Attempts to send messages to large corporate banks have seemingly paid off, as local credit unions and community banks have enjoyed an influx of new members and customers in recent weeks.
Bank Transfer Day, a Facebook movement against unethical business practices by for-profit banks, was held on Nov. 5, though the Occupy Wall Street movement has been denouncing corporate greed and economic disparity since September. The demonstrations have put non-profit credit unions in the spotlight.
Financial institutions such as the First Entertainment Credit Union have been thoroughly enjoying the extra attention. Although just five of the credit union’s 10 nearby locations were open Saturday, First Entertainment saw its average new membership count quadruple, vice president of marketing Roy MacKinnon said.
“We certainly saw people making the move,” MacKinnon said.
He said the 10 locations as a whole have seen a 40 percent uptick in new membership when compared on a month-by-month basis. At the Wilshire location across from LACMA, bank staff members saw a “massive crowd” on Nov. 5, branch manager Sarah Strozenberg said.
“I’ve never seen anything like this,” she said.
MacKinnon said that through conversations with representatives of other credit unions, it appears that they are also seeing similar increases.
“It’s wonderful,” he said. “It’s great to get the word out to consumers that they do have options.”
MacKinnon said credit unions nationwide hold approximately 8 percent of total insured deposits. For-profit banks hold about $10 trillion annually, whereas credit unions hold $800 billion, he said. The corporate banks can use those deposits to fund major real estate developments, but First Entertainment focuses only on its members, MacKinnon said.
“We’re not about building the next new airport or The Grove,” he added.
However, how much growth the credit unions will experience as a result of the additional interest has yet to be seen. While First Entertainment has experienced some immediate growth, MacKinnon said any continued opportunities will depend on the amount of services the new members use. Further activity will allow First Entertainment to offer more services and improve those services, he said.
Though credit unions have been widely publicized as a savior for those looking to change banks, community banks are benefitting as well. Doug Spencer, president and chief executive officer of Gilmore Bank, said his company has had a 20 percent increase in new account activity recently.
“We have a number of new customers that have migrated over,” Spencer said, adding that Bank of America’s newly-increased-then-decreased debit card fees played a role. “It’s a welcome change.”
He said the bank has been in business since 1955, and prides itself on serving the community. Smaller banks that understand their niche can offer a more personal touch, Spencer said.
“That’s our bread and butter,” Spencer said. “That’s why [community banks] continue to sprout up. That’s why they’re essential to the neighborhood.”
First Entertainment member Ernie Benson agrees. He said personal customer service has kept him doing business with the credit union for at least 30 years.
“They sit down personally and deal with you,” Benson said.
Bank Transfer Day was created by California resident Kristen Christian after she told 500 of her Facebook friends about her plans to change banks. The event now has more than 80,000 followers, according to a statement. Bank Transfer Day is not part of or inspired by Occupy Wall Street, though Christian has acknowledged the movement’s enthusiasm.
According to a Credit Union National Association statement, credit unions brought in approximately 40,000 new members on Bank Transfer Day and added $80 million in new savings account funds. In the last 30 days, nearly 700,000 new members have joined credit unions, according to the statement.
In an e-mail, Christian said she has not yet planned an additional Bank Transfer Day, but she hopes that the event will continue to resonate with residents.
“As far as the long-term effects of the official Bank Transfer Day movement, I believe this is only the beginning,” she said. “I believe we’re on the cusp of tremendous time in which we’ll see Americans supporting local businesses, farmer’s markets and one another. I’m grateful that I’m alive to see this transformation come to fruition.”