At least 650,000 people joined credit unions in the last month, and many more are likely to switch as Bank Transfer Day approaches, according to new studies released this week. That’s many times more than the 80,000 people who normally join credit unions every month, according to Lisa McCue, spokeswoman for the Credit Union National Association.
Many people who joined credit unions over the last few weeks did so to avoid rising bank fees, says Bill Cheney, president and CEO of the Credit Union National Association. Bank of America announced it would begin charging its customers $5 a month to make purchases with their debit cards; the fee attracted such widespread outrage that on Tuesday the bank announced it would drop the new fee.
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“The 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,” Cheney said of the association’s poll in a prepared statement.
The new accounts brought $4.5 billion in savings to the credit unions, according to the association’s estimates. More than 80 percent of credit unions reported increases in memberships over the last month, with the largest credit unions attracting the biggest share of new members.
And the switch to credit unions may not be over yet. A poll released Thursday by Harris Interactive finds that most bank customers actively dislike their own bank. And in terms of customer loyalty, big institutions like Bank of America and Wells Fargo fare the worst. Only 40 percent of Bank of America customers say they are extremely or very likely to continue banking with the company. JP Morgan Chase fares nearly as bad, with 46 percent saying they are likely to continue banking there.
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The numbers are abysmally low, even compared to other banks, 58 percent of whose customers said they were extremely or very likely to continue using their current institution.
The rate is far better at credit unions, where 87 percent of current customers say they are likely to keep their money at their present institution.
And forget loyalty; most big bank customers don’t even trust their own bank. Only a quarter of Bank of America’s customers agree that the bank is excellent or very good “at ensuring a trustworthy relationship” with them. Banks as a whole fared only marginally better, with 45 percent of current customers saying their institutions were trustworthy.
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Three-quarters of credit union customers said they had trusting relationships with their financial institution.
While such abysmal numbers might seem that big banks could be in big trouble when it comes to retaining customers, the Harris Interactive report points out that not every unsatisfied bank customer will actually go to the trouble of switching to a credit union.
“Let’s face it, there are barriers to switching. It’s a time-consuming and complex task,” according to the Harris report. Still, the huge number of customers reporting dissatisfaction with their bank “may indicate a groundswell of support for customers to stop being so historically passive when it comes to switching their primary bank.”
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