The big banks may have dropped the debit card fees, but the credit unions are the ones picking up the business.
Long touted by consumer groups as a more consumer-friendly option than large commercial banks, the nation’s not-for-profit credit unions saw a significant jump in new members and deposits last month as momentum in the Occupation Wall Street campaign has increased, and many of the big banks rescinded, debit card fees.
The credit unions pulled in some 650,000 new customers since September 29, when Bank of America announced it would add a $5-a-month debit card fee, an industry trade group reported. Deposits from new customers surged to $4.5 billion, according to the survey released Thursday of 5,000 credit unions by the Credit Union National Association.
The deposits from these new customers were about as much as credit unions’ get from their entire base of existing customers in a typical month.
A Harris Interactive poll released Thursday showed that big banks are having problems with customer loyalty. The study found that 17 percent of those who use large banks are not likely to stay with their provider. Almost 90 percent of credit union clients plan to stay put compared to almost 60 percent of big bank clients.
The recent uproar over fees, and specifically debit card fees, has created an “us-versus-them” attitude of banks with some customers. This has clearly provided opportunities for credit unions and community banks. However, as all financial institutions, large and small, will be shouldering the cost of value-added services, they will need to find ways to communicate the value provided by offering these services, no matter how or where the underlying fees reside.