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Occupy, Transfer efforts have little effect on state banks
Occupy Wall Street directed angst and anger toward the financial market and initiated a discussion on income disparity. The event also led to a much smaller protest here called Occupy Grand Rapids.
The unrelated Bank Transfer Day directed angst and anger toward the fees that big banks charge and the poor customer service they allegedly practice, and urged depositors to move their money into credit unions and smaller banks. The event turned out to be a success for credit unions in certain parts of the country, and helped the stock prices of some of the nation’s biggest banks fall.
But what meaning did the events have for state and local banks? Not much, at least for the time being.
The Michigan Bankers Association, headquartered in Lansing, has 150 members. MBA Vice President of Membership and Communications Gail Madziar said 98 percent of the banks headquartered in the state and 92 percent of the banks that do business in Michigan are members.
“If you go by sheer numbers, there are much fewer large banks here than there are medium and-small-sized banks. So while we represent basically the entire industry in Michigan, the numbers are much greater for the smaller banks,” she said.
Regarding the occupy movement, Madziar said the association understands that some consumers are unhappy with a portion of the industry and respects their right to express that dissatisfaction. But as far as the association’s members are concerned, she said the movement hasn’t had an impact.
“For the most part, these are community banks. The banks here in Michigan serve their customers and their communities, and are cornerstone pillars of their communities. And they work very hard to keep those communities robust because there isn’t a bank that will do better than the community it resides in. If a community is having a hard time, that’s not going to be good for a bank,” she said.
“One of the things that is important to look at is to distinguish between Wall Street investment banks and your commercial bank down the street. Occupy Wall Street, I think, focused more on the whole investment banking industry, and that is probably very different from the three banks someone may have called to talk to. They are like night and day,” she added.
As for transfer day, Madziar said it apparently wasn’t a concern for members. “Most of their customers are happy with their banks. When you ask, generally, how consumers feel about their banks, they think their banks are great,” she said. “It’s those Wall Street banks — it’s those other institutions that need to be reformed.”
Grand River Bank President and CEO David Blossey said he saw the social media that ignited and drove transfer day as more symbolic than results-driven. “But I think it is also sending a strong message that most people are frustrated by the lack of a level playing field in the financial services arena. However, because banking is a competitive industry, consumers have alternatives when they are unhappy, and community banks, like Grand River Bank, stand ready to meet their needs with localized products, services and a proven community commitment,” he said.
Blossey said he believes consumers want to have a good relationship with a bank, and it is important to them to create one. But he felt it is vital for them not to just look for the cheapest products when they shop for that relationship, as cheaper products usually mean fewer services.
Although the occupy and transfer events hasn’t left a substantial mark on most banks in Michigan, Blossey said that there may be a time down the road when a fuller effect might change the industry and push it back to an earlier era — a time when smaller was better.
“This may be the beginning of a return to ‘the way we were,’ as consumers and small-business owners look to community banks who stand ready with support and resources to help them meet their challenges and to support their success.”