Many people involved in the financial services industry know that this coming Saturday, November 5, is being called Bank Transfer Day. (You can Google the term to find more information about it, how it got started, etc.).
And many in the credit union industry seem to be licking their chops, awaiting a slew of new members, as (they hope) millions of disaffected big bank customers observe this newly-ordained “holiday.”
I challenge credit unions to make Saturday, November 5, a BAD day.
What does BAD stand for? I thought you’d never ask. Bank ACCOUNT AVOIDANCE Day.
What I DON’T mean by “avoidance” is simply moving one’s checking account from a bank to a credit union.
What I DO mean is getting rid of the checking account altogether.
Aite Group surveyed consumers who use “alternative” financial services products (e.g., prepaid cards, check cashing services, etc.) to manage their finances, and identified a set of consumers who don’t have a checking account (not all users of alternative financial products are un- or under-banked, FYI), and rely instead on prepaid cards.
The most prevalent reason why prepaid card holders who don’t have a checking account don’t have one? They don’t want to pay fees. Not just fees for using a debit card. But fees for insufficient funds, fees for reordering checks, or even basic monthly fees.
This is an interesting perspective when you consider that many of the prepaid cards that these folks are using to manage their financial lives do have a monthly fee (and other fees) associated with them.
Are credit unions prepared to identify consumers who shouldn’t have, or could do without having, a checking account? Will they recommend to these consumers that they NOT open a checking account, and use prepaid cards instead? And do they even offer prepaid cards in the first place?
We’ll see what happens on Saturday.