Social Media is being credited with a protest action that began on Saturday that saw people withdrawing all their funds from banks and then closing their accounts. They have taken the money and instead of using a bank, they have placed the money in credit unions. This new protest action came about due to heavy anti-corporate sentiment that is prevalent among the population with the spread of the Occupy Movements and the general disgruntled feeling people have over the collapse of the global economic system in 2008.
Smaller banks (the credit unions) all across the United States have recorded an increase in business as a result of the protest action. The corporate owned behemoths like Bank of America are being exchanged for smaller local not-for-profit credit union branches. These actions of moving the funds to much smaller businesses is being called ‘Bank Transfer Day’.
These transfers are having an effect in real terms. According to one report:
“At least 650,000 customers have opened accounts at not-for-profit credit unions in the U.S., taking away an estimated $4.5 billion over the past four weeks from big banks.”
Much of this came around because Bank of America announced a new $5 fee for using a debit card. Customers reacted with outrage, and justifiably so. Once a good deal of customers switched banks they made a public statement acknowledging people’s anger. They since then have said that they have “listened” and no longer plant to raise the debit usage fee to $5 for 2012. Several other banks came to the same conclusion and have decided to cancel their fee increases as well. However the damage has been done and many have refused to return their banks.
Canada’s credit unions are hoping to cash in on this movement as well with Meridian credit union CEO Sean Jackson making this statement in a news release:
“With Bank Transfer Day quickly approaching, I urge Ontarians to take this opportunity to experience first-hand the benefits of credit union membership.”
– Meridian CEO Sean Jackson said in a news release.
Despite the public enthusiasm towards the possibility of lower banking fees, I feel its important to tell you what the leaders of this ‘Bank Transfer Day’ protest are not telling you. In Canada credit unions operate very differently than they do in the United States. Here credit unions are corporations and abide by the same corporate laws. They actually have less regulation under the Bank Act and the Bills of Exchange Act. Unlike their American counterparts, credit unions are not not-for-profit institutions, they are profit generating enterprises. It is just mandatory that all customers have at least one share in the union. Although the dividends that customers are supposed to receive are so small, they almost never see any money.
For the US this protest could not come at a worse time. With record unemployment, a failing economy and a great deal of social anger directed towards corporations. Big money has enough problems as it is, and this is certainly not helping them one bit.