Credit unions see a spike in new members

15,000 Ohio signups in month coincide with banks’ fee boosts

Teller windows at a Great Lakes Federal Credit Union location.

GLFFCU.COM

Teller windows at a Great Lakes First Federal Credit Union location.

Credit unions in Ohio and Michigan experienced a banner month in October, thanks to the actions of a few national banks.

Membership and new deposits were up significantly in both states, and credit union officials say much of the new activity coming their way was from disgruntled bank customers angry at attempts to add fees to debit card usage.

On Oct. 2, Bank of America Corp., the second-biggest U.S. lender by deposits, announced plans to charge $5 a month for debit cards, and Wells Fargo and JPMorgan Chase announced they would test $3 monthly fees.

The latter two dropped their plans, and last week Bank of America canceled its $5 fee plans, but in the meantime many customers fed up with bank fees began a move to credit unions.

In Ohio, 15,000 new customers enrolled in credit unions, adding $106 million in deposits between Sept. 29 and Oct. 29, according to Patrick Harris, a spokesman for the Ohio Credit Union League.

“Usually we only get about 30,000 new members a year, so to have 15,000 join in a month is pretty remarkable. This recent jump has been attributed to all the coverage in the media due to bank debit fees,” he said.

The Michigan Credit Union League said its members gained 27,900 new customers during the Sept. 29-Oct. 29 period — about the same number who joined Michigan credit unions in all of 2010.

The Credit Union National Association said that nationwide a total of 650,000 customers, with deposits totaling $4.5 billion, joined credit unions in October.

“Definitely we have noticed some new activity. We had an increased volume of calls to our call center and our folks tell me a lot of those calls were how to go about joining the credit union and what our fees are,” said Barry Shaner, president and chief executive of Directions Credit Union in Sylvania Township.

New membership at Directions is up between 10 and 20 percent, said Mr. Shaner, who added that it’s difficult to tell how many are people fed up with bank fees and how many are just interested in joining the credit union.

“I can’t definitely say what those numbers are, but there is definitely something going on here,” he said.

At Glass City Federal Credit Union in Maumee, spokesman Sarah Ritenour said new accounts totaled 121 in October, up from 100 in September. And through Sunday the credit union has added 37 new accounts in November.

“We also noticed that it wasn’t just new members that we were receiving,” Ms. Ritenour said. “Our current members who have just savings accounts, came last month and opened checking accounts with us. So the number of checking accounts is rising.”

David Seeger, president and chief executive officer of Great Lakes Federal Credit Union, Sylvania, said his institution also experienced an increase in new accounts starting in October.

“We’ve seen some business trickle in and it was specifically for that — people saying we’re tired of the bank fees and we’re tired of this and we’re tired of that, so we’re bringing our money over to the credit union,” he said.

“It’s the greatest Christmas gift we could ever get. It’s pretty good marketing for us,” he added.

Mike Newman, chief executive at Monroe County Community Credit Union of Monroe, said his institution had more than 400 new customers in October, compared with 190 a year ago.

“And of those 400, roughly a good 150 accounts are directly related to the new debit card banking fees,” he said. “These new accounts are completely unsolicited on our part.”

Unlike Toledo area credit unions, the Monroe County credit union competes with Bank of America branches in the Monroe area.

“We’ve had people walking in off the street and asking what our members’ fees are compared to a bank’s fees,” Mr. Newman said.

Last Saturday was dubbed “Bank Transfer Day,” the creation of a California art gallery owner turned blogger who became dissatisfied with Bank of America’s since-rescinded debit fees and is urging consumers to leave banks for credit unions.

Mr. Harris, of the Ohio Credit Union League, said the action helped credit unions dispel some of the myths about credit unions, such as few locations and restrictions on who can join.

“A lot of people didn’t think they could join a credit union, but that’s just not the case anymore,” he said.

“Pretty much anybody in the state of Ohio can join a credit union now, and with shared branching, you can have access to your credit union through a network of 4,000 other credit unions, any of which you can walk in and pay your car loan or withdraw money from your account.”

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.