Bank Transfer Day
Encyclopedia
Bank Transfer Day is a consumer activism
initiative calling for a voluntary switch from commercial bank
s to not-for-profit credit union
s by November 5, 2011. As of October 15, 2011, a Facebook
page devoted to the effort had drawn more than 54,900 "likes". Debit card
fees of $5 a month from the Bank of America
are among steps leading to the Bank Transfer Day protest with a November 5 deadline. Occupy Wall Street
participants support the effort even though the events are not related.
Kristen Christian, an art gallery owner in Los Angeles
, California
, said she was dissatisfied with Bank of America's "ridiculous fees and poor customer service." She created an event on Facebook called “Bank Transfer Day” and invited her friends to close their accounts at big for-profit banks and move their money to credit unions by November 5, 2011. Christian chose November 5 because of its association with Guy Fawkes
, who tried to blow up the British House of Lords
and bring Catholic rule back to the United Kingdom, but was captured on that date in 1605.
's $3 charge of the same, which Wells Fargo has now canceled due to consumer outrage. The Facebook page for the event states the following: "Together we can ensure that these banking institutions will always remember the 5th of November!! If the 99% removes our funds from the major banking institutions to non-profit credit unions on or by this date, we will send a clear message to the 1% that conscious consumers won't support companies with unethical business practices."
(CUNA) said the association's web site aimed at informing customers about credit union services has seen traffic double. CUNA members reported an increase in account openings. According to Bill Cheney, CUNA's president and chief executive officer, the current surge in account openings has been more sustained than similar surges in the past.
Between September 29, the day that Bank of America announced its (now defunct) monthly fee for debit card transactions, and November 2, credit unions received $4.5 billion in funds and 650,000 new customers, which equated to a 50% increase in new accounts. CUNA claimed that on November 5, 2011 alone, approximately 40,000 people joined credit unions, with credit unions realizing $80 million in new account funds.
Small banks and credit unions with assets valued at less than $10 billion can afford to offer extra rewards and avoid imposing additional fees, as they are exempt from the caps imposed by the Durbin Amendment.
Democratic lawmakers asked the U.S. Justice Department
to investigate the large banks that recently started charging debit card fees. A group of four congressmen claimed that major banks like Chase
and Wells Fargo may have violated anti-trust laws. In a letter to U.S. Attorney General
Eric Holder
, dated October 13, 2011, U.S. Representative
Peter Welch and four other Democrats
asked Holder to investigate whether big banks violated antitrust
laws before announcing the fees. The four Congressmen said the timing of the new fees from each bank is suspicious.
On October 12, 2011, U.S. Representatives Jason Chaffetz
(R-UT) and Bill Owens (D-NY) introduced a bill that would repeal the Durbin Amendment. According to Chaffetz, repealing the Durbin Amendment would fix the disastrous consequences of this bill. However, U.S. Representative Spencer Bachus
(R-AL), who chairs the House Banking Committee, has suggested that revisiting the Durbin Amendment was a low priority. It is unclear whether the bill will ever see a vote.
On November 1, 2011, Bank of America announced plans to cancel its $5 debit card fee in response to customer feedback.
Consumer activism
Consumer activism is activism undertaken on behalf of consumers, to assert consumer rights.-Objectives and tactics:Goals include making goods and services available to consumers safer, better quality, environmentally friendly, and more readily available....
initiative calling for a voluntary switch from commercial bank
Commercial bank
After the implementation of the Glass–Steagall Act, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S...
s to not-for-profit credit union
Credit union
A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members...
s by November 5, 2011. As of October 15, 2011, a Facebook
Facebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...
page devoted to the effort had drawn more than 54,900 "likes". Debit card
Debit card
A debit card is a plastic card that provides the cardholder electronic access to his or her bank account/s at a financial institution...
fees of $5 a month from the Bank of America
Bank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
are among steps leading to the Bank Transfer Day protest with a November 5 deadline. Occupy Wall Street
Occupy Wall Street
Occupy Wall Street is an ongoing series of demonstrations initiated by the Canadian activist group Adbusters which began September 17, 2011 in Zuccotti Park, located in New York City's Wall Street financial district...
participants support the effort even though the events are not related.
Kristen Christian, an art gallery owner in Los Angeles
Los Ángeles
Los Ángeles is the capital of the province of Biobío, in the commune of the same name, in Region VIII , in the center-south of Chile. It is located between the Laja and Biobío rivers. The population is 123,445 inhabitants...
, California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, said she was dissatisfied with Bank of America's "ridiculous fees and poor customer service." She created an event on Facebook called “Bank Transfer Day” and invited her friends to close their accounts at big for-profit banks and move their money to credit unions by November 5, 2011. Christian chose November 5 because of its association with Guy Fawkes
Guy Fawkes
Guy Fawkes , also known as Guido Fawkes, the name he adopted while fighting for the Spanish in the Low Countries, belonged to a group of provincial English Catholics who planned the failed Gunpowder Plot of 1605.Fawkes was born and educated in York...
, who tried to blow up the British House of Lords
Gunpowder Plot
The Gunpowder Plot of 1605, in earlier centuries often called the Gunpowder Treason Plot or the Jesuit Treason, was a failed assassination attempt against King James I of England and VI of Scotland by a group of provincial English Catholics led by Robert Catesby.The plan was to blow up the House of...
and bring Catholic rule back to the United Kingdom, but was captured on that date in 1605.
