The Huffington Post's viral campaign urging people to move deposits from large banks to community banks has generated considerable buzz since it was launched in late December. But will it succeed in helping small banks generate more deposits?
Opinion is decidedly mixed. In a BankThink poll posted on American Banker's Web site in January, 39 percent of readers said they believe anger with the megabanks runs so deep that many customers will jump ship, while 24 percent said the campaign would have minimal impact because inertia is a powerful force.
Still, as grassroots efforts go, the Huffington campaign has been a smash. Its Web site, MoveYourMoney.info, received millions of hits in just the first week and consumers flooded the site with comments professing love for their local bank or credit union. (Sorry, bankers.) The campaign kicked off Dec. 29 with a populist plea from Arianna Huffington and Rob Johnson asking consumers to move their money out of the nation's four largest banks (Bank of America, Citibank, Wells Fargo and JPMorgan Chase). Instead they urged using community banks that largely "avoided the banquet of greed and corruption that created the toxic economic swamp we are still fighting to get ourselves out of."
Camden Fine, the CEO at the Independent Community Bankers of America, says his membership is "going crazy" for the campaign, though even he isn't expecting a massive customer exodus from the big banks. "I think it will run its course and be another interesting episode among many during this financial crisis."
It's clear, too, from some responses to various polls and blog posts that small banks have hurdles to overcome. Twenty-nine percent of respondents to the BankThink poll say that customers value convenience first, which doesn't bode well for community banks with small ATM networks. On Gawker.com (which ran a story calling the Huffington Post campaign "lame") one reader says online banking "sucks" at community banks, while another suggested that consumers would be better off stuffing their money under a mattress before moving it to a bank "whose shares are trading for a dollar each and who gets a cease-and-desist order from the Feds."