The Financial Institutions Banking On Occupy Wall Street's "Move Your Money Day"

Demonstrators plan to withdraw money from big banks on Saturday. A handful of credit unions and other progressive institutions see it as an opportunity. But are they really any better than the banks?

This Saturday, Nov. 5, is being promoted by several Occupy-Wall-Street affiliated groups, including, as Bank Transfer Day, aka Move Your Money Day, a day for consumers to show their dissatisfaction with bailouts and billions in profits by cutting up their Citibank or Bank of America debit cards in favor of a nonprofit credit union or community bank.

In recent weeks, angry protesters have surrounded bank branches on both coasts. Some account holders were even arrested while trying to close their accounts—not a pleasant customer service experience on either side of the equation. Some even credit the movement with Bank of America's recent reversal on debit card fees.

But one company's PR nightmare is another's business opportunity, particularly for those in the financial industry who are trying to break from the pack by offering idealism, integrity, and lower costs as selling points. Credit unions across the country are adding Saturday hours for the 5th and reaching out to potential switchers via social media. CUNA, the trade association of the nation's credit unions, has created a T-shirt to promote Bank Transfer Day, and the Credit Union League of New Jersey is running radio ads.

New Resource Bank, a small bank in San Francisco with extensive green initiatives that invests in cleantech and other sustainable companies, last year became the first publicly traded company to file as a B-Corp, incorporating triple-bottom-line ideals into its charter. They're running a "Move Your Money" campaign, where those who join by November 15 will be rewarded with a $25 donation to one of several nonprofits. "From our normal 25 accounts a week, we've been seeing 15-20 new accounts a day," says CEO Vince Siciliano. "People are coming in and saying, I've been thinking about this for a long time, and this Occupy Wall Street and Move Your Money Day have pushed me off the wall of inertia."

And recently just blocks from Wall Street, three self-dubbed "disruptive" financial services companies held a media event titled "Beyond Occupy Wall Street: Creating Industry Change for the Greater Good." "Our offices are just a few blocks away from Liberty Plaza," said Jon Stein, CEO of, who organized the event. "We took a couple people from the office to go down and walk around. I was surprised by the focus—many people were talking about the same things we were interested in when we started Betterment." Stein used to consult for large banks, and witnessed lots of bad behavior, like a bank in Ohio that was purposely targeting poor customers with low balances, reaping 80% of its checking account profits from overdraft and other fees; and a broker who took the opposite side of every trade that reached his desk, with the result that 90% of his customers lost all the money in their accounts. He started Betterment as an online place for ultra-low-cost, ultra-simplified investment management: Bundles of exchange-traded funds come in just two flavors, stocks and bonds, with low fees ranging from 0.3 to 0.9%. At the press conference, Stein, along with Jason Henrichs of online rewards bank PerkStreet Financial and Yaron Samid of antifraud service BillGuard, spoke up about the "broken" financial industry and in favor of fairly priced, responsible financial services.

"Everyone at our company was at first very wary of any involvement with Occupy Wall Street," says Stein. "We’re not down there handing out coffee or anything, but I had to make the case internally that this was something that resonated with me and that I believed we should do something about it."

Fast Company spends a lot of space covering new financial companies that claim to do things differently. Often, like Betterment and PerkStreet, these startups rely on technology to cut costs and pass the savings along to customers. But it remains to be seen whether having principles can be profitable under current regulations. A cautionary tale is that of Amalgamated Bank. The only union-owned bank in the United States, it's been drawing lots of press, since it's where the Occupy Wall Street movement itself has deposited over $500,000 in donations. But it's also under FDIC investigation for falsifying how it books delinquent loans to spruce up its balance sheet—exactly the kind of bad behavior that the folks at Liberty Plaza are protesting.

[Image: Flickr user jayantnandan]

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  • Bob Jacobson

    Here is a new tool Banxodus, for evaluating banks, credit unions, and other financial institutions in terms of their customer service, prices for services, and banking policies.  Banxodus is offered by Bold Progressive:

  • Anya Kamenetz

    I'm not exactly a fly-by-night freelancer rushing a story for clicks. I'm a senior writer for this magazine and I also happen to write a finance column that runs in over 50 newspapers nationwide. My column this month highlights credit unions as a good option for consumers wishing to move their money and save money.

    I agree with you that credit unions and community banks have a more proven business model than some of these startups. But lots of people find credit unions and small banks to be inconvenient, lacking in online services, or they simply don't meet the membership requirements. I also believe the Amalgamated story shows that just because a bank is a community bank, or even a nonprofit, and has all the right kinds of ownership and says the right things in its charter, doesn't mean it's always going to act ethically.  That's why better regulation and oversight is essential, which is the point I'm trying to make.