Overview
Bank Transfer Day encourages bank customers to transfer their cash out of big banks to credit unions. The event is in response to what critics regard as aggressive fees that big banks plan to roll out, notably Bank of America's decision to charge its debit card users with a $5 monthly fee and Wells FargoWells Fargo
Wells Fargo & Company is an American multinational diversified financial services company with operations around the world. Wells Fargo is the fourth largest bank in the U.S. by assets and the largest bank by market capitalization. Wells Fargo is the second largest bank in deposits, home...
's $3 charge of the same, which Wells Fargo has now canceled due to consumer outrage. The Facebook page for the event states the following: "Together we can ensure that these banking institutions will always remember the 5th of November!! If the 99% removes our funds from the major banking institutions to non-profit credit unions on or by this date, we will send a clear message to the 1% that conscious consumers won't support companies with unethical business practices."
Credit unions realize increased revenues
The Credit Union National AssociationCredit Union National Association
The Credit Union National Association, commonly known as CUNA , is a national trade association for both state- and federally-chartered credit unions located in the United States. CUNA provides member credit unions with trade association services, such as lobbying, professional development, and...
(CUNA) said the association's web site aimed at informing customers about credit union services has seen traffic double. CUNA members reported an increase in account openings. According to Bill Cheney, CUNA's president and chief executive officer, the current surge in account openings has been more sustained than similar surges in the past.
Between September 29, the day that Bank of America announced its (now defunct) monthly fee for debit card transactions, and November 2, credit unions received $4.5 billion in funds and 650,000 new customers, which equated to a 50% increase in new accounts. CUNA claimed that on November 5, 2011 alone, approximately 40,000 people joined credit unions, with credit unions realizing $80 million in new account funds.
Small banks and credit unions with assets valued at less than $10 billion can afford to offer extra rewards and avoid imposing additional fees, as they are exempt from the caps imposed by the Durbin Amendment.
Background
The planned debit transaction fee increase is reportedly caused by the Durbin Amendment that went into effect on October 1, which is an addition to the Dodd–Frank Wall Street Reform and Consumer Protection Act, a U.S. federal statute The Durbin Amendment limits the fees that banks can charge merchants when a consumer swipes their debit card from 44 cents to 24 cents. According to experts, a customer making 25 debit card transactions a month would lead the bank to lose $5 it would have made before the Durbin Amendment. As a result, many of the larger banks, including Wells Fargo and SunTrust, are making up for lost revenue by charging for debit card use, the cost ranging anywhere from $3 to $5 per month.Democratic lawmakers asked the U.S. Justice Department
United States Department of Justice
The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...
to investigate the large banks that recently started charging debit card fees. A group of four congressmen claimed that major banks like Chase
Chase (bank)
JPMorgan Chase Bank, N.A., doing business as Chase, is a national bank that constitutes the consumer and commercial banking subsidiary of financial services firm JPMorgan Chase. The bank was known as Chase Manhattan Bank until it merged with J.P. Morgan & Co. in 2000...
and Wells Fargo may have violated anti-trust laws. In a letter to U.S. Attorney General
United States Attorney General
The United States Attorney General is the head of the United States Department of Justice concerned with legal affairs and is the chief law enforcement officer of the United States government. The attorney general is considered to be the chief lawyer of the U.S. government...
Eric Holder
Eric Holder
Eric Himpton Holder, Jr. is the 82nd and current Attorney General of the United States and the first African American to hold the position, serving under President Barack Obama....
, dated October 13, 2011, U.S. Representative
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
Peter Welch and four other Democrats
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
asked Holder to investigate whether big banks violated antitrust
Antitrust
The United States antitrust law is a body of laws that prohibits anti-competitive behavior and unfair business practices. Antitrust laws are intended to encourage competition in the marketplace. These competition laws make illegal certain practices deemed to hurt businesses or consumers or both,...
laws before announcing the fees. The four Congressmen said the timing of the new fees from each bank is suspicious.
On October 12, 2011, U.S. Representatives Jason Chaffetz
Jason Chaffetz
Jason E. Chaffetz is the U.S. Representative for , serving since 2009. He is a member of the Republican Party. The district is based in Provo and includes large portions of central and west-central Utah.-Early life, education and career:...
(R-UT) and Bill Owens (D-NY) introduced a bill that would repeal the Durbin Amendment. According to Chaffetz, repealing the Durbin Amendment would fix the disastrous consequences of this bill. However, U.S. Representative Spencer Bachus
Spencer Bachus
Spencer Thomas Bachus III is the U.S. Representative for , serving since 1993. He is a member of the Republican Party and the senior member of the Alabama U. S. House delegation...
(R-AL), who chairs the House Banking Committee, has suggested that revisiting the Durbin Amendment was a low priority. It is unclear whether the bill will ever see a vote.
On November 1, 2011, Bank of America announced plans to cancel its $5 debit card fee in response to customer feedback.
See also
- 15 October 2011 global protests15 October 2011 global protestsThe 15 October 2011 global protests were part of a series of protests inspired by the Arab Spring, the Spanish "Indignants", the Greek Protests and the Occupy movement. Global demonstrations were held on October 15 in more than 950 cities 82 countries. The date was chosen to coincide with the 5...
- ATM usage feesATM usage feesATM usage fees are the fees that many banks and interbank networks charge for the use of their Automated Teller Machines . In some cases, these fees are assessed solely for non-members of the bank; in other cases, they apply to all users...
- Bank runBank runA bank run occurs when a large number of bank customers withdraw their deposits because they believe the bank is, or might become, insolvent...