Effects of Move Your Money Campaign Are Indirect But Present

Protesters in St. Louis marched into the lobby of Bank of America holding signs and demanding to speak to a bank executive. Protests against banks are one response to the Move Your Money campaign.

In December, Arianna Huffington of The Huffington Post launched a highly publicized campaign encouraging Americans to move their money from big banks into smaller, locally owned credit unions.  But has the initiative made any headway in the last three months, or has it faded into the background?

The effort, aptly called the Move Your Money campaign, was intended to take down the “too big to fail” banks and support the local ones. “We simply can’t count on Congress to fix things. We have to do it ourselves — and the big banks are the core of the problem,” Huffington and Rob Johnson wrote on The Huffington Post Web site.  “We need to return to the stable, reliable, people-oriented approach of America’s community banks.”

When it first launched, the campaign was all over the news because it was symbolic of America’s disillusionment with big banks, especially after the banking meltdown.

But now the frenzy has quieted, begging the question of whether the campaign has made any impact, or if it’s still trudging forward in the face of seemingly invincible and ominous financial institutions.

As it turns out, the campaign hasn’t done much to intimidate the big banks, which may support economist Larry Kudlow’s argument that there is no magic bullet to ending the “too big to fail” concept.  A former JPMorgan Chase branch manager who preferred his name not be used says small community banks and credit unions aren’t even a blip on the radar for bigger banks in terms of competition.  “It’s an uphill battle given the massive name recognition and marketing budgets of the big banks,” the source says.

But what the movement has done is create a platform for inquiry into ethical banking practices.  It has made it okay for customers to demand that banks stop taking advantage of them and expect fair financial practices.  In St. Louis, People’s Settlement St. Louis organized a protest in the Bank of America lobby.  They pitched a tent and said they weren’t leaving until they had a meeting with a bank executive.  See the video below.

The outward frustration of these Americans has been complimented by research about customer service within big banks. A New York Times story recently said that according to a report from Forrester Research, customers of the country’s biggest banks are the least likely to trust their financial institution to do what’s best for them instead of the company’s bottom line.  The article went on to list the seven least trusted banks in the country, with Bank of America, Chase, and Capital One being the bottom three.

The former Chase branch manager says all this negative publicity and frustration for the big banks has brought deposit growth to his new employer – a small community bank.  “Our deposit and loan growth isn’t from new people moving into the area,” he says. “It’s from people who are frustrated with the big guys and can’t wait to leave.”  He himself couldn’t wait to leave, and did so in late 2009.  He moved partly because he wanted to work somewhere more focused on customer service, he says. “I was tired of viewing customers as simply sales opportunities.”

At most banks, personal bankers get paid a commission amount for each new account or card they help customers open (check out the estimates on personal banker salaries here, where you will see just how much personal bankers make on average in commission dollars).

One Chase personal banker, who preferred her name not be used because she still works for the bank, says her manager recently told her she should not let a customer leave her desk before selling them something. “The more automatic stuff you have tied to your account, the harder it is to close your account,” she says.

The negative publicity sparked by the campaign and others like it has also urged some lawmakers to encourage entire states to move their money.

Del. Bill Frick, a legislator in the Maryland House of Delegates, has introduced a House Bill that will help deposit state tax dollars into local banks.  And on March 5, Los Angeles passed a “responsible banking motion” that will eventually require banks to report on how they are reinvesting in the city.

So, while the Move Your Money initiative may not have taken a bite out of the big banks yet, it has rallied the troops and raised questions about ethical banking that demand answers.

The Chase personal banker says her supervisors have made no mention of the Move Your Money campaign.  But she says she never questions or discourages customers who are closing their accounts.  “If I didn’t work at Chase, I probably wouldn’t bank here.”

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