Initiated through a social media campaign, bank clients hope to persuade others to transfer their money by Nov. 5 to send a message to large financial institutions that no matter when bank fees were implemented or canceled, the principal is not fair.
Bank of America and other large banks may have decided to end their debit card fees, but nationwide, many Americans are saying that their actions were too little, too late.
In a campaign being spread via Facebook, thousands have gathered to take part in Bank Transfer Day, an initiative calling for consumers to switch from commercial banks to local banks or not-for-profit credit unions by Nov. 5.
The initiative was originally planned by 27-year-old Kristen Christian, a Los Angeles art gallery owner who was frustrated with Bank of America when it announced — but subsequently revoked— plans to charge a $5 monthly fee for debit cards. More than 74,000 Facebook users have said they plan to participate.
Due to heavy criticism, the debit card fees at most banks are no longer in place, but many believe that the banks were still in the wrong to charge vulnerable taxpayers who helped to bail them out. Additionally, many new fees, including a monthly fee for not having a set minimum balance in a checking account has been imposed.
“In light of the recent announcements that many corporate-level banks have rescinded the new debit card fee policies, Bank Transfer Day would like to remind supporters that this consumer action was inspired not from the fee itself, but the principle behind it,” the group’s Facebook page reads. “When a company chooses to target a section of the population it views as weak, it's our duty as citizens to stand up in solidarity.”
The activists argue that more community banks and credit unions offer ATM surcharge-free networks, charge on average less in fees and often pay you higher interest on your accounts than big banks.
The claim that the most important reason for consumers to move their money is to make their voices heard.
Bankrate.com offers this handy guide on credit unions:
What is a credit union?
They are financial institutions that offer savings accounts, checking accounts, ATM cards, loans of all types, credit cards and more. Credit unions have been in existence in the U.S. since 1935, and are regulated by the National Credit Union Administration, or NCUA, an agency of the federal government. Like banks, credit unions have insurance on deposits of up to $250,000.
But that is where the similarities between banks and credit unions end.
Unlike banks, credit unions are not beholden to outside stockholders or controlled by a paid board of directors. They are owned by members, operated by volunteer boards and are not-for-profit. The nonprofit status saves credit unions money; they are exempt from paying most state and federal taxes.
Because credit unions aren't looking to turn a profit, they can offer their members attractive rates on loans and better interest rates on savings and checking accounts than banks. Some even offer free checking.
Credit unions usually are not open to the public. They are usually affiliated with an employer, labor union, a residential community or other type of organization or association, although some have begun to open up to the public. Still, the Credit Union National Association, a trade group, states that almost everyone belongs to at least one of these groups and may be eligible to join a credit union.
To contact or share story ideas with Danielle Wright, follow and tweet her at @DaniWrightTV.