This is a really interesting article speculating that credit unions are
poaching clients from big banks. Interestingly, it notes that the big banks may not be all that disappointed
to be losing some of these customers. That being said, if this was more
than just a few customers, I am sure the banks would be a little more
concerned. From the anecdotal evidence out there, this appears to be highly
symbolic, but not terribly extensive shift of deposits. As the article
notes, big banks prefer the big depositors where they can make money.
And big depositors seem to prefer the security of a big bank, as opposed
to the statement they can make by going to the local credit union.
Reading this article brought to mind a lot of conversations that I have
with clients going into bankruptcy. I warn them to stay away from Wells
Fargo and Union Bank, because they might have their deposits frozen. When
I initially thought about this, I thought, “man, that’s a
stupid thing for these banks to do because they will lose all of these
customers.” But I think some of these big banks don’t mind
losing clients who are in bankruptcy, because the deposit amounts are
not going to be very large. One thing that I tell these clients is that
big banks don’t think the way individuals or small businesses think.
They think in non-emotional, macro-economic terms and will sometimes make
what appears on the surface to be a ludicrous economic decision because
the data supports the decision. So, don’t get frustrated with how
big banks think. Just take your money elsewhere.