Bank Transfer Day

Bank Transfer Day, which was started in response to plans by big banks to charge fees that many people saw as excessive, encourages people to transfer their money from big commercial banks to not-for-profit credit unions. On September 29, 2011, Bank of America announced a $5 monthly debit card fee, and Wells Fargo announced a similar $3 fee around the same time. The day got its start when Kristen Christian, an art gallery owner from Los Angeles, California, who was critical of Bank of America's fees and customer service, created a Facebook event called "Bank Transfer Day." She chose November 5 as its date because Guy Fawkes—who attempted to blow up the British House of Lords in order to bring back Catholic rule—was captured on the date. Thousands of people RSVP'd to the event and the national media took notice of the day. Many also supported it from the Occupy Wall Street movement, which was at its height at the time. The hope was that the day would send a clear message to big banks that companies with unethical business practices wouldn't be supported. Because of pushback from customers after Bank of America instituted their $5 fee, the bank canceled it on November 1, just days before the first Bank Transfer Day.

Following the day, the Credit Union National Association (CUNA) reported that about 40,000 people joined credit unions on it, with $80 million in funds coming in. They also claimed that between September 29—the date that Bank of America announced their $5 fee—and November 2, credit unions received 440,000 new customers and $4.5 billion worth of investments. In the year following the first observance, the number of credit union members continued to rise at a high rate. Although there hasn't been an officially-sanctioned Bank Transfer Day since the first year, the holiday has continued to be celebrated unofficially.

Banks and credit unions offer the same services, like checking accounts, credit cards, loans, and CDs. Their difference is in their ownership and how money is made. Banks are for-profit, are usually public, have customers, and have board members and shareholders, while credit unions are nonprofit, are usually small and local, have members, and have member-owners who are usually elected. Banks focus on making money and pleasing shareholders, while credit unions focus on their members.

Some see credit unions as offering better customer service, but they can't compete with banks when it comes to accessibility: they have fewer branches and ATMs, and often have shorter banking hours and less online banking options. Credit unions are more restrictive in who can join, based on their location and other factors. Banks usually have higher fees, lower interest rates on deposits, and higher interest rates on loans, but have very good credit card rewards. Credit unions usually have a membership fee for opening an account, while banks usually have a minimum amount you must deposit when opening an account. Although there are advantages and disadvantages to both credit unions and banks, many see credit unions as being more advantageous, and they celebrate Bank Transfer Day today.

How to Observe Bank Transfer Day

The day is simple! Celebrate by transferring the money you have in banks to a credit union! If all of your money is already in a credit union, give yourself a nice pat on the back and encourage others to follow your example.

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