R.I. credit unions gain from big-bank exodus

This holiday season, Rhode Island’s credit unions may add an unexpected new name to their Christmas shopping lists: Bank of America. More

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Focus: BANKING & FINANCE

R.I. credit unions gain from big-bank exodus

PBN PHOTO/MICHAEL PERSSON
LINE OF CREDIT: Karl Kozak, president and CEO of Pawtucket Credit Union, saw his institution experience a 25 percent hike in new members during October.
Posted 12/12/11

This holiday season, Rhode Island’s credit unions may add an unexpected new name to their Christmas shopping lists: Bank of America.

Since the North Carolina-based banking giant announced its now-aborted plan to charge customers a $5 monthly debit card fee in September, credit unions here and across the country have seen a surge in new customers outraged by the perceived greed of large banks.

“I have not seen anything like it,” said Arthur Paul, vice president of marketing for People’s Credit Union in Middletown, which saw a 72 percent increase in new members from Sept. 25 through Nov. 12. “Maybe if we run a campaign you will see a little bump, but not sustained like that.”

An estimated 4,500 Rhode Islanders joined credit unions between Sept. 1 and Oct. 15, 50 percent more than joined during the previous six-week period, according to the Credit Union Association of Rhode Island.

Although Bank of America’s proposed fee, which the company later abandoned in the face of customer backlash, was credited with starting the migration to credit unions, it was accelerated by the viral “Bank Transfer Day” campaign and anti-corporate sentiment nurtured by the Occupy Wall Street movement.

Bank Transfer Day, which urged people to leave large banks for smaller local institutions by Nov. 5, was particularly popular with credit unions, which across the country reported 40,000 new members and $80 million in new deposits on that day alone, according to the Credit Union National Association.

“In the beginning it was just Bank of America and then we started to hear it about the other large banks,” said Karl Kozak, president and CEO of Pawtucket Credit Union, which reported a 25 percent spike in new members during October. “People were pretty vocal about it.”

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