Updated 11/08/2011 04:18 PM
Credit Unions cash in on consumer frustrations over traditional banks
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RALEIGH -- Anger over new fees from big banks prompted more than 26,000 North Carolinians to move their money. Social media helped launch Bank Transfer Day, which encouraged consumers to switch from traditional banks to not-for-profit credit unions by Nov. 5.
Bank of America scrapped its $5 debit card fee last week, due to customer outrage. Wells Fargo pulled the plug on a planned $3 fee of its own. But some of the damage was already done.
"Probably the frustration level with fees just got to the point where they decided it's time to move,” said North Carolina Credit Union League President and CEO John Radebaugh.
"We typically open about 800 accounts in a month,” said Joseph Mecca of Coastal Federal Credit Union. “In October, we opened 1,800."
Coastal and dozens more credit unions across North Carolina cashed in on fed up consumers by opening 26,000 new accounts.
They say they're not focused on Wall Street reviews.
"We are cooperatives,” Mecca said. “We are member owned. So, we're not out to make huge profits on the business that we're doing. Our mission is to return those profits to our membership."
The number of accounts at credit unions compared to bigger banks is still relatively small, only about six to 10 percent nationwide. But some see that changing.
"We have about 12 percent of the deposits in this state,” Radebaugh said. “And we hope that will continue to grow as people realize that credit unions are a great alternative."
And yes, they have fees of their own, but officials say they work to keep them lower and in clear view.
"Actually, if someone wanted to go to our website today and look at our fee schedule, there's another column on that chart that shows them how to avoid that fee,” said Mecca.
There are 95 credit unions across North Carolina. The State Employees Credit Union is the second largest in the world.