Will Bank Transfer Day Really Change Anything?
Nearly 80,000 people are currently signed up on Facebook to attend Bank Transfer Day, Google returns over 400 news articles headlined “Bank Transfer Day,” and today in San Francisco, at least three spray-painted faces of BTD—the patriotic rendition of the V mask—smiled triumphantly at me on my way to work.
But will Bank Transfer Day accomplish what it seeks to do, which, according to the Facebook event, is to “send a clear message that conscious consumers won’t support companies with unethical business practices”?
How It May Win A Battle…
If awareness is the goal, then supporters of Bank Transfer Day can pop the champagne already.
Bank Transfer Day is an orchestrated call to action for consumers to switch from their for-profit bank to not-for-profit credit unions before November 5. With its media bullhorn and measurable results of credit union growth, Bank Transfer Day is arguably not just a one day event; it signals the start of an on-going movement from which we may see ripple effects in the coming year.
And so far, at least 650,000 consumers nationwide have joined credit unions and helped add $4.5 billion in new savings accounts, reports CUNA. With four in every five credit unions reporting noticeable member growth since the end of September, the waves of consumers moving their money out of big banks seems to be a combination of consumer reactions to the now-rescinded debit card fees as well as Bank Transfer Day. If you are thinking about making the switch to a credit union as well, be sure to research credit union reviews before moving your money.
With the sheer volume of media coverage and credit union mobilization, Bank Transfer Day is finally providing fed-up, frustrated consumers with what they need: a real course of action.
…But Not the War
However, Bank Transfer Day is not—at least not yet—a wrench in the big bank system. The BTD movement is disruptive in its theory, but not application.
How much do banks stand to lose if everyone moved their money out of banks? About $7.5 trillion, counting total deposits for all banks, savings and loans. However, that’s if everyone hopped the BTD bandwagon.
The 80,000 consumers who have pledged to move their money won’t break a sweat on banking executives’ brow quite yet. To put it in context, that’s less than 1 percent of Bank of America’s 57 million customer base. However, if all of those consumers encouraged four or five friends to join BTD and 400,000 consumers hopped the bandwagon, that’s the kind of hole in big banks’ pocket to garner attention.
Let’s look at the other side of the numbers. If the 80,000 signed up for Bank Transfer Day indeed move their money, they stand to save a combined $4.8 million a year as credit union members save on banking fees, states Bill Cheney, CEO of CUNA. If over 400,000 consumers made the switch, they’d stand to save about $29.8 million just by joining a credit union. When you look at what consumers could gain and not just what banks would lose, it becomes a positive movement with long-standing legs.
Once we start seeing consumers numbering in the hundreds of thousands and money moving in the billions, then Bank Transfer Day could leave its fingerprint on the American financial system.
In a year’s time, we may look back at Bank Transfer Day as a landmark event in the time of the Occupy Wall Street movement. Or maybe it’ll be remembered as a great idea with momentum that eventually lost steam as debit fees died, consumers quit complaining, and left their money in big banks. Until more fed-up and frustrated banking customers stop talking the talk and start walking the walk, change in the banking industry won’t reach a tipping point.
Movements like Occupy Wall Street and Bank Transfer Day are starting the conversation, but it needs to be continued with action from individual people, not just online interactions.
For more information on banking alternatives, check out the related post, How Consumers Should Beat New Banking Fees.
Justine Rivero is the Credit Advisor for CreditKarma.com, a free credit management website that helps nearly 3.5 million consumers access their truly free credit score.
Will Bank Transfer Day Really Change Anything? - Forbes