  • Bob Jacobson

    Your credentials don't make up for sloppy journalism, here offered up, it seems, by the editors.  The headlines slighted credit unions in the headers, but the article -- which wasn't at all about credit unions or community banks -- only commented other forms of financial operations.  That's not really your fault.

    However, now you have made some comments worthy of rebuttal.  "More proven business model than some of these startups"?  How about all of these startups?  CUs have been around for half a century or more, the startups for about a year.   

    What online services do credit unions not have?  None.  Via their association, CUs are modernizing rapidly.  I manage my personal and business finances from overseas a third of each year with no problems whatsoever, from my home 1,000 miles away the rest of the time -- and my credit union has only one branch!  All online.

    Membership requirements are a thing of the past.  2,000 credit unions, about a fourth, are community-based, which means if you live within 25 miles, you can join.  The others are hardly exclusionary.  Go to a certain school?  Work for a big company?  Have ancestors from Alabama or Sweden?  Belong to a church or service organization?  Community banks are even more open in their requirements.

    "Can you join a credit union?", 2011 Credit Union Study

    I don't think regulation of credit unions and community banks is a particularly controversial topic.  They are regulated, better than commercial banks obviously.  In part, it's the responsibility of members to stay informed, know their board members, and even run for office themselves.  A democratic institution makes demands.  Or you can place your money in Citi's or BofA's CEOs' tender graces -- oligarchs running monopoly institutions.  Which do you think is more trustworthy?

    I'll be happy to read your other article about credit unions.  The more I know about them, the more I am amazed and impressed.  Like little mammals under the feet of dinosaurs, they are the future of democratic banking.

  • Bob Jacobson

    PS I wouldn't say, as it does in your headline, that "a handful of credit unions and other progressive institutions see [Occupy Wall Street] as an opportunity."  Hardly a handful.  Here in Arizona, every one of the dozen or so substantial credit unions is running ads day and night, reportedly scooping up new customers with every viewing.  And if it's happening here, it's happening everywhere.  Tucson is one of those "All American Cities" used as an indicator of popular trends in the USA.  I have about 10 friends who are former bank customers now happy as clams that they've switched over.

    As for the following line, "But are they really any better than the banks?", we've already covered that.  They really are.  For numerous reasons.  One I didn't mention earlier:  they lobby Congress FOR the consumer.  Know one commercial bank that does that? 

    The more one reads this article, the more one appreciates how degraded editorial work has become now that everyone is on a quota system in the full knowledge that there are six people waiting for the job should an editor take the time to really get into it.  It's sad.  FC almost became a journal of record in the startup world.   Now it's just another distortion field generating faux-counterintuitive sortees.


  • Bob Jacobson

    Pretty shoddy journalism, smearing credit unions and community banks by identifying them with untested financial schemes.  Your article leads with a question about CUs and community banks that it never answers.  Instead, it goes off on the new institutions.  Sure, that's okay.  Just admit that CUs and CBs work and have worked for a very long time.

    CUs and CBs have been around for decades. The cases in which they have ripped off or deceived their customers are virtually non-existent, largely because their members and customers usually have a role in these institutions management and accounting.  We, their members, elect the CUs' boards of directors.  CBs are a little different, run more like a business, but they have the virtue that they largely serve underserved populations: the poor, the homeless, people on the move because they've lost a job or a home, veterans home the wars, etc. 

    It used to be that you had to be on a company's payroll or living in a particular neighborhood to become a CU or CB customer.  No more.  Laws have since relaxed that requirement.  Anyone pretty much can join.

    I swear by my credit union, SRI Federal Credit Union, affiliated with SRI International, the revered employee-owned think tank in Menlo Park, CA.  Its service is excellent, I never get charged for using any ATM anywhere in the USA, the rates on loans are low as they come, and the interest paid on accounts is as high as it comes these days.  I don't get hit with endless overpayment and service charges -- in fact, if I'm overdrawn (perhaps because I'm overseas), the CU accommodates me and covers my liability.  My accounts, btw, are insured to the same limits of commercial banks. 

    The tellers and even the CEO know me by name and I can call on whomever I need, right to the top, to help me with an issue (for example, a wire transfer to a corresponding bank in Scandinavia).  The online banking is top-notch and I can do mobile, transfers, scheduled payments, etc.  Without fail.  My debit card is free and my checks -- yes, I still need checks, e.g., to pay my taxes -- carry no service charge.

    Best of all, I know that every dollar my CU earns goes back into improving services and making low-interest loans to my fellow CU members.  I'm not paying for some shareholder fat-cat or hedge fund to sit high and mighty on my dime.  CUs provide accountability and transparency.  They're the epitome of economic democracy.  Next time, editors, avoid the cheap spreading of fear and give CUs and CBs their due.  And admit to your readers:  there is no good reason to stay with a commercial bank.


  • Bob Jacobson

    Thank you, Ross.  Heartfelt, too.  I <heart> my credit union. </heart>