Skeptics insist that the Occupy Wall Street protest and its spinoffs here in Washington state will have little impact on their intended targets, but don’t tell that to the busy folks over at BECU, who have seen a 280 percent increase in new accounts over the past few months. Writing in a diary on Daily Kos, local activist Robert Sargent reports on the once humble credit union’s stunning growth:
I spoke with Todd Pietzch of BECU earlier today. He told me that they acquired a record of 8700 new accounts in August, a record of 9400 in September, and as of yesterday, have hit a new record of 10,500 new accounts for October, through just two-thirds of the month.
The credit union will soon exceed $10 billion in assets, subjecting it to the “Durbin Amendment”, which slashes the debit card transaction fee cap roughly in half, to about 24¢. This will cost BECU, but they will not increase fees or add new ones as they expect to make up for the loss with growth in deposits.
You can read my own account of switching to BECU here.
BECU will eventually have to raise fees when they realize that the customers they got from the banks are the ones who are not profitable (are costly) without charging them fees.
How long before BECU is arresting people trying to close accounts? Hopefully not for a few years. Let’s enjoy it while we can.
@1, “not profitable”. You realize it’s a credit union, right?
Also, raising assets above $10 billion sounds profitable to me.
@3, raising assets does not mean profiability.
BECU is the largest credit union in Washington, and fourth largest in the United States.
I may have to bring thicker books to read while waiting in line at the ATM.
Credit Unions are, by law, non-profit entities, so that’s not an issue. BECU will continue to absorb the additional fees so long as they can afford to do so without negatively affecting service.
But hey, thanks for playing @1. We’re sending you the home version of “Banking For Dummies” in the mail…
I’m all for people moving to credit unions, but BECU isn’t really the cheapest around as far as rates go. If you sign up for pretty much any CU, you can still use all the BECU ATMs and whatnot.
Another great thing about credit unions – you could actually be involved in running it. http://www.becu.org/pdfsource/nomination…
@4, banks are in the asset management business. If they can’t do more with greater assets, they should find a new business.
What is your claim exactly? That these accounts will carry low, rotating, balances, and therefore reduce the percentage of assets the bank can use for investment activity?
Proud to be one of those 10K+ of new acct holders at BECU, and threw a couple of my $G’s their way and closed my BofA accts.
@6 Haha.
Yeah, its a coop. I also think credit unions are required to have a larger ratio of deposit accounts to investments. BECU will also get new profitable customers that can help with investments. And if we can change the laws, I think we should require municipalities to either do local banking or with a CU.
Maybe some people have read from Bloomberg that Bank of America has moved $53 trillion of its toxic derivatives — over 70% of their holdings so far — from its bank holding company to its FDIC-ensured depositors.
Not so much pressure to raise fees on depositors and accountholders when you don’t have trillions of dollars in gambling debts to cover, and when you didn’t buy a company like Countrywide.
@12 BofA should’ve been put in receivership a long time ago. But according to most of the folks on Slog, things are great and we’ve got nothing to worry about!
Exactly like VanCity Savings Credit Union when people in Vancouver BC ditched the banks.
Welcome to Freedom!
In the European finance coverage they mention “negative events” for BofA and Chase in the US.
Code for what happened as Americans ditched the bank surcharges and went credit union.
The Daily Kos post says BECU offers 6%+ on savings and checkings without noting that this is only on the first $500, and is only for savings. But it’s still awesome that they do this. This encourages everyone to put $500 in savings, boosting their assets. Each member of my family has a savings, and we each keep at least $500 in there as a result of this policy.
I wonder if we will begin to see closures of major banks in Seattle as a function of this market becoming unprofitable for them.
I also wonder if this means BECU will be opening more branches, thereby speedballing the process as it becomes ever easier for customers to make the switch.
The evidence for that will be the opening of BECU branches in far-flung corners of the Puget Sound accompanies by the closure of big banks in those same remote areas.
Here’s to the Grand Opening of the BECUs in Enumclaw, Bonney Lake and Shelton.
“over the past few months”
Man, those Occupy protests are so effective, people are *going back in time* to open accounts! That’s amazing.
(Maybe correlation isn’t causation? Especially when the correlation isn’t there?)
