Bank Transfer Day, the movement that urged bank customers to close their accounts and instead deposit funds in credit unions on or before November 5, led to at least 650,000 new credit union members and a total of $4.5 billion in new deposits, according to the Credit Union National Association.
About 80 percent of credit unions in the U.S. saw an increase in accounts in October, with membership increases of 10,000 or more in 21 of the 50 states and the District of Columbia in the past month.
California credit unions saw the biggest gains, adding about 90,000 new members and $624 million in new deposits.
However, despite the loss of capital and customers, there are some analysts who argue that “Bank Transfer Day” was actually in the banks’ favor. How? Motley Fool columnist Morgan Houselexplains (h/t Christian Science Monitor):
One of the drivers behind [Bank Transfer Day] is people trying to teach banks a lesson. The irony of that is since the financial crisis, and especially over the last three months as there has been a panic about Europe . . . banks have been inundated with cash deposits.
They’ve been seeing a higher inflow of deposits than they can turn into loans.
But how does that translate into “Bank Transfer Day” working in their favor? Apparently, the high inflow of deposits “puts pressure on their margins because banks have to pay [Federal Deposit Insurance Corp.] premiums and overhead costs.”
By removing hundreds of small-time accounts with low balances, they would actually be saving money on their premiums.