Customers flock to credit unionsPublished 10:37pm Thursday, November 3, 2011
Local credit unions across the state are reporting surges of people opening new accounts to counter large banks forcing customers to foot higher fees for checking accounts and debit cards.
Cathy Merrill, CEO of Dowagiac Area Federal Credit Union, 473 E. Division St., saw a doubling of new members from September to October.
“We can always tell when something is going on in the banking industry,” Merrill said Wednesday. “We’re happy. In these times, people are looking for the best bank for their money, and credit unions offer good alternatives.”
Honor Credit Union, 56337 M-51 South, also notices an increase due to a combination of banking fees, mortgage issues and Dodd-Frank reforms.
The Michigan Credit Union League reports thousands of people pledged to move their money to a credit union on Saturday as part of “Bank Transfer Day.”
Several major national banks announced recently they would begin implementing fees for what had been free services, significantly increasing charges for basic checking accounts and debit cards and requiring customers to keep more money in their accounts.
Citibank announced that starting Dec. 9, it will double fees to $15 monthly for its mid-level checking account. It also increased fees for its basic checking account to $10 a month, while requiring a minimum $1,500 balance.
Bank of America announced it will charge a $5 monthly fee for using a debit card, starting in 2012.
Wells Fargo is charging customers in some parts of the country $3 to use a debit card. Chase is requiring a $1,500 minimum daily account balance, or it will charge customers $12 a month.
Other banks are also expected to implement similar charges for basic financial services, many of which remain free at credit unions.
“Credit unions know these are tough times for families and businesses in our communities, and we want them to know that every day is a great day to join a local, member-owned credit union,” said David Adams, CEO of the Michigan Credit Union League and Affiliates. “When banks charge high fees for checking accounts and debit cards, that hurts people who are already stretching every dollar. Because credit unions support local communities and provide more bang for the buck, people are taking the initiative to own their money and giving credit unions a closer look.”
According to Michigan’s credit union information portal, www.lovemycreditunion.org, online traffic in Michigan spiked in the one-month period ending Oct. 17, shortly after large national banks began imposing new and higher fees on basic services.
Surging online traffic
Traffic on the site increased 220 percent to more than 94,000 hits, compared to the May-June period.
In the September to October period, searches for “credit unions” and “credit union” that drove users to the site surged to nearly 24,000 hits. The “join a credit union” page saw nearly 4,500 hits, a seven-fold increase from 644 in May-June.
More than 90 percent of credit unions – not-for-profits owned by their members – offer free debit cards and free checking, compared with 45 percent of banks, www.bankrate.com reports.
Tags: credit unions