Credit Unions vs. Banks: Dueling Headlines Part IV

Bank Customer Switching Rates Rise Again, Fueled by Issues with Fees and Poor Service

“Outrage Against Banking Industry Fails to Drive Credit Union Membership”

Medill Reports in Chicago, written and produced by graduate journalism students at Northwestern University’s Medill School, recently published an article that suggested that the outrage against the banking industry that culminated in the establishment of Bank Transfer Day on November 5 did not have the effect many expected and did not spark significant growth in credit union membership.

“During all of 2011,” stated the article, “the National Credit Union Administration reported only a 1.5 percent increase in membership to 91.8 million total members from 90.5 million in 2010. That came despite the fact that 245 fewer credit unions were reporting. Credit union membership remained almost flat despite social media campaigns urging consumers to join their local financial cooperative.”

The article does admit that there are “some signs that the online movement succeeded” and provides figures showing year-over-year growth in membership, net profit, or both for four Chicago area credit unions. Interviews with bank customers and credit union members show that customer service and lower fees are key variables in considering a change in institutions but, for many, the promise of improved customer service and lower fees is not enough to abandon their current financial institution. Online banking, availability of ATMs and other conveniences and benefits of scale provided by larger banks continue to hold a grip on customers who, while questioning the ethics of the banking industry, find a switch “just not worth the hassle.”

While the study mixes local and national data, the results are do seem to resonate with an overriding national-level sentiment… is it really worth it to switch? In our final article in this series, you’ll see how the National Credit Union Administration comes back with research results and a headline that brings some finality to the topic.