US credit unions surge in popularity

(From the ft.com) US credit unions are attracting a new wave of interest as big banks have raised fees for consumers while global protests against the financial system have focused attention on corporate profits. On Friday, the Credit Union National Association, the largest US trade group, said 650,000 people had joined credit unions in the past month, compared with 600,000 new customers in all of 2010. CUNA estimated that credit unions had added about $4.5bn in new savings accounts.

The consumer reaction following Bank of America’s announcement on September 29 that it would charge customers $5 a month to use debit cards has forced BofA and fellow lenders to scrap such plans. Bank of America cancelled its planned fee on Monday, saying its about-face was in “response to customer feedback and the changing competitive marketplace”.

Wells Fargo also cancelled its own $3 pilot programme in five states while JPMorgan Chase and Citigroup have also decided against charges.

“As we adjust to changes in our business, we will continue to stay attuned to what our customers want,” said Ed Kadletz, head of debit and prepaid cards at Wells Fargo. “This means understanding their needs.”

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