By: Rob
This whole idea is picking up steam along with the Occupiers. The concept is that on November 5th, consumers can vote with their feet and express dissatisfaction with banks by moving their money to a credit union. To people stung by new fees, one would think such a proposal would have the chance to go viral. I don’t think it will because people really need to be mad to generate enough will power to overcome the inertia of changing their bank accounts. Ironically, the new fees are the result of The Dodd-Frank Act and the creation of the CFPB which was initially supposed to reform Wall Street but now sees itself as providing consumer protection. People are mad, but they aren’t that mad.
Let’s assume for the sake of argument that a good percentage of the population actually did get that mad and moved their money in one day. What would happen? It’s actually easy to predict: utter chaos. It turns out that having too much by way of assets is not a good thing for a credit union. The influx of cash to the credit union movement would immediately plunge the receiving credit unions into a state of ill-health.
Meantime, on the bank side, we have historical evidence of what happens when everyone takes their money out of the banks at once. It’s called a run. During the depression, many banks went out of business for that reason. The exposure would be so great that the Federal Reserve would act, most likely, to close down consumers’ access to banks and credit unions until the dust settled. You think people are mad now? Imagine hundreds of millions of people not being allowed access to their bank accounts for a week!
Now if such a shift occurred gradually, over time credit unions could manage the capital and banks would not have the immediate pain of a run. Certainly, many credit union advocates have sought this over the years. Timing is everything though and so is being careful what you wish for.
Edit: According to CU Times, the Bank Transfer person is not affiliated with the Occupiers.
What would happen if everyone moved their money from a bank on the same day?
A lot of people would be doing with a financial institution ill-suited to their needs. Fact of the matter is this: A credit union is simply not right for everyone.
In addition, a lot of people would have moved their money for the wrong reason, because many community banks — which many credit union folks fail to remember are banks — aren’t imposing or raising fees like some banks are.
There’s no doubt in my mind that credit unions are the superior choice for a LOT of consumers in the US who are banking with banks.
So here’s my message to CUs: Get out there, identify who these people are, and convince them why you’re superior. Stop mindlessly bashing banks, and stop relying on populist messages that never have a lifespan of more than a few months.
Well in addition to this MSNBC is telling consumers why to join a credit union! http://www.msnbc.msn.com/id/44819530 Check it out! When bank fees get ridiculous–i.e. charges for a consumer using his/her money, its time to take action!
Don’t you hate fads or trends ? Ok… Maybe not in the moment (especially if you haven’t identified your style and like to blend with those things which appear to be cool ). When can’t we all just agree we’re in the knowledge business? Individuals don’t want to seek it, companies do a poor job of conveying it, and power of money becomes more important. If credit unions, by and large, had their collective act in order, they would sit down with these individuals and guide them with education and explain scenarios (not just for each indiv, but the cu) of this hoopla. What we need is a spokesperson that can
connect with people in their ‘mindspace’ …like the intellectuals, the artists, the history repeats
itself naysayers, the 4th reading and comprehension level, the gender differential, the privileged, the poor, the huddled masses
yearning to be free…… All it takes is willingness
to seek real knowledge and the discipline to act
on it. Could be a classic with a new twist or a new trend with obvious staying power.
Need:
Gray matter
Blood red passion to learn
Steely blue determination to do it
Green thinking ( good for the soul) and
Beautiful
Black
Bottom line.
No yellow bellied, brown nosing, white flag throwing excuse makers and blamers allowed.
How’s that for a colorful way to explain to the artists (mostly non-financial types) to understand?
Knowledge is power if you use it to make positive impact on people, communities, countries and yes, even those who have no style YET.
Advance apologies for typos, spacing or grammatical issues 🙂
Orange YOU all seeing the beautifully rich color of opportunity now present? Just need a willingness to THINK and DO DIFFERENTLY to open the minds of those who need to listen and learn. to. improve. their. lives.
Purple. Yeah, I got nuthin. And frankly, I’ve always thought it was a fad.
Quote: “The influx of cash to the credit union movement would immediately plunge the receiving credit unions into a state of ill-health.”
Could you give an example of where/when this has happened or how you’ve come to this conclusion (source information, whatever).
The statement follows the link in the sentence immediately prior to it.