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Credit unions reap reward of backlash against big banks

by Matthew Reichbach

Bank Transfer Day - Nov. 5

With media attention focused on the Occupy Movement and banks instituting new fees for using debit cards, consumer frustration is moving some to change from national banking institutions to local options.

The New Mexico Independent says that one option is credit unions.

In reality it’s a phenomenon that’s already in motion. Many credit unions around the country have seen an uptick in the opening of accounts. Laura Cowan, a spokesperson with the New Mexico Educators Federal Credit Union, whose membership already stands at 150,000, said that in recent weeks, “We have definitely seen a rise in the number of accounts being opened.”

The Bay Citizen noted a similar change in the San Francisco area.

The Credit Union Times wrote that, “Credit unions in Ohio, South Carolina and Pennsylvania also have said they’re working to take advantage of the new wave of anti-bank sentiment.”

In 2010, State Rep. Brian Egolf (D-Santa Fe) introduced a bill that would give local banks and credit unions preference over national banks. The bill cleared the state House on a unanimous vote but did not make it to the Senate floor for a vote before the session ended. The bill received national attention at the time.

It isn’t just the Occupy Movement that is driving consumers to take their money out of the country’s largest banks. Bank of America has announced a $5 fee per month for the use of debit cards while Wells Fargo is testing a $3 monthly fee in five states, including New Mexico.

It was these fees that prompted L.A. gallery owner Kristen Christian to propose “Bank Transfer Day.”

A Bank Transfer Day Facebook group urges the “99%” to remove their money “from major banking institutions” and put their money in “non-profit credit unions” on November 5.

Credit unions, unlike banking institutions, are non-profit. According to the Credit Union Association of New Mexico, a trade association for credit unions in the state, “Unlike most other financial institutions, credit unions do not issue stock or pay dividends to outside stockholders. Instead, earnings are returned to our members in the form of lower loan rates, higher interest on deposits, and lower fees.”

A Gallup poll conducted from October 15-16 found that “the current level of public support for Occupy Wall Street is similar to that for the Tea Party movement.” The poll notes that the Occupy Wall Street movement has been growing and has only been in existence for a month.

One thought on “Credit unions reap reward of backlash against big banks

  1. Joining a credit union is one of the best ways an American can do to save money and support their local community. I’m throwing my support behind Bank Transfer Day, and have even written a beginner’s guide to credit unions on my blog in support. I really hope Bank Transfer Day gains more traction.