Americans are moving their money away from banks

| November 3, 2011 | 10 Replies

Last year I moved my money. I made the move in response to a campaign started by Arianna Huffington at the end of 2009.  She urged that we stop supporting big banks (especially too-big-to-fail banks) and start supporting local banks and credit unions. I moved my money to a credit union (I chose Gateway Metro Credit Union), and I’ve never looked back. Credit unions are non-profit; they are service oriented, offering low fees or no fees. My new credit union offered me great customer service. In my city of St. Louis, credit unions offer you the use of each others’ ATMs without fees. When I asked what the minimum balance was for my new checking account, the woman from the credit union said, “There is no minimum balance.” I had been struggling with my bank for 3 weeks to set up an HSA savings account, for which it was going to charge me $25/year. The credit union had the account set up in 15 minutes and is not charging me any fee. The credit union offers online check paying and other account services comparable to those offered by the bank I formerly used.  I am much happier doing my banking at a local credit union, especially thanks to the superior customer service.

Bottom line: If you are still keeping your money at a big bank, there are many good reasons for moving it. Think about taking it local, especially to a credit union. It turns out that after some of the big banks starting imposing new fees last month, there has been a mini-stampede away from the big banks and toward credit unions:

The Credit Union National Association (CUNA) reports that a whopping 650,000 Americans have joined credit unions since Sept. 29 — the date that Bank of America announced it would start charging a $5 monthly debit fee, a move it backed down on this week. To put that in perspective, there were only 600,000 new members for credit unions in all of 2010. “These results indicate that consumers are clearly making a smarter choice by moving to credit unions where, on average, they will save about $70 a year in fewer or no fees, lower rates on loans and higher return on savings,” said CUNA President Bill Cheney.

Share

Category: Economy, Sustainable Living

About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich and his wife, Anne Jay, live in the Shaw Neighborhood of St. Louis, Missouri, where they are raising their two extraordinary daughters.

Comments (10)

Trackback URL | Comments RSS Feed

  1. Jim Razinha says:

    Credit Unions…been using them for 30 years. Never liked the strings attached to banks and their accounts.

  2. Tim Hogan says:

    I’ve been banking at UMB Financial Services for over 15 years. No fees, we’ve done a home loan, car loan and I have set up retirement accounts, purchased my disability and long term care insurance through associates at UMB. I always leave there having been served and obtained value.

  3. Niklaus Pfirsig says:

    I’ve been banking with a credit union for over 30 years. Last December, I was pleasantly surprised when the credit union refunded $396 of mortgage interest. Would any of the multinational corporate “too big to fail” banks do that?
    Never.

    A few years ago, the corporate for-profit banks did attempt to get new regulation in place that would prevent credit unions from competing with banks. They will probably try again.

    I had a small epiphany this morning. Bank of America is often abbreviated as BOA. A boa can refer to a large constrictor, a snake that squeezes and crushes the life from its victims. How appropriate!

    • Jim Razinha says:

      For-profit banking and for-profit health insurance – both bowing to the stock holders. As the last industrial nation to still insist on protecting for-profit health insurance corporations, we reap the seed we sow. So too with banks.

      Navy Federal Credit Union stands ready to advance military members AND civilian Dept. of Defense employees their pay on the regular payday should the government shut down. I don’t recall seeing any banks offer that.

  4. Erich Vieth says:

    Niklaus: A national association of credit unions puts it bluntly: ” The bankers are out to eliminate credit unions from the financial services industry and to add new taxes to 85 million Americans.”

    The attack by banks is sinister and is sure to intensify given the fact that so many people are waking up to the customer abuse caused by many big banks. http://www.cuna.org/initiatives/bank_attack/ba_fightison.html

    and consider this:

    Banks have had a long-standing resentment of credit unions. Although banks have well over 90% of the banking business, they claim credit unions have an unfair advantage because they are not required to pay income taxes. (Interestingly, banks have not rushed to convert their charters to become credit unions to take advantage of the alleged tax advantages.)

    It’s more likely the banks don’t like having the competition because it forces them to hold down their own fees. In communities without a significant credit union presence, fees at ATMs and for other banking services are often higher than in communities served by credit unions. Credit unions spend a lot of time and money trying to fend off bank-sponsored lobbying efforts aimed at harming credit unions.

    http://www.dailykos.com/story/2011/05/18/976584/-Wisconsins-Credit-Unions-Under-Attack,-but-From-Who

  5. Bryan says:

    I’m curious why you chose Gateway Metro. I am seriously considering moving my money to a credit union, inspired of the Occupy Wall Street protests, and I’d like to make an informed choice.

    Thanks,
    Bryan

    • Erich Vieth says:

      Bryan: Gateway has a branch near where I work. I went in and visited before I signed up and I was impressed that they would give me prompt no-nonsense sustained attention, which included a thorough explanations about how their system worked, including their online functions. From what I have learned talking to other folks, many other credit unions are also excellent. Good luck moving your money. I understand tomorrow has been designated a day for a coordinated effort for moving money out of big banks and putting it in local banks and credit unions.

  6. Erich Vieth says:

    Many businesses are moving their money out of the big banks. Here’s a good reason;

    According to MultiFunding research, in 2010, the top 25 banks controlled about 61 percent of all deposits, but made only 20.3 percent of all SBA 7(a) loans. Smaller banks held about 39 percent of all deposits but made 79.4 percent of all SBA 7(a) loans. Kassar points out that Citibank in particular had about $800 billion in deposits in 2010 and loaned $62 million through the SBA loan program. “So they used .0078 percent of their deposits to make SBA loans,” Kassar says. “The average for all banks in the country is .187 percent of deposits going toward small business loans, which is still a paltry number, but with Citibank, woo! It’s one of the lowest on the charts.”

    http://www.huffingtonpost.com/2011/11/04/small-businesses-switching-from-big-banks-to-local-banks_n_1070547.html

  7. Niklaus Pfirsg says:

    Erich.
    The attempts to change the rules governing credit unions are eerily reminiscent the changes changes leading to the destruction of the S&L industry in the 1980′s.

  8. Erich Vieth says:

    Amy Goodman offers this update on Moving Your Money away from big Wall Street Banks. http://www.truthdig.com/report/item/pulling_accounts_from_the_unaccountable_20111122/

Leave a Reply


Notify me of followup comments via e-mail. You can also subscribe without commenting.