biggest gains, bringing in an estimated 90,000 new members and $624 million in new deposits. Texas credit unions also saw a large surge in new deposits, gaining $326 million in new deposits from 47,000 new members. In total, 21 of 50 states and the District of Columbia have seen membership increases of 10,000 or more in the past month.
One of Bank Transfer Day's longest lasting legacies will unfold, Hampel said, as those new members relate their positive credit union experiences to their friends and families, creating even more new members, he added.
For more about Bank Transfer Day, see related article: CUs were prepared for Bank Transfer Day--and the future.