We’re starting to get hard numbers from Bank Transfer Day. The Credit Union National Association, the leading trade group for credit unions, reports 40,000 new accounts on November 5. This is 24 times the normal rate of membership increases for the industry in 2010, and two times the rate of membership since September 29. That’s when credit unions began seeing a surge in the wake of the abandoned $5 debit card fee from Bank of America. In all, the new accounts totaled $80 million in funds. $90 million in loans were taken out at credit unions on Saturday as well. And that only counts credit unions and not community banks.
A side note of this is that Wal-Mart’s simple banking services have seen a lot of residual benefit from the controversy over debit card fees from the big banks. Wal-Mart MoneyCenters are kinder, gentler check-cashing stores, charging fees to cash checks. They also offer pre-paid debit cards. This bolsters my belief that the best marriage of convenience and respect would be to allow the postal service to engage in simple banking. As a not-for-profit, they would provide better deals for consumers, and they are conveniently located in the center of all major towns, perhaps the only entity in America with a more convenient set of locations than Wal-Mart.
Wal-Mart’s MoneyCenters are largely competitors to other check-cashing stores, however (and probably a better one for consumers). The competitors to the big banks are credit unions and community banks. And they are experiencing boom times, as the banks suffer from their overreach. The fact that Bank of America just announced a major settlement with 13 million borrowers for $410 million in illegal overdraft charges will only further that surge. The banks can boast that these customers flocking to credit unions and community banks are unprofitable, but I’m not sure there’s a precedent for a business bragging about having fewer customers.
Maybe those Wall Street bonuses will be even smaller this year. The sound you hear is one tear falling to the ground.
UPDATE: I should add that the Move Our Money campaign from the New Bottom Line has reported $50 million of transfers away from Wall Street banks and into community banks and credit unions in one week of existence. One Silicon Valley businessman alone, Mike Fox, Sr. divested $8-10 million from Bank of America by himself.