WASHINGTON-What started out as a New Year's resolution by a popular, liberal blogger has turned into a national phenomenon that is bringing deposits to credit unions.
Late last December, Ariana Huffington launched the "Move Your Money" campaign, a movement that urges American to move their checking and savings accounts to local financial institutions as a way to punish big banks for what Huffington alleges is irresponsible and anti-consumer behavior by the large money center banks.
Though the campaign, which lays out the argument for investing locally and provides a ZIP code look-up tool to point individuals towards financial institutions in their communities on its website, initially focused on just community banks, an outpouring of support by "HuffPo" readers and other bloggers quickly led to the inclusion of credit unions.
"Move Your Money" spread like wildfire, first predominantly to liberal blogs and programs, such as Daily Kos, Firedoglake, Dissent Voice, Democracy Now! and MSNBC's "The Ed Show." After the initial surge, however, the campaign went mainstream as it was picked up by news organizations like The Business Insider, The Los Angeles Times, Newsweek, and Reuters. It even earned a segment on the nightly news on both CBS and ABC.
All of those deposits and positive publicity have been embraced by credit unions, to a point.
'A Flood of Savings'
"Credit unions have seen a flood of savings pour in over the last six to 12 months; that puts a strain on net worth ratios," CUNA spokesperson Pat Keefe told Credit Union Journal, adding that the trade giant sees the movement as a net positive. "Frankly, however, this was going on even before 'Move Your Money' was articulated by HuffPo."
NAFCU recognized the movement's potential in its embryonic stage, as just over a week after Huffington's initial launch President Fred Becker posted an article on NAFCU's website called "Moving Your Money? Then Try a Credit Union."
The piece helped to triple the traffic at CULookup.com, a tool much like the one at Move Your Money's website, but focuses solely on CUs.
"Absolutely they should be taking advantage of it, but I understand the concern industry wide about share growth given that it drives down capital levels and capital is lower than it has been historically," Becker said, adding that seeing the campaign as a negative would be like rejecting programs such as America Saves, which encourages consumer savings. "Although it is entitled 'Move Your Money,' it is more about move your business."
Riding the Wave
Credit unions have ridden the waves of backlash against large banks, who many consumers blame for the financial crisis and recession. In its wake, consumer sentiment has clearly driven media coverage.
Both CBS television and an article by Kiplinger have featured CULookup, Becker pointed out, adding that movements like Move Your Money are essentially providing a free national branding campaign for credit unions.
Deposits have poured in to the industry and while some CUs are struggling to keep their net worth above water as the deluge of money comes in, a real opportunity is presenting itself with membership growth and attitudes towards cooperatives on the rise.
"Credit union membership expanded by more than 2% last year, we think. That's the biggest annual growth in 10 years." Keefe told the Journal. "Combine that with the many surveys and polls which shows consumer attitudes toward credit unions become more positive, supportive, and attitudes toward banks going the opposite way, and we think there is a trend toward greater consumer support for credit unions. Combine that with a grassroots campaign by a third party that originally started out for the banks and then by public demand included credit unions - we think that's pretty cool."
