It's Bank Transfer Day which means it's a day when the enthusiasm from the Occupy Wall Street movement spills over into the real economy. It's a day of encouragement for people to move their money from a Too Big To Fail bank into a credit union.
Today is Bank Transfer Day, the day that small community banks and credit unions have been eagerly awaiting. They're hoping that the Occupy movement has swayed investors to move their money from what's referred to as a "Too Big To Fail" bank into a credit union or a smaller bank.
Business Insider reports that even though the big impetus for most Bank of America customers to switch has been removed, now that the bank has retracted its decision to tack a fee onto monthly debit card usage, if you have decided you really want to do this, what's the process? Number one, it's bureaucracy that you'll be facing. But, have no fear, your bank probably won't care very much about your leaving. As Felix Salmon points out,
"The big banks don't particularly want all those retail-deposit funds — they're getting precious little interest on them, and they come with all manner of expensive obligations to mail out statements and provide smiling service at teller windows and generally do the whole customer-service thing, which as we all know big banks are very bad at. Historically, they've done what they have to do on that front because they've been able to extract all manner of overdraft fees and interchange fees and the like, but that fee income is shrinking now, thanks to Dodd-Frank, and the fact is that millions of small bank accounts are actually unprofitable now for the big banks, and those banks won't shed many tears if those customers go off to a credit union instead."
Meanwhile, The Street reports that credit unions and community banks are hauling in significantly higher volumes of applications for new account openings. The Credit Union National Association says its organizations have added more than 650,000 members and $4.5 billion in new deposits in the past month.
Some smaller banks like First Pactrust Bancorp in Los Angeles have been actively seeking out customers who are sick and tired of dealing with big banks, hoping to gain some market share through good old-fashioned banking practices based on relationships. CEO Greg Mitchell says,
"Consumers are dissatisfied with their experience with big banks. The debit card fees, which has now been withdrawn, was the last straw on the camel's back. Consumers want to go back to a place where they can get a predictable level of service and some respect."
First Pactrust has begun a promotional ad campaign which offers customers who open a new account, $60 and the bank intends to stay open longer on Saturday in honor of Bank Transfer Day.
But some consumers say they are not going to switch. In the comments section of the TheStreet.com, is Gwen,
I would love to move my money to a credit union but the problem is they don't have many ATMs.... so what do I gain? Whatever you situation, think it all the way through. This movement thing does not make sense for everyone and in the end you may end up hurting yourself.