Anger at big banks may have subsided, but credit unions are still gaining in the Seattle area.
Remember Bank Transfer Day?
I didn’t either, but it got a lot of press back in 2011. In September of that year, Bank of America announced a $5-a-month debit-card fee. Anti-big bank sentiment — already strong in the wake of the Wall Street bailouts — hit near fever pitch. Activists encouraged consumers to switch en masse on Nov. 5 from commercial banks to not-for-profit credit unions.
It was a great success in the Seattle area, where credit unions reported a surge in new membership. We wrote about it at the time, but also noted that representatives of local credit unions said they didn’t expect the influx to last.
Well, the anger at big banks may have softened a bit since those days, but the migration to credit unions here shows no signs of abating.
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According to data from Nielsen Scarborough, a record 31.5 percent of people in the Seattle metropolitan area now use a credit union as their primary bank — up from 23.2 percent in 2008. Among the 50 largest metros, that ranks as the largest increase in credit-union banking.
The credit unions’ gains have come at the expense of commercial banks, and in particular Bank of America. In 2008, B of A and credit unions were nearly tied in the Seattle market. Now, more than twice the number of consumers use a credit union as their primary bank compared with the country’s second-largest bank.
There are 60 state-chartered credit unions based in Washington, and one-quarter of them are in the Seattle-Tacoma area. According to Linda Jekel, director of credit unions for the Washington Department of Financial Institutions, all of them are seeing strong growth. In fact, things have barely slowed since 2011, when the average growth in assets for Washington credit unions was 8.8 percent. Last year, it was 7.6 percent.
One thing that is appealing about credit unions to consumers, Jekel says, “is that their deposits are being loaned out to their neighbors and the community” rather than going to Wall Street or overseas.
And that’s something that resonates strongly in the Seattle area. “The culture and attitude of consumers here is unique. They want to know who they’re doing business with,” says Troy Stang, president and CEO of the Northwest Credit Union Association. According to Stang, the cooperative structure of credit unions aligns perfectly with the values of Seattle consumers.