A woman in Los Angeles started a movement encouraging people to transfer their money from big banks to credit unions, and now the movement is getting attention nationwide.
Local credit unions are gearing up for a possible rush of new customers thanks in part to one local woman's crusade against big banks' high fees.
Like many consumers, 27-year-old Los Angeles gallery owner Kristen Christian was shocked when her bank, Bank of America, announced it would charge customers new fees to use their debit card.
"The announcement of a $5 monthly fee for debit card use directed at customers with less than $20,000 in combined accounts didn't sit well with me," Christian said. "On principle, I couldn't support a company that would choose to target the impoverished and working class."
So she decided to do something about it and launched Bank Transfer Day, a Facebook and Twitter movement aimed at encouraging customers to close their accounts with large corporate banks and move their money to small community banks and credit unions on or before Nov. 5.
"Together we can ensure these banking institutions will always remember the 5th of November," Christian wrote on Facebook. "We will send a clear message that conscious consumers won't support companies with unethical business practices."
She shared her plan with 500 of her Facebook fans. But to her surprise, things exploded into a national movement. Five-hundred turned into 1,000. Then 10,000. Then 20,000.
"I expected that possibly 200 would respond," Christian said. "After the announcement, a friend and I engaged in a discussion on his Facebook wall. An acquaintance of his responded 'Who cares?' My heart leapt into my throat. I suppose that person now has her answer."
So far, more than 38,000 people have "liked" Bank Transfer Day's Facebook page, 75,000 have RSVP'd to the event and about 1,400 are following the movement's Twitter account.
And banks may be getting the message.
In response to public outrage and what many called "the final straw," Bank of America announced this week "we have listened to our customers very closely" and canceled plans to impose a $5 monthly debit card fee. Wells Fargo, the fourth largest U.S. bank, recently scrapped similar plans.
But the damage may already be done. Local credit unions have seen a spike in business by a rush of angry customers looking for better alternatives.
"Closed mine down...feels good to feel like I'm doing my part!" wrote one user on Bank Transfer's Facebook page.
Locally, Partners Federal Credit Union in Burbank said it has seen a 25 percent jump in new memberships and deposits. Others, such as Burbank City Federal Credit Union, said they have seen a dramatic increase in business.
"Throughout the year we have seen typically 90 to 100 members join every month," Burbank City Federal Credit Union CEO Darin Guggenheimer said. "For October alone we saw 176 members, so we saw a double of what we typically see."
A new Harris poll shows 87 percent of those asked are extremely or very likely to stay with credit unions compared to 40 percent for Bank of America, 46 percent for JP Morgan Chase and 54 percent for Wells Fargo/Wachovia.
"The members are the depositors and they own the credit union. They have a vested interest in the say-so of this organization," Guggenheimer said.
Christian noted the Bank Transfer Day movement was not affiliated with Occupy Wall Street or other groups but "acknowledges the enthusiasm" behind them. The ultimate goal of Bank Transfer Day, she said, remains to shift as much funding to the local level as possible.
"Credit unions are not-for-profit financial cooperatives owned by their members and governed by a volunteer board of directors elected by, and from among, those members," Christian said. "Credit unions utilize profits for loans to individuals and small businesses which will promote growth within our own local economies."
Bank Transfer Day's Facebook page includes links to help consumers find credit unions and gives tips on how to successfully move an account to avoid any problems.