It’s Not Me, It’s You: Customers Leaving Big Banks for Credit Unions
With any type of relationship, breaking up is hard to do, but consumers have recently learned that when it comes to severing ties with your bank, it can also be costly and time-consuming.
From the recent backlash by customers to increased bank fees and charges, tough lending requirements and foreclosures, many are switching from the big-banks to community banks and credit unions. However, the banks aren’t making it easy by requiring customers to speak with personal bankers — see Wells Fargo & Co. (NYSE:WFC) — charging unexpected fees — see JP Morgan & Chase Co. (NYSE:JPM) and Bank of America (NYSE:BAC) — making it awkward.
The trend to move out of the banks also came in part from the grassroots movement, Bank Transfer Day on Nov. 5. The group’s organizers encouraged large bank customers to move from their financial institution and consider credit unions. Consumers didn’t need to wait until the designated day to make a move.
According to the industry trade group, The Credit Union National Association, an estimated 650,000 consumers joined credit unions from Sept. 29 through the first week of November.
The movement has continued with a Facebook page suggesting consumers keep moving their money out of the banks. Fans of the alternative credit unions and community banks have found lower fees and a greater connection to the local community than the large banks.
Another appeal of credit unions may be the fact they are not-for-profit financial cooperatives that are not allowed to either sell stock or take on debt.
Consumers may find these differences attractive but they may face a decline in customer service at credit unions after having the luxury of its many locations and the longer hours offered with big banks (NYSEARCA:KBE).