Wall Street Protests Get Specific: Could ‘Bank Transfer Day’ Pit Americans Against Their Big Banks?
The growing anger directed at U.S. banks (especially the big ones that took federal bailout funds) over recent fee increases coalesced this weekend into a Facebook-driven campaign urging Americans to close their accounts at large banks and move their money to credit unions by Nov. 5.
Though not initiated by the Occupy Wall Street movement in New York and other cities around the country, the effort has been embraced by the protesters, and their “We are the 99%” mantra is all over the “Bank Transfer Day” Facebook page — making this the first specific action by a political movement that has been criticized as unfocused and incoherent.
Bank Transfer Day was started by a 27-year-old Los Angeles art-gallery owner, Kristen Christian. She says she’s not affiliated with the Occupy Wall Street protesters but that many organizers of those demonstrations had reached out to her to express support.
Christian chose Nov. 5 because of its association with 17th century British folk hero Guy Fawkes, who tried to blow up the House of Lords but was captured on that date in 1605. In an interview with the Village Voice, however, Christian and Occupy Wall Street leaders who discussed the effort to get Americans to move their money from large banks to small institutions emphasized that they weren’t trying to create a collapse of the financial system. ”I’ve been very careful to state that this is not … anarchy,” Christian told the Voice. “It’s shifting the money to a company people respect the practices of. It’s like, if you don’t like Walmart’s practices, shopping at a local grocery store instead.”
The real question, of course, is whether enough people will close their accounts to persuade the nation’s largest banks to roll back their fees in order to keep customers. There’s no denying the populist appeal the movement has garnered: as of Sunday afternoon, about 14,000 Facebook users had RSVP’d to the event, and numerous other pages had been set up in support of the concept. But while plenty of people may like the idea of switching banks to avoid extra fees, moving the foundation of their financial life takes not only dedication but also time (a few weeks at minimum) and a fair amount of tedious paperwork.
Even if enough people decide it’s worth the hassle to make a stand, withdrawing their deposits isn’t going to make an impact on the proprietary trading, consulting, securitization and other businesses that big banks have been pursuing over the past decade or so. As Yahoo! Finance writer Dan Gross pointed out in a recent column, it’s largely these risky endeavors that brought the “too big to fail” banks to the economic precipice three years ago. And it’s these kinds of businesses that increasingly pull in the big money — not plain-Jane deposits and lending.
So, will you be switching your banking to a credit union or smaller bank that hasn’t ratcheted up the amount it charges customers to use its money? Will you close your account on Nov. 5 as a symbolic move?
I ditched my big bank!
By Charles Riley
NEW YORK (CNNMoney) — They’re mad as hell, and they’re not gonna take it anymore.
Take what? Bank fees.
Recent fee hikes from some of the nation’s biggest banks have attracted the wrath of customers, some of whom are taking their business elsewhere.
Prime targets: Banks of America, which slapped a $5 monthly fee on debit cards, and Citigroup (C, Fortune 500), which will start charging $20 a month for some checking customers who don’t maintain a $15,000 balance on their combined accounts.
“I dropped Bank of America like a hot potato,” said Tim O’Brien a partner in a Seattle-based television advertising agency. “I felt like I was getting nickel and dimed.”
The best part? No fees on his new account.
“They rolled out the red carpet for us,” O’Brien said. “The difference really is amazing.”
There is no industrywide data on how many customers are leaving their banks because of new fees. And experts note that it takes a lot for most people to make a move. “It’s a big hassle to change banks,” said Bert Ely, a banking consultant.
Still, new fees are proving the final straw for some customers.
Ely said the new fees at Bank of America in particular seem to have hit a nerve, and that the bank is likely to lose customers as a result.
“People are always opening and closing accounts for a variety of reasons. You have kind of a normal churn,” Ely said. “The challenge is measuring the additional turnover due to a policy change.”
It’s a trend that has been going on for some time, as more and more free accounts disappear.
That really was the last straw,” Fisher said of the fee. “That’s when I lost it and decided to switch.”
Changing banks was going to mean a loss of convenience for Fisher. The local Chase branch was just a couple of blocks from his home. So where to go?
Fisher took his case to the Internet, tweeting about his dissatisfaction. To his surprise, he received two unsolicited offers — one from a credit union, and one from a smaller bank.
The message? We want your business. One even asked him to come in for a cup of coffee.
“I didn’t get the coffee, but I did go talk to both banks,” Fisher said. After evaluating his options, he moved his business account to OnPoint Credit Union in February.
“I really appreciate the way I was treated as a small business person,” Fisher said. “They treated me like I was one of the biggest businesses in the city coming in.”
Banks with lower fees seem to be in the best position to capitalize on the new charges.
