After many credit unions encountered a near-record breaking fourth quarter, some reports are nagging the question, “Will the good times continue to roll for credit unions once the media attention has stopped?”

With initial Bank Transfer Day numbers dialed down from 650,000 new members between September 29 through November 4 (the day before Bank Transfer Day) to 214,000, bank pundits are trying to downplay the overall impact of the movement.

In fact, big banks have even tried to mold Bank Transfer Day into their own strategy, hinting that they wouldn’t stay up late at night crying if their low balance account holders went for a credit union.

At a recent Bank of America strategic planning conference, CEO Brian Moynihan announced that 2012 is all about focusing on the top 20% profitable customers and shedding the unprofitable ones.   

Does this mean that big banking giants, who have played the role of the wounded Goliath animal, will come back to gobble up only profitable consumers with a louder roar?  Or will the energy from Bank Transfer Day continue to prevail and drive a wide variety of consumers to a credit union?

Marvin Umholtz, a financial institution consultant in Olympia, WA says that although the movement for consumers break up with their bank has lingered well past Bank Transfer Day, he doesn’t believe the momentum will continue at the same pace going into the new year. "I personally don't see the high media-attention level and high volumes continuing."

Is the Movement Slowing?

As banks pooh poo the member surge experienced toward the end of 2011, credit unions stand strong but are realistic.

Todd Pietzsch, BECU ($9.6 billion, Seattle, WA) spokesperson said, "I think it's safe to say this certainly can't last forever." 

It takes a lot of pain before customers move accounts, plus many may be entangled in products like mortgages and credit cards. It’s easier to perform an electronic funds transfer from the customer’s checking account to pay the mortgage at the same financial institution, then have to re-establish a new payments coming from another financial institution.

Suzanne Dusch, VP/Marketing at CFE Federal Credit Union ($1.268 billion, Lake Mary, FL) agrees to some extent.  “I’ve read several articles about the temporary impact of Bank Transfer Day, and I agree that the fervor to leave big banks has abated to some degree.  But the bottom line is that people are talking about the credit union movement more than ever.  More credit unions are open to community membership than in the past, and I believe credit unions will continue to grow and thrive.”

Patrick La Pine, President/CEO, League of Southeastern Credit Unions says that he’s made some observations that point to the movement gaining more strength instead of quieting down. “You can’t deny that interest in credit unions is higher than it probably ever has been,” he says.  “Consumers are fed up with the fees. Even though most financial institutions rescinded the fees, we know that more are coming to cover their losses.”

La Pine wants Bank Transfer Day to serve as a reminder that, “Credit unions aren’t in business to make money for shareholders and more consumers are starting to understand this. CUNA, along with state leagues, is working to ensure credit unions understand every day is Bank Transfer Day. We are encouraging our credit unions to grab a hold of this opportunity. We are running our Cooperative Brand Campaign again in the spring and we have new credit unions that have already paid into the campaign that didn’t last year. Some state leagues have inquired about our campaign. I think credit unions are working to take advantage of this great opportunity.”

Membership Growth Remains Strong

Along with his views of how the credit union landscape has been forever changed, La Pine reports that credit unions in his district experienced record shattering growth. In a recent press release the League of Southeastern Credit Unions reports that Alabama and Florida credit unions added 48,000 members in third quarter, Alabama and Florida credit unions added $1.4 billion in assets in 2011 and that member business lending continues upward swing.

La Pine says that LSCU Cooperative brand campaign before Bank Transfer Day (the campaign the league plans to re-introduce this spring) was an enormous success.

“Credit unions in Alabama and Florida participated in the LSCU Cooperative Brand Campaign which ran in September. This campaign included TV, radio, billboard, online and a landing website, www.betternameforbanking.com. The website saw 65,000 views in five weeks. This is an amazing number.”

He said that the campaign hit at the exact right time for credit unions. “It set the stage for consumer’s backlash against bank fees and then Bank Transfer Day. The real buzz for Bank Transfer Day gained steam in the fourth quarter. I think consumers are just fed up with fees being levied against them.”

CFE Federal Credit Union, which contributed to overall Florida growth numbers reports a healthy lift in new accounts during the last half of 2011. Dusch says, “Early in December, I conducted an analysis of the growth we experienced between June 1 and November 30.  During that timeframe, we opened 5,437 new checking accounts --- that’s net, not gross. We offer an online account opening option, and account openings through that channel alone tripled during October and November.” 

She adds, “The other interesting finding was that our retention rates increased in September, October, and November, meaning we closed fewer checking accounts as a percent of accounts opened.  So, not only did we attract new checking accounts, we retained existing accounts as well.”

BECU reports that it experienced a record-breaking autumn adding 9,400 new members in September and 16,300 in October (piled on to the 8,800 in August)--three times the amount of new members than the same time period the previous year.  The membership train hasn’t stopped. BECU opened 5,000 new accounts from November 5 to November 15 compared to the 1,800 opened during the same time span the prior year.

Pietzsch says, “People are finally realizing there are other options out there, whether it's a credit union or a local community bank."

“We believe credit unions’ business model is the best for members,” La Pine adds. “More consumers are starting to understand the differences between credit unions and banks. Credit unions across Alabama and Florida said they had much more interest in them than ever before. One credit union said their switchboard was crazy during this time. Another said it signed up more members in October than it had the entire second half of 2010.”

Don’t let the momentum stop--find a credit union today!