More consumers flocked to credit unions last month than in all of 2010 combined, likely in part due to the controversy surrounding debit card fees.
At least 650,000 customers opened new accounts at credit unions since September 29, the day Bank of America announced it would charge customers a $5 per month fee to use their debit card for purchases starting in 2012, the Credit Union National Association estimates. If that number holds true, it would be more than the 600,000 consumers that joined credit unions in all of 2010.
More than 80 percent of the credit unions that experienced a boost last month attributed the growth to fees like Bank of America's or a mix of reactions to fees and "Bank Transfer Day" -- a social media-centered movement encouraging consumers to transfer their money from banks to credit unions or other non-traditional lenders, according to CUNA.
The banks are likely feeling the customer anger. A Bank of America official said the bank decided to scrap the debit card fee earlier this week as other banks also dropped their fees in response to the outcry, according to Reuters.
SunTrust Banks and Regions Financial said they were canceling their debit card fees hours before Bank of America made its announcement, according to the Wall Street Journal. Wells Fargo and JPMorgan Chase also halted their fee pilot programs. One-third of consumers said they would leave their bank if it put debit card fees in place, according to a survey released last month from Research Intelligence Group.
Credit unions across the country are benefiting from customers' decisions to make the switch. The 20 biggest credit unions in Massachusetts reported a 50 percent boost in account openings in the past six weeks, compared to the same period last year, according to the Worcester Telegram. Some Minneapolis, Minnesota-area credit unions have seen their new account volumes more than double during the first three weeks of October, the Minneapolis Star-Tribune reports.
Some credit unions are encouraging consumers to make the switch by extending hours and staffing for Saturday's Bank Transfer Day as well as providing current customers with "switch kits" that they can give to friends and family, according to CUNA.
"They are doing whatever their resources will allow them to do to help serve this consumer surge in interest in credit unions," Bill Cheney, CUNA president and CEO said in a statement.