Navy Federal, a credit union with about 3 million members, experienced a surge in new accounts after Bank of America (BAC, Fortune 500) announced its new fee. Instead of the usual 2,600, Navy Federal opened a record 3,200 new checking accounts in one weekend, according to spokeswoman Jennifer Sadler.
Why have banks been hiking fees in recent days?
Banks are dealing with a new cap on the fees they can charge retailers when customers swipe their debit cards.
While banks used to charge an average fee of 44 cents, now the maximum is 21 cents. They arelooking for a way to make up the difference. Smaller banks — those with less than $10 billion in assets — are exempt from the new regulation.
No matter the reason — there isn’t a lot of sympathy for banks.
George Lettis, a Citi customer in Maryland, was about to be hit by the bank’s new $20 fee — unless he raised his balance by a substantial amount.
“It just wasn’t financially possible to keep that balance in there,” Lettis said.
Now he’s moving his checking account to Pentagon Federal Credit Union.
“Unless you have a big balance, the big banks aren’t working for everyday people anymore,” Lettis said.
At a local level, banks appear resigned to losing a few customers.
“We went to our local branch in Seattle,” said O’Brien, the Bank of America customer. “The manager didn’t even try to keep our business.”
source: I ditched my big bad bank!
Occupy Wall Street Leads to a Planned Bank Boycott
By Jen Doll
In the wake of Bank of America’s announcement that they’ll be charging customers $5 a month to use their debit cards starting next year — and in the continuing efforts of Occupy Wall Street, now in its 21st day — protesters who say they are associated with the movement are organizing there’s an event encouraging people to take their money out of major banks and put it in credit unions instead, to send those big banks a message. Kristen Christian created the event’s Facebook page, calling it “Bank Transfer Day,” also known as Saturday, November 5. (Their logo, by Eddie Colla, is a Guy Fawkes mask, because “Guy Fawkes had the courage to take on a towering giant — just as we are,” she writes.) Update:Christian clarifies that this event was created by her alone, not by Occupy Wall Street, though she’s been in touch with many Occupy Wall Street protesters who support the cause, as she supports theirs.
In terms of instructions for the day, she writes:
• Open an account with a Credit Union • Transfer your funds to the new account (online or in person) by 11/05 • Follow your bank’s procedures to close your accountTo find a credit union near you: http://www.findacreditunion.com/
Together we can ensure that these banking institutions will ALWAYS remember the 5th of November!! If the 99% removes our funds from the major banking institutions on or by this date, we will send a clear message and give the 1% a taste of the fear that we experience every day when we aren’t able to pay for our rent, food, medication, utilities, student loans, etc.
As for the reason for the boycott, Christian cites the Durbin Amendement:
WHY ARE WE BOYCOTTING? The Durbin Amendment is an add-on to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law No. 111-203), signed into law by President Barack Obama on July 21, 2010. The Act allows the Federal Reserve to regulate debit card interchange fees of banks with over $10 billion in assets. Over the summer, the Fed released the final rule on the matter by limiting debit card interchange fees to a maximum of 21¢ per transaction. In response, these “major banks” have decided that beginning early 2012 any consumer with less than $20,000 in combined accounts will be charged a monthly $3-5 fee if they use their debit card at any point during the month. This is a blatant attack on the 99% that cannot & will not be tolerated. In a stand of solidarity, on November 5th we will transfer our money & close our accounts with these major banking institutions to take our business to credit unions (or local banks if a credit union isn’t available). Since #OccupyWallStreet began, these banks are donating our money (and money they’ve made with our money) to law enforcement agencies to heap abuse on our brothers & sisters. NO LONGER.FACTS/FIGURES:
• With the Durbin Amendment in affect, banks will still make 19¢ profit per processed transaction [*1]
• The average consumer uses his/her debit card 24 times per month [*2]
• Without the additional fee, Bank of America stands to turn a $3,228,480,000 annual profit from its 59 million customers’ debit card transactions [*3]
• Without the additional fee, Wells Fargo stands to turn a $2,626,560,000 annual profit from its 48 million customers’ debit card transactions [*4]
• Without the additional fee, JP Morgan (Chase) stands to turn a $4,924,800,000 annual profit from its 90 million customers’ debit card transactions [*5]
60,000 people have been invited, and nearly 8,000 are marked as attending on Facebook. Will they actually go to the trouble of dealing with those annoying corporate banks and their “procedures” enough to transfer their money for the cause? We will find out.
We’ve gotten in touch with Occupy Wall Street to find out what the official word from the movement is on this new movement. Recently a user submitted this idea on their site:
Everyone who has a BofA account should pull it out this week and open in a different bank. That’s a simple way to to boycott and will make an incredible impact on wall street in just a matter of days.
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