An I've Been Mugged reader at the American Bankers Association provided a link to this December 6 American Banker article: Credit Unions Eat Crow On Customer Numbers. The article reported that the Credit Union National Association (CUNA) revised downward its initial estimate of the number of new accounts opened at credit unions by consumers who moved their money from large banks during the weeks leading up to Bank Transfer Day.
The CUNA is a trade association of 90 percent of 7,400 state and federally chartered credit unions serving about 93 million Americans. The CUNA originally estimated on November 3 that consumers opened 650,00 new accounts at credit unions from September 29 to November 2. The revised estimate is a third of the initial estimate: 214,000 new accounts at credit unions during this period. The American Banker article concluded:
"The [CUNA] association's scaling back of its numbers on Monday gave credence to banking industry officials and others who criticized the association's methodology last month."
The CUNA has admitted that its initial estimate was "rushed and flawed." The CUNA has not changed its estimate of more than 40,000 new credit union accounts opened by consumers on November 5, Bank Transfer Day.
I found the title of the American Banker article unnecessarily excessive: "Credit Unions Eat Crow On Customer Numbers." First, final new account numbers are not yet available, only estimates. Second, I hope that ABA members stay focused on the needs of consumers rather than this one-upmanship about a single flawed CUNA survey. If big banks truly were meeting consumers' needs, then this move-your-money situation would not exist. Banks have a lot of consumer trust to regain after huge credit card interest rate increases and alleged foreclosure abuses during the past two years. A recent consumer satisfaction survey found:
"Consumer satisfaction with credit unions has soared this year, posting scores well above their large-bank competitors, according to the 2011 American Customer Satisfaction Index... The satisfaction score for credit unions rose 8.7 percentage points to 87 points on a scale of 0 to 100. The index said it is the highest satisfaction score ever for any of the 47 industries."
Third, if you read about the genesis of Bank Transfer Day, it was a voluntary call by a person for consumers to move their money by November 5. Consumers can continue to move their money after November 5, and it may simply take consumers longer to move their money. Fourth, consumers value stability. This analysis suggested that credit unions survived recent economic crises better than commercial banks.
"Membership and Total Assets Growth Continues: Despite a slight decline in number, federally insured credit unions added more than 450,000 members during the third quarter, growing to 91.4 million individuals. In all, membership has increased by almost 1 million during the first 9 months of 2011. Credit union total assets also continued to expand, standing at $951.1 billion on Sept. 30, an increase of almost $8.7 billion for the quarter... For the second quarter in a row, credit union lending increased to end the period at $567.1 billion, an increase of $3.1 billion over the prior quarter. New auto loans and other real estate loans continued to decline, while used vehicle loans, unsecured loans—including credit cards—and first mortgage real estate loans again all rose during the quarter. Notably, demand for non-federally guaranteed student loans jumped 20.5 percent during the third quarter to end at $1.3 billion on Sept. 30."
The NCUA report included only the 7,179 federally insured credit unions, and excluded results for October 2011 and Bank Transfer Day. I look forward to reading in January comprehensive actual results, not estimates, from all sources for all of 2011.