You guys give the occupy movement WAY to much credit. This is increase is mostly driven by the $5 debit card fees. Not that occupy isn’t relevant, but it’s still just one semi-limp noodle in the complex ramen of market pressures.
(This is the kind of thing I say when running on 1.5 hours of sleep in a 48hr period apparently.)
@16 School Employees Credit Union of Washington does the same on your first $750 deposited, as I recall.
@19 riiiiiiiiight for the Ironic Win of Viadoom
Going to switch my long term ‘high yield’ savings account from ING to BECU Certificates of Deposit. I’ll get the same rate, 0.9%, and I can add to the CD’s every month just like I do my savings account. The “Add To” feature has to be selected at the beginning or during renewal.
Ha! Remember this?
http://www.youtube.com/watch?v=laot_Eomr…
I think the Move Your Money campaign that started long before the protests deserves more credit than the occupy movement, honestly, though I agree the $5 fee was the last straw for most folks. BofA also sent out a change in terms notice a little while back for account holders announcing that their previously free accounts (including savings accounts) that didn’t maintain minimum balances would also start being charged monthly fees (AND overdraft fees if there wasn’t enough in the account to cover the monthly fee). The combination of fees would have added up to about $20 per month for my son just to keep his accounts with BofA open. I helped him close his account with BofA and open one with BECU the day we got that notice…so he’s one of the 280%.
@3
Loans are assets and deposits are liabilities.
Deposits are what is owed the depositor. Loan are owed to the bank therefore considered an asset just as Account Receivable are considered an asset for a any other business.
Not that I agree with the naysayers. This is still good for BECU and local economy.
I’ve been a BECU member since 1979. No regrets, and I’ll never go back to a for-profit bank.
@18 This movement has been brewing for years, it’s much like Mycelium in that the new Occupy protests are the fruiting mushroom body that is now visible.
@18,19: Yes, they were doing well prior to the OWS protests, but new deposits have accelerated as the protests have grown. I asked Pietzch if he thought it was the fees or the protests, and he said “both”.
Say, if I want to close my Chase account and don’t want to carry the cash that’s in it, can they charge me to put my final withdrawal in a check?
@26
I’m not sure how your post is relevant to the discussion re: @3. The article itself made the claim that BECU’s assets are growing beyond $10 billion as a result of the new accounts.
Also, yes, deposits are liabilities on the balance sheet, but when a new account opens (or an existing account holder makes a deposit), it doesn’t magically subtract from the bank’s wealth. If I deposit $1000, the bank now owes me $1000 (liability), but the bank also now has $1000 cash (asset). So each of these deposits adds to both sides of the balance sheet at once.
@19
Yes, but ramen is what we have to eat nowadays, so it makes sense.
Sincere Question: By moving my money to BECU, am I supporting Boeing, or is the credit union a separate entity entirely?
@33: The credit union was formerly Boeing Employees’ Credit Union. Now it is BECU. Many credit unions changed their names when the restrictions to membership were relaxed: e.g. Group Health –> Salal, King County Metropolitan Credit Union –> Provail. You are not supporting Boeing by moving your money to BECU. It is a separate entity from Boeing.
@33
I believe it’s entirely separate; its founders were Boeing employees, not the company.
@Danger– I am going to plagiarize your noodle analogy next chance I get.
For those of you who are new to BECU, you’re going to be amazed at the amount of interest you make on your checking and savings accounts. Real dollars, not the pennies you’ve experienced before. All this without fees!
Remember that another plus with BECU, as opposed to CitiBank or BofA (both Saudi-owned), is that they invest money locally in small business loans – which creates US jobs locally – and in local home mortgages.
As opposed to shipping your money overseas.
Joined Verity this month and will close my BofA account next month. Been meaning to make the move for a long time.
As an employee of WaMu for 10 years before the collapse I get kind of sad with all this demonizing of the bank as if it had been writing bad loans for it’s entire history.
Point of fact: WaMu only offered A paper home loans for the vast majority of it’s history.. This means very well documented and vetted customers. No junk loans. The culture was to help good people get into good homes and as a company we really were trying to be “the friend of the family.”
However in 2004 WaMu bought Long Beach Mortgage which at the time was the nations largest sub-prime lender.This brought in huge profits for the company but Long Beach remained mostly a separate entity. By 2007 we were beginning to integrate their technology into our loan processing systems but for the most part the division still existed.
