That's what countless media outlets reported, citing survey data from the Credit Union National Association. Hundreds of thousands of consumers have joined credit unions since late September, the numbers showed.
Surely credit unions gained at the expense of banks, but several skeptics — some with axes to grind, and others who are presumably more objective — say the numbers may have been inflated.
"For any number that you see from the credit union trade association, you have to look beyond the numbers," said Alan Theriault, the president of CU Financial Services, a consulting firm for credit unions. "I'm not saying the bank associations are any better, but clearly CUNA and others have skillful ways to spin stories to get the impact they want."
In a survey released on Nov. 3, CUNA said credit unions added 650,000 members and about $4.5 billion of savings deposits in the weeks following Bank of America Corp.'s Sept. 29 announcement of plans to charge $5 a month for debit cards. In a second survey released Nov. 8, CUNA found credit unions added 40,000 members and $80 million of savings deposits on Bank Transfer Day three days earlier.
Bank of America, JPMorgan Chase & Co., Wells Fargo & Co. and others have recently canceled plans for, or ended tests of, such fees.
Theriault and Keith Leggett, a senior economist at the American Bankers Association, questioned aspects of the survey interviews. Theriault wondered what the net gain was for credit unions during the period covered by the surveys, as there is a natural ebb and flow of people joining and leaving financial institutions. Reviewing quarterly data on membership would be a good indicator, he said.
There might be a bias in who responded to the survey, Leggett said.
"Maybe if you didn't have an increase, you didn't respond, so there was self selection," Leggett said. "Those that reported are the ones who saw an increase, and this was used to extrapolate. Based on that, that leads to an overestimation."
Leggett, who also runs the blog Credit Union Watch, argued that the publicity surrounding Bank Transfer Day accelerated the timeline for people who were already planning on joining credit unions. Long-term data will be more telling, he said.
It is unclear how many people opened credit union accounts without transferring their balances from their bank accounts. Weekly data from the Federal Reserve has not shown a deposit outflow from banks, he said.
"It basically indicates that we are not seeing deposits fleeing banks," Leggett said. "This doesn't refute what the credit unions are saying. This just means balances have not been transferred."
Mike Schenk, a vice president of economics and statistics at CUNA, acknowledged that many people may have joined credit unions without transferring all of their business. The survey did not ask for account size or average balance of accounts opened.
The rate of increase of savings deposits went from an annual rate of 4% before September to an annual rate of 6% during September. Schenk said this was a healthy increase but not huge given the high volume of new members. The estimated 650,000 that joined from Sept. 29 to Nov. 2 exceeded all new members in 2010, Schenk said. The overall increase in savings deposits in each survey was a fraction of 1%, Schenk said.
