Americans Closing Bank Accounts, Moving Money to Credit Unions

Facebook campaign urges people to shun banks and move money to not-for-profit co-operatives.


NEW YORK (Reuters) — Tens of thousands of Americans are closing bank accounts and moving their money to credit unions in a Facebook campaign that has gathered momentum from anti-Wall Street protests, an industry group says.

The month-long campaign started by Los Angeles gallery owner Kristen Christian, 27, will culminate on Saturday with Bank Transfer Day. Some credit unions say they are already seeing five times their normal daily new account business.

"I was tired ... of the fee increases, tired of not being able to access my money when I needed to, tired of my funds being used to fund lavish executive vacations and the acquisition of failing assets," Christian said. "I've been shocked at how many people have stood up alongside me."

Protesters claimed a victory on Tuesday when Bank of America Corp, the second-biggest U.S. bank, scrapped plans for a $5 monthly debit card fee.

But Christian said it was "too little, too late."

Credit unions are not-for-profit co-operatives. They often offer better interest rates and lower fees, according to the National Credit Union Administration (NCUA), an independent federal agency that regulates the sector.

[See a collection of political cartoons on Occupy Wall Street.]

Some 91 million people have U.S. credit unions accounts worth almost $1 trillion, NCUA said. About one million people a year open an account with a credit union, it said.

Bill Cheney, head of the Credit Union National Association, which represents America's 7,400 credit unions, said during the past month credit unions saw huge demand for new accounts, numbering at least in the "tens of thousands."

Some credit unions will have longer opening hours on Saturday to accommodate customers, he said, adding that people were not making the change quietly.

"With social media ... when people are making the switch they are talking about it," he said.

Retired Army Major Claudia Jefferson, 45, an avid Twitter user from Atlanta tweeted about her plans to close her account with Bank of America before Saturday.

"I stand with other Americans when I say, we have had enough," Jefferson told Reuters, calling higher bank fees an insult after the 2008 bank bailouts. "We are sick and tired."

Seattle resident Patricia Scott, 61, also made the switch and tweeted. Scott said her decision was driven by "the (home mortgage) foreclosure mess and the bank fees going up."

"On principle I just no longer wish to support this type of industry," Scott said in an interview.

[Check out a roundup of editorial cartoons on the economy.]

Bank Transfer Day follows Move Your Money, a project begun in 2009 by Arianna Huffington encouraging people to take money out of "too big to fail" banks which says more than four million accounts have moved from the big banks since it began.

Bank Transfer Day coincides with the Occupy Wall Street (OWS) movement, which began on Sept. 17 when protesters set up camp in a New York park, sparking demonstrations and so-called occupations globally. Christian says Bank Transfer Day was not inspired by OWS and does not endorse the protests.

OWS protesters are upset that banks received billions of dollars in bailouts in 2008 while average Americans are still suffering in a tough economy. The protesters also believe the richest 1 percent of Americans do not pay enough taxes.

A couple of dozen protesters were arrested for trespassing in New York last month at a Citibank during an OWS march. They said they were simply trying to close their accounts.

Citibank was not immediately available for comment on whether it might close branches normally open on Saturday. JPMorgan Chase and Bank of America declined comment.

A spokesman for Wells Fargo & Co said there no plans to close branches scheduled to open on Saturday.