Local credit unions are reporting a flood of new members during October as the Occupy movement and recent Bank Transfer Day drive customers away from corporate institutions.
First Entertainment Credit Union, which has two branches in Burbank and seven others in Los Angeles, saw the number of new accounts increase 40% in October, spokesman Roy MacKinnon said.
The credit union typically signs up an average 550 members each month, he said. Last month, 1,042 members opened accounts.
On Nov. 5, Bank Transfer Day — an action promoted on social media to get people to withdraw from corporate banks — First Entertainment Credit Union opened 99 new accounts, MacKinnon said. Typically the nonprofit opens 16.
“It was a very marked difference,” he said.
It was a similar story at Glendale Area Schools Federal Credit Union, where chief executive Stuart Perlitsch said it had been “hellaciously busy.”
In October 2010, the credit union opened 78 new accounts, but that amount jumped to 118 last month.
One person brought in a $250,000-deposit the day before Bank Transfer Day, Perlitsch said.
With public dissatisfaction growing over corporate bank fees and account restrictions, credit union representatives say new customers are finding that the nonprofit, non-institutional model isn’t all that bad.
Credit unions offer most of the same amenities, such as online banking and bill paying, but usually do not charge for checking and don’t require minimum balances for checking accounts.
MacKinnon said that many of the new members had long-term relationships with their banks, but were turned off by the nickel-and-diming, such as the $5-debit card fee that Bank of America planned but eventually abandoned amid strong public outcry.
Perlitsch said his industry has also been working to debunk the misconception that credit union customers won’t be able to easily access ATMs within their network. Tens of thousands of credit unions are on a nationwide network where customers can get free access to their money by using another credit union on the same system, he said.
But Darin Guggenheimer — president and chief executive officer at Burbank City Federal Credit Union, which saw its monthly new customer average double in October to 180 — said switching financial institutions shouldn’t be a hasty decision.
Customers should carefully study a variety of financial institutions, he said, and choose the one that best fits their needs.
“I hope they do their research,” Guggenheimer said. “There are smaller community banks that might be good for them, too.”