You've heard of a run on the bank? Now there's a run from the banks, as angry depositors across Metro Detroit move their money out of big national financial institutions and into the area's nonprofit credit unions.
The bank swap is fueled by anger over new bank fees, notably the announcement by giant Bank of America that in January it would start charging $5 per month to most account holders using its debit cards. But fleeing bank customers also say they're fed up with the financial institutions that created the mortgage crisis and recession and which, since being bailed out by taxpayers, have jacked up credit card rates, cut credit limits, stymied home refinancing, slashed returns on deposits and inflated or invented customer fees and penalties.
Check these percentages on new customers at one Michigan credit union. Would love to see this backed up with a complete survey nationwide.
"I would say it's ranging from a 25 percent increase in new members to a 50 percent increase at one of our branches, all within the past several weeks," said Lisa Burroughs, chief operations officer of the nine-branch Michigan Schools and Government Credit Union. The credit union's membership grew by 4 percent last year, but had slowed to about 3.5 percent until a few weeks ago. Now, Burroughs says, she expects enrollment will be up 5 percent by the end of the year.
"Our best source of new business is our current members' word of mouth," Burroughs said, "but when the banks do things like they're doing now, that helps us as well."
The Saginaw News also reports that, along with credit unions, Michigan-based regional banks are seeing a lot of new customers as well.
Jeff Southcott, executive vice president of Midland-based Wolverine Bank, said his five-branch bank has had a steady stream of new customers in the weeks following the Bank of America announcement, and even though it’s hard to say if the new accounts are directly related, Wolverine is working to capitalize on the situation.
People don't move their money on a whim. Maybe we have reached a tipping point.
Important update: Michigan banks and credit unions lead the nation when it comes to SBA- backed business loans.
When it comes to small-business lending, Michigan has something to brag about.
New data from the U.S. Small Business Administration show that the state's banks and credit unions wrote more 7(a) loans -- the most popular SBA-backed loan -- than any other state or metro area in the country in the fiscal year that ended Sept. 30. Los Angeles took second place.
The $689 million in loans went to businesses in a variety of industries in 79 out of Michigan's 83 counties. The loans created or retained an untold number of jobs. The surge in lending activity is part of a nationwide trend. Total SBA lending reached a record level in fiscal 2011, with nearly 54,000 7 (a) loans worth $20 billion.
As big banks tightened lending to small business, the regionals and the credit unions (with a big assist from the government) were the ones to stand up and keep the wheels of commerce turning. Yet another reason to consider taking your business to them...
Even more: Bank of America drops the debit card fee, and Chase is backing off from charging a $15 monthly fee for checking. Too little, too late?