For months now, Americans have participated in the Occupy movement against what they call corporate greed. Many of them say they’re fed up with the big banks increasing fees and charges, and are moving their money to credit unions and community banks.
This is one in a three-part series of articles on banks, credit unions, and the “unbanked” in Minnesota:
• Thousands of Minnesotans move money to credit unions
• Corporate banks “very important” for some
• Many Minnesotans stay unbanked
Jessica Davis, of Minneapolis, stood in solidarity November 6 with about 70 other Occupy Minnesota demonstrators before a north Minneapolis house. A full-time employee at a Caribou Coffee shop, Davis said she could no longer stand the U.S. Bank and M&I Bank, where she has been depositing her earnings for more than four years.
On November 18, Davis moved her money to a local credit union. According to Minnesota Credit Union Network spokesperson Rachel Anderson, that makes her one of more than 11,000 new credit union members in Minnesota since the end of September. Nationwide, during the same timeframe, 650,000 have joined credit unions.
“I’m really sick of banking with someone that is making profits for themselves instead of making profits for me,” said Davis, 21, who plans to go back to Minneapolis Community and Technical College in January to pursue a nursing degree. “If I invest my money in a credit union that’s local, the money stays here and will benefit members of the credit unions and not just CEOs.”
Credit unions exist to serve members, not to profit from them, said Rachel Anderson. “Credit unions’ customers, on average, save about $76 a year.”
More than 600 members joined Minnesota credit unions with up to $1.3 million in deposits, after the social media-sparked Bede ank Transfer Day on November 5, which called on Americans to pull their money from big national banks and put it in credit unions.
“There is no fee to join,” Davis said. “The main advantage is no ATM fee and the money that is made at the bank goes to benefit the members.”
Some of the customers said the move is a protest against the fees some banks have recently started charging. For example, even though the Bank of America later dropped the plan, they announced in late September that debit cardholders would be charged five dollars a month.
Davis said her main bank, M&I Bank, also recently started charging fees for withdrawing money from its automated teller machines. This is in addition to two dollars, which the bank charges for taking money out of other ATM machines.
“Another reason I’m leaving the U.S. Bank is that they kept sending me all these pre-approval notices for credit cards,” said Davis, who shifted her saving and checking accounts to a Minneapolis Wings Financial Credit Union. “When I went down there to apply for credit cards, they denied me because they said I didn’t have any credit.”
“My big thing with the banks in the past is that they have fees for overdrafts,” said Jamie Schwesnedl, a member Wings Financial credit union. “And I think I wasn’t overdraft, but they’d make some mistakes, and I’d be on the phone for like three hours to get them to fix the mistake and credit me the money. But with credit unions, you just come in or call, and they’ll be like ‘Hey you. Oh, we’re sorry.’ It’s just such a small operation that they know all the members.”
How credit unions differ from banks
“The main difference is that we’re member-owned and operated,” said Renee Aymar, member service leader at Wings Financial Credit Union, located at 913 E. Franklin Avenue in south Minneapolis. “We don’t have one big person at the top. We’ve a board of directors that all our members get to vote for every year.”
Every credit union has different member qualifications. For Wings Financial Credit Union, anyone who lives, works or goes to school in the Twin Cities’ seven metropolitan area counties can be a member.
Credit unions return earnings to members in the form of free or low-cost services and lower loan rates, Anderson said. “As members of credit unions, individuals have a voice in the operation of the organization and benefit from any earnings the credit union receives.”
Credit unions offer a lot of classes for youth to learn how to balance checkbooks and know the importance of credit roles, Aymar said, adding that they have a “better rate” on both savings and loans.
“We offer all the same services as the big banks such as wire-transfers, checking and saving accounts and loans,” Aymar said, including car loans, boat loans, home loans and credit cards.
“We’ve a high interest checking account,” Schwesnedl said. “We’ve also done a home loan through Affinity Plus, and they were just great to work with. In terms of a mortgage, it’s just so much nicer than the bank.”
Minnesota has 144 credit unions in the state that serve more than 1.5 million members.
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