Now, I’m not saying that WaMu was all roses…they did buy a huge portfolio of sub-prime mortgages and did facilitate more of those loans being made, but inthe grand scheme of things it was a very new thing as far as WaMu’s processes were concerned.
@3 I really should have said “costly” instead of not profitable. ATMs and branches cost money and BECU would not be able to absorb all the costs of customers that have small balances but use lots of ATM, branch and debit card transaction forever. Enjoy it while it lasts.
@41, I grant that it’s *possible* for these accounts to cost BECU money. The trouble is that you’re engaging in wild speculation. As a rule, banks benefit from more customers and there’s no particular reason to believe that these customers are either more taxing on services or less ‘profitable’ than any others.
And again, the article itself contains reference to asset growth caused by the new accounts. Why would we imagine that these customers are harming the credit union?
The increase is due to instituted debit card fees at Bank of America and Wells Fargo, not so much due to solidarity with the OWS movement.
@42 the problem with focusing on the amount of assets is that most of BECU’s assets are loans to its members, and a certain percentage of those will go bad. Normally they are able to make enough off the loans to pay for the higher checking/savings interest rates and operating costs of checking accounts (ATM expenses, transaction fees, etc) as well as salaries and other operating expenses. However it’s a slim margin, and when the economy tanked BECU was hurt by a lot of uncollectible loans.
Also a certain percentage of BECU’s assets is restricted because of regulations, so $1000 in deposit liabilities does not yield $1000 in assets for investment purposes.
I’ve noticed that BECU has lowered CD and regular checking and savings account interest rates recently. If a lot of people open checking and savings accounts but not CDs or loan accounts with BECU, I’m sure the board will lower the Member Advantage interest rates. This would be comparable with a bank reducing the amount of dividends paid to stockholders.
tl;dr: BECU needs your debt more than it needs your savings in order to stay solvent.
@44,
” However it’s a slim margin, and when the economy tanked BECU was hurt by a lot of uncollectible loans.”
Like virtually every financial institution.
“Also a certain percentage of BECU’s assets is restricted because of regulations, so $1000 in deposit liabilities does not yield $1000 in assets for investment purposes.”
Granted. Indeed, assumed.
“If a lot of people open checking and savings accounts but not CDs or loan accounts with BECU, I’m sure the board will lower the Member Advantage interest rates.”
Fair enough, but let’s consider that there’s no reason to suspect that these new customers will have less debt than the average person. If we’re guessing, I’d assert that people frustrated with their banks are likely to have more debt than average.
The point is, none of this supports @1’s assertion that these are somehow bad accounts which actually hurt BECU’s bottom line. If we want to turn this into an exposition about the complexities of credit union finances, I’m sure we could all be out of our depth very quickly.
@45 these people are leaving BofA are leaving primarily to avoid $5 debit card fee. If they had 20k in BofA then no debit fee. So they are obviously not BofA’s best customers, probably shy thief instituting the fee.
@46, huh? Please read the thread.
I just got my BECU account formally opened the day before yesterday, and when I asked about the spike in new memberships, the lady said that it started after the announcement of the $5 fee for debit cards at BofA. So the BECU employees at least believe that’s the main catalyst for the sudden growth.
BECU is fine for personal accounts, but try doing a business acount with them. It feels like they are “playing banker” like 5 year olds. It has taken 3 months to get credit cards issued with our business name correctly printed on them. We had to go to Costco (on their recommendation!) to get checks printed. They really gotta get their act together. Too bad competence and assholeness correlate in the banking industry…
@49 and others, there are choices in banks and CUs besides BoA and BECU. Smaller commercial banks are the way to go for small business.
A small business credit union would be great, I’ve never heard of one though.
@50, Thank you for pointing that out. Reading The Stranger you’d think that there are no other credit unions in Seattle. Though after Frontier Bank went tits up this past year I would stay away from the smaller banks unless you can do lots of research.
But check out Watermark Credit Union, Equity Credit Union, Group Health Credit Union and others. If you ask me if BECU gets really big then they too will start to act like the big banks people are trying to get away from in a few years. Money like power corrupts.