Official newspaper of The University of Texas at Austin

The Daily Texan

Official newspaper of The University of Texas at Austin

The Daily Texan

Official newspaper of The University of Texas at Austin

The Daily Texan

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October 4, 2022

Students frustrated with big bank chains plan to close accounts on Bank Transfer Day

UT students will be participating in Bank Transfer Day Saturday, where they will close their accounts at commercial banks and open new ones at local credit unions.

While Bank Transfer Day is not officially affiliated with Occupy Wall Street, its goal has garnered support from the movement and the protesters in its satellite occupancies.

The planned event comes after commercial banks announced new and increased service fees for their customers. Kristen Christian, a Los Angeles-based art gallery owner, created the Bank Transfer Day event on Facebook in response to imposed fees and poor customer service from Bank of America.

Credit unions, like the University Federal Credit Union, are usually smaller and locally based. Commercial banks like the Bank of America are financial corporations with branches across the world.

Bank of America announced plans in September to start charging customers $5 a month when they use debit cards to make a purchase. Within days, Citi Bank raised the monthly maintenance fee on its mid-level checking account to $15 a month from $7.50 a month and upped the required minimum balance of linked accounts from $6,000 to $15,000.

After a month of public outcry over the new fee, Bank of America dropped proposed plans to charge debit usage fees Tuesday.

These debit fees are in response to legislation passed earlier this year that imposed a federal cap on debit card “swipe fees,” or the fees charged to retailers by major banks every time a customer pays with a debit card. The legislation capped those fees to 21 cents per transaction from a previous average of 44 cents.

Last year, congressional legislation also required banks to give customers the option to have transactions declined instead of being charged overdraft fees.

To recoup those lost revenue streams, the Wall Street Journal predicted earlier this year, banks would start charging for services.

UT’s own Occupy satellite will be participating in Bank Transfer Day. Headed by rhetoric and writing assistant instructor Trevor Hoag, the group consisting of 35 Facebook-confirmed participants will be walking down Guadalupe to the Bank of America, Wells Fargo and Chase branches to close their accounts Saturday morning.

Hoag said he transferred to the University Federal Credit Union, which is based in Austin, two weeks ago after learning that they offered the comparable services to what he was receiving at Chase. He also said that UFCU was the more ethical banking option for himself.

“Credit unions weren’t complicit in the bailout and they weren’t complicit in the predatory lending,” Hoag said.

The past month has seen bank transfers similar to Hoag’s. According to a poll conducted by Independent Community Bankers of America, 60 percent of responding independent banks saw an increase in new account openings.

That movement of consumers is happening in Austin as well.

UFCU spokeswoman Sheila Wojcik said at the three branches in the central Austin area, the number of new accounts opened in October was twice their original projection.

“People directly said in many instances that they were transferring from a big national bank like Bank of America,” Wojcik said. “We have seen an impact.”

Senior finance lecturer Regina Hughes said the primary difference between credit unions and commercial banks is the ownership.

Hughes said commercial banks, like Bank of America and Wells Fargo, are for-profit entities owned by shareholders. Credit unions are controlled by its members, who directly make policies for other members and are not necessarily looking to make a huge profit. They also do not provide the same variety of services, such as types of investments, offered by major commercial banks. Commercial banks, she said, are corporations that invite people to become customers, but their goals can be different and separate from those customers.

The services offered by credit unions are enough for architectural engineering and philosophy sophomore Kathleen Hetrick, who said she will be participating in Bank Transfer Day.

“This doesn’t have anything to do with capitalism. It has to do with companies not functioning right and stealing from people. It’s a morality issue almost,” Hetrick said. “I can’t really do too much about the bank structure itself, but I can take my money out of their bank.”

Published on Friday, November 4, 2011 as: Students to switch accounts on first Bank Transfer Day

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Students frustrated with big bank chains plan to close accounts on Bank Transfer Day