When consumers threw a collective fit over fees charged by big banks for debit card use, credit unions were thought to be poised for a windfall. Customers were expected to defect in droves — and the initial data seemed to bear out this hunch: The Credit Union National Association announced in early November that 650,000 consumers had opened new accounts at credit unions and deposited $4.5 billion in the month of October. But new, and more reliable, data tells a very different story: Credit unions added only 214,000 members during this time period — and actually lost $400 million in deposits.
That 214,000 is still a decent showing; after all, credit unions added 600,000 for all of 2010, so hitting more than a third of that number in just a month is still far above average. But the revised number is a far cry from the initial claim.
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How did CUNA get its numbers so badly skewed? In an article in American Banker titled, “Credit Unions Eat Crow On Customer Numbers,” the magazine says the association’s methodology was shoddy to begin with, relying on estimates instead of hard data and phrasing survey questions in an awkward way that could lead to misinterpretation and incorrect results.
It also says member institutions that saw higher-than-average new customer numbers may have been more motivated to respond to the initial survey. On its website, CUNA says that confusion with how the questions were presented could have led member institutions to lump new checking accounts opened by existing customers in with new customers.
As for how $4.5 billion in supposed new deposits turned $400 million in the red, the article cites a CUNA economist who blames a quirk of the calendar: Months that end on a Fridays (a typical payday for many workers) tend to have higher performances than months that end on a Monday, as did October.
Despite these errors, American Banker reports that CUNA stands by its estimate of 40,000 new customers added on November 5, so called Bank Transfer Day. “[Economist] Hampel feels comfortable with that number as a ‘ballpark figure’ and it supports anecdotal evidence the group had heard,” it reports. CUNA did not immediately respond to a request for comment.
