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Just how bad was the backlash from Bank of America’s now canceled plan to charge $5 a month for debit card use?
Two new polls provide some indication that the institution’s highly criticized move may have sent hundreds of thousands of customers fleeing to credit unions. And it’s not even Bank Transfer Day, yet.
A new survey from the Credit Union National Association found that credit unions have gained at least 650,000 new customers since September 29, the day Bank of America announced the new debit card fee. As the Los Angeles Times notes, that’s more than the 600,000 customers who joined credit unions during the entirety of 2010.
By the association's tally, deposits into those new savings accounts totaled $4.5 billion, which, according to Reuters, is more in deposits than credit unions typically get from their entire customer base in a month.
A second poll by Harris Interactive highlights the disparity between customers' loyalty to the respective financial institutions. Nearly 90 percent of credit union customers said they were extremely or very likely to stick with their current institution, compared to only 40 percent of BofA customers. Other big banks didn't fare much better: Only 46 percent of JP Morgan Chase's customers and 54 percent of Wells Fargo/Wachovia's customers indicated a strong intention to stay put.
Was a $5 monthly fee really all it took to send customers fleeing? Critics of the big banks say not exactly, it was just the tipping point.
Credit unions have upped their advertising and recruitment efforts as momentum from customer frustration – not to mention Occupy Wall Street – increased. That momentum may have provided an opportunity to attract new customers already frustrated with their current institutions, but, until recently, not willing to deal with the hassle of switching banks. The $5 fee, was simply "the last straw," for many, as small business owner Cheryl Pomeroy told Reuters.
But banks say the new fees are necessary because of new limitations on debit card fees, thanks to a provision in the Dodd-Frank financial reform law. Many account holders have already seen the end of free checking accounts, or an increase in monthly fees. John Hall, an American Bankers Association spokesperson, told Reuters that there might be options for angry customers at their current institution, and urged would-be account-closers to first search for a "better product at your own bank."
Bank of America, meanwhile, says it won't have deposit data for the same period available until January – so there’s no word yet on whether the bank lost as many customers as the polls suggest.