When Bank of America announced that it will start imposing a $5 monthly fee for debit card use on a big chunk of its customers, we heard the comments—from consumers, the press, and even the president of the United States.
We also heard this refrain from some credit union advocates: This is the time for credit unions.
What they mean is, quite simply, developments such as this can help greatly to differentiate credit unions from all the rest of the financial institutions.
The bank’s new fee may simply come down to a business decision aimed at countering the loss of interchange revenue forced by a new law and its rules.
“Don’t the banks have a right to charge for the convenience they provide to customers who don’t want the burden of carrying around cash or a checkbook?” asks The Wash-ington Post’s Michelle Singletary.
Others have pointed out that the megabank is simply attempting to keep the money flowing in. Bank of America isn’t saying it will lose money by collecting less in interchange fees, writes David Lazurus of the Los Angeles Times.
“What it’s actually saying is that it will make less money” by being forced to charge a lower rate as a result of the law and rules, he points out.
But, regardless of where you come down on the wisdom of Bank of America’s decision, the fact is—perhaps intuitively—consumers looked to credit unions in response to the new fee.
It’s as if they understood: A credit union will give you a better deal.
And we have some data to back that up: Traffic on our consumer website, aSmarterChoice.org, “has jumped eightfold since news of Bank of America’s fee,” reports Ylan Mui of The Washington Post.
That translates into 24,000 visitors during the four-day period after the bank announced its new fee. Most of those visitors were searching for a credit union to join.
(Note: aSmarterChoice.org helps consumers find a credit union to join. It features the only online credit union locater that includes all U.S. credit unions. And it tells the credit union story in simple, consumer-friendly terms.)
As I told Mui in her story, “our point is, if you’re upset, you should do something about it.” Joining a credit union seems like a good way to vent, and save money.
There’s a caveat in some of this as well: Mui also notes that credit unions and small “community” banks must walk a fine line.
She says that smaller institutions, like credit unions, opposed the new interchange law and rules even though they’re technically exempt.
Our concern remains that the market might eventually force smaller institutions to accept lower debit card revenue anyway, pressuring them to impose bank-like fees.
But, as I travel around the country, I hear credit unions say they hope—and intend—to stand fast. Absolutely, they say, resisting the temptation to impose such fees gives credit unions a solid marketing advantage over the big banks. They also point out it’s their duty as cooperatives to place member service ahead of profits, and hold the line on fees.
But, more and more, I’m also hearing: This is the time for credit unions. This is where we show how we are, in fact, different from the other guys.
Last month, credit unions were basking in some favored media and consumer attention, as voices rose urging bank customers to find and join a credit union—because they would get a better deal, and a better shake.
Our challenge now is to make good on that expectation—for consumers and for our movement.
BILL CHENEY is CUNA's president/CEO.