Bank Transfer Day is a national movement for irate consumers to move their money out of big banks and into credit unions or smaller community banks on or before Nov. 5. But will the potential mass transfer of accounts have any effect on the big, bad' banks?
The far-reaching implications of the federal banking overhaul, i.e. Dodd-Frank, have trickled down to consumers in the form of additional fees and prompted a grassroots movement to pull deposits out of big banks and transfer them to credit unions or smaller community banks.
According to a report from New Orleans' Gambit, Bank Transfer Day is being held on or before Nov. 5, a date for unsatisfied consumers to take action and move their money to a smaller or not-for-profit financial institution.
The Bank Transfer Day movement, Gambit reports, comes from Los Angeles art gallery owner Kristen Christian, who says in a statement that "I was tired tired of the fee increases, tired of not being able to access my money when I need to, tired of them using what little money I have to oppress my brothers and sisters."
The Transfer Day idea, Christian says, is separate and not affiliated with the Occupy protests taking place in almost every major city in America and across the globe, New Orleans included:
How does a credit union differ from a bank? Perhaps most significantly: a credit union is a not-for-profit organization. Rather than shareholders, credit unions are run by locally elected representatives, and each member has a share in voting. And though monies in a credit union account don't have the same FDIC protection that a bank account carries, they are federally insured by a different government agency, the National Credit Union Administration (NCUA). Otherwise, most credit unions offer many of the same services as a bank does, including credit cards, direct deposit, home and auto loans and CDs and IRAs.
Rusty Cloutier, president and CEO of Lafayette-based MidSouth Bank, says he's been talking about the "big, bad banks since before it was cool" and has even written a book on the topic.
Cloutier says MidSouth, though it has a presence in two states and is still growing, is a community bank at heart, which is why the big bank stigma has "continued to bring [MidSouth] business."
Because Lafayette's banking industry is for the most part rooted by community banks, Cloutier doesn't foresee significant participation in Bank Transfer Day on a local level.
Cloutier also points out that because credit unions retain non profit status, they don't pay taxes like businesses do, which could hurt local tax bases that support public services and schools if a major shift occurs.
"But that's a whole other topic for another day," Cloutier says with a laugh.
Debit card usage fees imposed by Bank of America and Regions, which has several branches in Lafayette and a heavy presence in New Orleans and Baton Rouge, have since been revoked in the wake of public ire. Regions, however, has implemented other account fees since Dodd-Frank has gone into effect.
Read more from Gambit here.