Following Bank Fee Announcement, Local Credit Unions Notice Spike in Interest

Thanks to family vacations and warm weather, August is traditionally a slow month for Heartland Credit Union, according to Alyssa Karl, Heartland's director of marketing.

But that wasn't the case this year, Karl said. Although it was business as usual on Bank Transfer Day—a Facebook-led protest against large financial institutions that took place on Saturday, Nov. 5—the credit union has seen an unusually high number of new members and activity this fall.

Karl attributes the wave of activity to the announcement that Bank of America and other large banking institutions were instituting fees for debit card use. Bank of America's fee announcement wasn't made until Sept. 29—and was later rescinded, but Karl believes the anti-bank sentiment began broiling in August, when rumors of the proposed fees were made public.

That month, Karl said, 74 new members joined the Inver Grove Heights-based credit union, compared to 54 during the same month last year. The rate of new members dipped to normal levels in September, Karl said, but leapt back up in October as the Occupy Wall Street protests gained momentum.

Heartland isn't the only credit union across the country to reap the benefits of the debit card fee debacle this fall; an estimated 80 percent of credit unions saw membership increases in October, according to the Credit Union National Association. In the month leading up to Bank Transfer Day, roughly 650,000 new members joined credit unions and transfered an estimated $4.5 billion into savings accounts at those unions, CUNA said.

Big banks' decisions to institute a debit card fee was prompted by the passage of the Durbin amendment, which put a limit on the interchange fees banks charge merchants for debit card transactions. The legislation went into effect Oct. 1. 

In West St. Paul, Postal Credit Union has also seen heightened activity this fall.

In Oct. 2010, 217 people opened new checking accounts with the credit union, but in Oct. 2011, that number leapt upward to 305 new accounts. Last year, an average of 240 people opened accounts each month during August, September and October. This year, that average stands at 315 new accounts a month.

Much of that growth is due to the "frustration" that people are feeling toward large banking institutions, PCU spokesperson Alisha Johnson said. While PCU also charges fees—including a fee to members who don't regularly use their debit cards—those fees are often negotiable, Johnson said.

"They’ve made the conscious decision to move, and it’s not easy," said Johnson, who noted that transferring a checking account to another institution is often a long, difficult process.

"I think that really shows the customer sentiment; they've had it, they're really frustrated. It's more than unjust fees, it has to do with service. They want to be more than a number."