As credit unions across the country continue bask in the afterglow of Bank Transfer Day, new memberships and accounts continue to mount. A reported 40,000 former bank customers became members last week, generating $80 million in new deposits. Patrick Keefe, spokesman for the Credit Union National Association says that some of the new money may have been produced by existing members.
Needless to say, credit union staff members are thrilled, but still hold cautious optimism that the trend will continue.
Michael Terzian, VP/Marketing and Business Development at Partners Federal Credit Union ($1 billion, Anaheim, CA) explains. "Credit unions need to uphold the 'people helping people' standard and avoid jumping on the bank bashing bandwagon. The real message that we should be communicating is our enduring value and to avoid treating this like a one day event."
Terzian says that before, during and post-Bank Transfer Day he instructed credit union staff to never take a dig at the banks, no matter how many stories new members relayed. "When new members called we addressed the value they will receive at a credit union and stayed away from the negative press."
Both Carolyn Jordan, SVP Neighborhood Credit Union ($275 million, Dallas/Ft. Worth, TX) and Lisa Otomo, VP/Marketing at Western Federal Credit Union ($1.6 billion, Hawthorne, CA) said that they kept new member conversations focused on the positive aspects of Bank Transfer Day as well.
"We're moving in the right direction not only as an individual credit union but as an industry," Otomo says. "I'm happy with the uptick we're seeing and plan to keep the momentum going. We've been communicating that we not only currently have free services, but always have and always will."
"Members stated that the media attention and the prospect of new fees from their banks caused them to take a look a fresh look at credit unions," Jordan says. "In particular at Neighborhood Credit Union, they like our products, the local feel and the service as well as the bonus of free checking with benefits."
While credit unions were extremely appreciative of the massive media attention the day drew, many noticed that the hype kept some new members at home on Saturday.
"We had a moderate to busy day on Saturday but wondered if we could have seen more traffic," Terzian says.
He explains that a few members posted Facebook messages, warning members to steer clear of credit union branches on Saturday because of they were concerned they might encounter a mob scene.
"We definitely saw an increase on Saturday but all the news media scared off some people--who wants to stand in line for an hour on Saturday when you could visit the credit union the following week?"
However, Terzian said that having news media on-site resulted in new memberships--from reporters. "Some reporters and news crews closed their bank accounts and opened an account with Partners after covering the story and talking to our members. In fact one reporter, who banked at Wells Fargo said, 'your rates are double for deposits!' After he finished the story, he came back and opened an account."
In other cases, new members said that they came to a credit union as a direct result of what they read or saw on the news. Jordan says, "One new member saw us advertised on the local news (NBC 5) Friday and came in to open an account as a result of it on Saturday!"
Bottom line, credit union representatives couldn't be more tickled with Bank Transfer Day. Terzian says that branch traffic was up 10% to 20%. "We saw a 50% overall membership increase during the month of October."
He adds that its not only memberships that are growing--existing members may be closing multinational bank accounts and transferring money to credit unions. "We are featuring strong deposit rates right now so we told existing members that if they have deposits that are coming due to consider transferring money to the credit union," Terzian adds.
As a result Partners saw some decent deposit increases. "It was the quality of the deposits more than the quantity," he says. "In many cases we saw six figure deposit transfers...we did more communicating with the members than selling." Terzian says that total deposits are up 25%.
Jordan says that Neighborhood opened 41 accounts, originated seven vehicle loans and made two home equity referrals in five hours.
Otomo says that Western opened 30% more new memberships thanks to Bank Transfer Day. "This was a nice increase and one we can manage. We are looking forward to the future and need to keep the momentum going as an industry so that everyone will benefit."
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