It will take more than a single day for credit unions to realize significant gains from disaffected bank customers.
That’s the word from credit unions in Orange County, which have drawn increased interest amid a rugged run of publicity for banks in recent weeks.
The topper came on Nov. 5, dubbed “Bank Transfer Day” by a loose-knit network of critics of big banks. Their calls for account holders to switch to smaller banks and credit unions got helped along when several big banks announced plans to institute fees for the use of debit cards—a move several have since decided against in the face of complaints from customers and bad press.
Spike
“We had a 90% increase over the same day a year ago,” said Rudy Hanley, chief executive of SchoolsFirst Federal Credit Union in Santa Ana, referring to Nov. 5. “But I expect it would be more of a long-term switchover.”
Santa Ana-based Orange County’s Credit Union—the fourth-largest credit union here—also noted a boost on Nov. 5.
“We saw a 245% increase in membership compared with other typical Saturdays,” Chief Executive Shruti Miyashiro said. “We had all hands on deck, and it was busy in a steady way.”
Miyashiro said new accounts and loans had been increasing well before November, with record levels of growth in October.
“Many people obviously did not wait for a specific day, but they took the time to make the change in a deliberate manner,” she said. “We are sure that consumers will continue to move accounts to credit unions long after Bank Transfer Day ended.”
Not all credit unions got a boost from Bank Transfer Day.
Comunidad Latina Federal Credit Union, also in Santa Ana, sprouted from SchoolsFirst five years ago, with the collective support of 17 credit unions providing seed capital. Bank Transfer Day came and went without much effect on Comunidad Latina.
“Our traffic was slower than most, because I don’t know how much of our customers are following the recent news,” said Chief Executive Terry Agius. “We all saw more activity the whole month of October. But as for a tidal wave on Saturday—not really. I think it’s going to be more gradual.”
Some credit unions are marketing with that in mind.
“A lot of credit unions have come out with new advertisements, restating that they offer free services,” said Henry Kertman, spokesman for the Ontario-based California Credit Union League, a trade association.
Miyashiro said Orange County’s Credit Union has been running ads in newspapers, using direct mail, and sponsoring community events.
“We had an event at the Angel Stadium in July,” she said.
Huntington Beach-based NuVision Federal Credit Union has rolled out a number of promotions for new members, according to spokesperson L.J. Tarman.
“We have different opportunities for members to take advantage of, like receiving up to $150 for opening a checking account and $25 for referring,” Tarman said.
Southland Savings Federal Credit Union in Buena Park, which handles accounts for employees of Sears stores in OC and all stores at the Buena Park Mall, has put up comparison charts in the break rooms of its affiliated stores, according to Chief Executive David Kantar.
“One problem credit unions always had is that nobody knows who we are,” Hanley of SchoolsFirst said. “We don’t have a lot of financial wherewithal to do a lot of marketing. I think this is a great opportunity to for us—and it’s not costing us a lot of marketing dollars. As people find out what we are and what we do, there tends to be a shift over to credit unions.”
“Watching Dollars”
Bob Arnould, senior vice president of government relations with the California Credit Union League, said changes in consumer behaviors are visible in the wake of the recent recession.
“People are watching their dollars more carefully than they did five years ago,” he said. “They’re measuring their choices much more carefully when they see an opportunity.”
Arnould said he expects a “growing trend toward bringing money home to local financial institutions.”
