HARRISBURG, Penn.-It's been 30 days since credit unions benefited from the biggest-ever increase in membership and awareness in history, culminating in Bank Transfer Day on Nov. 5.
But Credit Union Journal has found that that rising tide is not raising all ships evenly, with some CUs reporting big membership gains, other saying increases have been moderate, and at least one calling all the hoopla a bust.
Figures previously released by CUNA showed an estimated 650,000 people joined credit unions from the end of September through early November, and that on Nov. 5 alone more than $90-million in new loans were underwritten.
Much of that was the low-hanging fruit of opportunity, and credit unions are now sorting through where the additional opportunities may lie and which strategies work best at getting members "onboard."
At the $3.8-billion Pennsylvania State Employees CU, which has seen a strong 34% increase in new member accounts over the same period in 2010, CEO Greg Smith nevertheless acknowledge it's difficult to "get a read" on whether the members joined as a result of Bank Transfer Day efforts.
"My take on the Bank Transfer Day is that it raised awareness in the minds of consumers that they have options," said Smith. "Credit unions have been highlighted by the financial press as a great alternative to the big banks and their stifling fees. At PSECU we deliberately used the increased awareness to further differentiate ourselves."
In October PSECU increased call center hours to 9 p.m. each weeknight and increased its ATM surcharge rebate to $20 per month for members with direct deposit (Credit Union Journal, Aug. 22). "My niece from San Diego travels a lot in her job and uses Bank of America for her checking account," Smith noted. "She mentioned they had 18,000 ATMs nationwide that she could use for free. I explained that our $20-per-month surcharge rebate gave her free access to about 450,000 ATMs nationwide. She called to open her PSECU checking account the next week."
Moving To Capitalize
Disgruntled bank customers are still finding their way into Partner Credit Union in Arvada, Colo., and although it's "tapered off, we're still seeing members come over from the bigger banks," said Leslie Spence, director of member services at PCU. "I believe Bank Transfer Day has had a huge part in it, but I think it's also probably tied to a lot of the negative bank information that's out there anyway."
Partner Credit Union saw about 50 new members join as a result of Bank Transfer Day, with branch managers reporting "they're still feeling a trickle effect." Another 25 new members have joined since Nov. 5, with most new members bringing over their entire account relationship, including direct deposit and checking.
Partner CU staff is now working on another new member push for early 2012, this time tied around getting family and friends of existing members to make the switch.
"We're going to target the 18-24-year-old range and educate them through their parents that are members," said Spence.
Still Stressing Message
At First Capital FCU in York, Penn., VP of Member Relations Bill Pacacha agreed that things have slowed. "I can't say that it was great to begin with, but whatever volume we had did seem to taper off." First Capital tracked new memberships between Nov. 5-12 and opened up 14 new memberships with $37,000 in deposits. Those members also applied for loans or brought over existing loans for a total of $120,000.
Still, said Pacacha, "The mood has softened." He noted that unless a bank denies a consumer a loan or that the consumer has specific issues with the bank, "people have a tendency just to stay the course a lot of times."
First Capital is planning to make some changes to its free checking offering by the end of Q1 2012, including paying 10 cents per signature-based debit card transaction per month after the first 10.
An Onboarding Push
At $2.9-billion Mountain America CU, West Jordan, Utah, Jason Rogers, senior vice president of branch administration, said it has had in place an onboarding push to reach out to all of the new accounts idded during 2011.
"With those that came to us in the month of November, we did an extra effort to make sure they understood what options they have and if there were any products and services they needed," he said. "Many of those that moved over on Bank Transfer Day did not come just for a checking account; they came for a whole relationship, including auto loans, mortgage and credit cards. We have seen a big increase in all of those products."
To increase product penetration Mountain America instituted a "big sales push organization wide," Rogers said. All branches and several departments have been proactively calling members to talk about products. Rogers said the results been "very good" so far, as the CU has added approximately 4,800 products in the last two weeks.
"This includes mobile banking, auto loans, home loans, you name it. We didn't reach out with one product, we reached out with the whole relationship."
MACU continues to see people coming in, especially in the areas served by large national banks. Rogers said he has been in Arizona for several days-a state that traditionally has been a big market for BofA-and is encouraged by what he has seen.
"We won't have the numbers for a couple of days, but I am hearing from our branch managers that we are getting a lot of new members and they are coming from BofA and other large institutions," he said. "The national media exposure that came from Bank Transfer Day has been really nice. It raised consumer awareness that they have other options. People that didn't know now realize they can join a credit union, and once they get in the door they realize we have good products and good rates."
Some Lift, But...
In Lake Jackson, Texas, hunting season may be one reason Bank Transfer Day and the hoopla around it have done little to bring over new members to TDECU, kidded EVP/COO Stephanie Sherrodd. "Hunting season opened on Nov. 5 and traffic was slow for us. We experienced some lift from Bank Transfer Day, but not much. I think that is because BofA is not present in our market."
The $1.4-billion TDECU has been giving away $1,000 a day to attract consumers to its free checking account, sending checking growth to 30% year over year.
Day Was Overrated
In Charleston, W.V., meanwhile, the $140-million Pioneer West Virginia FCU is not budging off its position that Bank Transfer Day was a bust.
"It was on Nov. 5 and it continues to be," said SVP/CFO Dan McGowan. "We continue to see steady checking growth, but really none of it I can attribute to Bank Transfer Day or consumers being fed up with their banks."
PWV is paying members five cents every time they swipe their debit card in a move to bring over checking business and increase debit card transactions.
McGowan surmised that the lackluster response in his city and similar markets is the result of the lack of a presence by big banks in smaller towns.
