Bank Transfer Day was lauded for helping to nudge consumers toward credit unions. It was belittled as mere media hype. It was feared it would only bring in deposits and not loans, which would tip delicately balanced capital ratios. It was criticized as not the true driving force behind consumers that switched from the big banks to community banks and credit unions. To a degree everyone is right and everyone is wrong, but so what? The results are what matter in this instance.
It doesn't matter why consumers switch their banking relationships or who or what deserves the credit so long as consumers make the move. It doesn't have to literally be everyone on one day to make a point. Bank of America and the other big boys already pulled back on charging debit card or account fees prior to Nov. 5. For now.
As I'm writing this on our deadline, it is two days before Bank Transfer Day. Several credit unions I talked to said they aren't quite sure what to expect, but they're stocking up on membership forms and marketing collateral as well as beefing up staff and extending hours as necessary. Credit Union Times email boxes were flooded with credit unions' Bank Transfer Day press releases and others that were a bit more subtle. But the message was the same: We are different.
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Credit unions are different, and it was great to see copious press releases, which were also delivered to local media outlets, come flooding in. Credit unions were featured on a segment of the "ABC News With Diane Sawyer," and according to Patty Briotta, NAFCU's PR manager, Sawyer specifically asked that the story be held until she was back on the news desk. It's rare for credit unions to get this kind of national attention. Credit unions need to soak it up, but they also need to build on that momentum after Nov. 5, the official Bank Transfer Day.
Read our page 1 Bank Transfer Day story, and you will see that credit union executives are concerned about whether the interest in credit unions is sustainable. Tyler Disburg, senior vice president at Montana 1st Credit Union, laments, "What we need is a sound bite that in a succinct, meaningful way articulates the value we offer and resonates with the general population. 'People helping people' is not saying anything, yet Got Milk? does." (Scroll down and read bullet point No. 4 from my April 16, 2008 column, "See No Evil, Hear No Evil, Speak No Evil.")
There's evidence the hubbub isn't all media hype. According to a statement from CUNA last week, 650,000 consumers joined credit unions since Sept. 29 when Bank of America first announced its $5 fee. Considering that credit union membership growth was completely flat year to date through August with 92.6 million members and growth was negative 0.2% year over year, according to CUNA's "Monthly Credit Union Estimates," that's a very nice boost in just over a month.
More than 80% of credit unions are experiencing membership growth since Sept. 29 based on CUNA's survey of 5,000 credit unions across the country. Not surprisingly, the credit unions with more than $100 million in assets saw the most pronounced growth. Credit unions larger than $100 million in assets account for just 20% of credit unions but serve 80% of all the credit union members.
The concern, as it always is, is whether these newfound members will make their credit unions their primary financial institution. It's crucial that credit unions already were prepared for these cross selling opportunities of their loan products. If not, the golden opportunity of Bank Transfer Day will be just a temporary blip on a less than stellar membership growth trend line. The loans don't have to come on Nov. 5 but, given credit unions' difficulty in finding loans these day, they do need to come in the door (or website).
A few credit unions I talked to this week in calling around about plans for Nov. 5 said the vast majority of their membership start ups and loans came through via their websites. Some executives said that upward of 80% of their new member and loan growth came through online. That's great news. If there is a rush on Bank Transfer Day, websites can help alleviate branch traffic, so long as they can take the added traffic.
By the time you're reading this, Credit Union Times reporters will have spent their Saturday on the scene at numerous credit unions across the country to see what happens or doesn't. In any case, right now–not necessarily Nov. 5–but during this time of angry consumers and banks that tried to take $5 on top of hundreds of billions in bailout money is credit unions' time. Build momentum behind the difference.
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