Monday, November 7, 2011

American Consumers Will Continue to Drop Banks for F.E.E.S.

by Thomas Hinton

In an era when consumers are frustrated with Wall Street and big banks, it’s not surprising that more than 675,000 people responded to the social media movement known as Transfer Day to drop their banking relationships in favor of credit unions and small community banks. What is surprising is this. Anyone with a checking account – and that’s about 200 million Americans -- knows that changing financial institutions is not a simple process. It takes time and the process requires a small mountain of forms, paperwork, documentation and signatures in order to complete the process.

But, when you consider how upset and angry consumers are with banks for threatening to raise debit card fees and charging for traditional services that were once free, it’s not surprising that consumers are walking across the street to start new banking relationships with credit unions and smaller community banks.

We refer to this consumer syndrome as “FEES” which stands for “Feeling the Economic Effects.” There’s no question consumers are in financial pain and their response to the insensitivity of big banks has been to pull their accounts in favor of small community banks and credit unions that are renowned for their customer service and friendly banking terms.

While the percentage of new customers that have made the switch from major banks to credit unions and community banks since October 1 is very small – less than one-half percent according to the American Consumer Council -- and their deposits represent less than $5 billion, the switch of that many customers in a six-week period should send a clear distress signal to major banks and their trade associations that consumers have had enough! Banks need to change their policies and customer relations practices if they want to stop the bleeding and start to win back disaffected consumers.

The American Consumer Council forecasts that one percent of consumers, approximately two million people, ultimately will switch their banking relationships to credit unions and community banks in the next 90 days. Such a dramatic shift by consumers will certainly help credit unions and community banks raise their visibility and improve their low-profile image among middle-class consumers who have suffered the most economic pain since 2008. It will also put credit unions on the radar screen with millions of disenfranchised consumers who have yet to make the switch, but are now talking to friends and relatives about their financial frustrations.

What else do the Transfer Day numbers tell us? Well, when you consider that the number of consumers who have already switched to credit unions is nearly double the number predicted by the organizers of the Transfer Day movement, that’s significant. What it tells me – and the American Consumer Council agrees – is that future anti-bank social media campaigns will continue; and, subsequent campaigns will morph into much larger movements that will attract more consumers to credit unions and community banks at the expense of large banks.

It also tells me that there is a major under-current gaining strength in the United States that will embolden consumers to take on bigger fish such as the oil giants, pharmaceutical companies, lobbyists, trade associations and even local, state and national governments that are grossly out-of-touch with millions of consumers who feel as though the American Dream is slipping away from them and their children. The harsh reality is this. It is slipping away, and consumers are not going to lay down and allow that to happen.

About the Author. Thomas Hinton is president and chief executive officer of the American Consumer Council, a non-profit consumer education organization with more than 116,000 members and 44 state consumer council affiliates. For more information:

Saturday, November 5, 2011

American Consumers Take to the Streets and Banks

by Thomas Hinton

Despite the continued economic hardships facing so my Americans, this has been a fascinating week for redressing the rights of millions of disaffected consumers. Although the Occupy Wall Street movement is losing some momentum, the average middle-class consumer found a new way to organize and vent their frustration with major banks. The negative response among consumers began when major banks threatened to charge a monthly debit card transaction fee. The outcry was fast and loud!

Then, on Friday, November 4, Transfer Day occurred. This event was organized by consumer groups to encourage millions of unhappy bank customers to move their accounts to credit unions and smaller community banks that enjoy a reputation of being member-focused and customer-driven not to mention great customer service!

Organizations like the non-profit consumer education group, the American Consumer Council, reported more than 1,400 new members joined its ranks in order to lend their voice to consumer concerns and affiliate with a credit union associated with ACC’s network. The Credit Union National Association (CUNA) reports that customers moved an estimated $4.8 billion to credit unions in the past five weeks since the debit card fee debacle first aired.

While most large banks have abandoned their plans to levy a monthly debit card fee, the damage has already been done to their credibility and integrity. Consumers were already frustrated and angry at major banks and investment firms dating back to 2008, when the recession started and U.S. taxpayers were required to lend billions of dollars in bailout money to major Wall Street firms and banks. So, Transfer Day was one way for consumers to vent their anger at the very people who got us into this economic mess – the 1%, if you will, who have been the target of the Occupy Wall Street protesters.

Granted, the transfer of nearly $5 billion from major banks to credit unions and community banks is a meager sum, but it’s a start. Hopefully, Transfer Day caught the attention of the major banks who now know that consumers will vote with their feet and no longer hesitate to uproot their financial accounts and move their money to consumer-friendly credit unions and community banks that really do care about people.

About the Author: Thomas Hinton is president of the American Consumer Council, a non-profit consumer education and advocacy organization with over 116,000 members and 46 state affiliate consumer councils. Mr. Hinton is a popular speaker at corporate and association events on consumer issues and trends. Contact:

Tuesday, October 25, 2011

The Foul Mood of American Consumers

There’s no question that 2011 is fast becoming “the year that wasn’t!” Consumers had high hopes that the American economy would begin to rebound in 201 after three dismal years, but that hasn’t been the case.

Blame it on Wall Street, the Congress, President Obama or even the European economic mess – but the stark reality is consumers continue to feel the strain and pinch of high unemployment, upside-down mortgages, foreclosure pressures and shrinking incomes.

While the United States is no longer immune to global economic hiccups, we have the ability to fix our own economic house and put Americans back to work. What’s frustrating is nothing substantive is getting done in Washington to solve these national issues and consumers are both disenchanted and ready to fight back.

Certainly, there’s pent-up demand among consumers to purchase new vehicles, make overdue home repairs, purchase household goods and get back to some sense of normalcy. But, as long as consumers lack confidence in our national government to jump-start the process with meaningful solutions, they’ll continue to sit on the sidelines and wait. Obviously, this will only prolong our economic challenges since two-thirds of our national economic growth is consumer-driven.

A year ago, I predicted that fed-up citizens would make their voices heard. That has happened through the “Occupy Wall Street” protests not only in the United States, but around the world. Frankly, people are fed-up! Surveys and polls suggest that the next significant action on the part of consumers will be a major voter revolt in 2012. Americans will voice their frustration at the polls by “voting the ins out!” Political parties aside, it appears no incumbent will be safe in 2012. There is a growing sense that voters will choose to “throw the bums out” and seek a fresh start – one that is built on cooperation and progress.

Given Congress’ dismal record, a national house-cleaning is in order. If incumbents want to hold onto their jobs they had better address the economic woes of consumers – and fast! The clock is ticking.

About the Author: Thomas Hinton is president of the American Consumer Council, a non-profit consumer education organization with more than 116,000 members across the nation and 46 state affiliates.

Monday, May 16, 2011

Lower Swipe Fees Won’t Help Consumers

by Tom Hinton

One provision of the financial reform legislation passed last year by Congress requires the Federal Reserve to issue rules that place reasonable limits on debit card fees. Commonly known as Interchange Fees or Swipe Fees, these small fees are what banks and credit unions charge merchants for processing each and every use of your debit card. Merchants pay the fee, but often pass on these fees to consumers as a cost of doing business. Of course, banks and credit unions that issue debit cards have come to rely on swipe fees as a healthy profit center.

In December, the Federal Reserve proposed capping fees at 12 cents per transaction, down from an average of 44 cents. While such a drastic cut in debit card interchange fees should be welcome news for consumers, the truth is consumers will never see a penny of that savings! In fact, consumers will most likely end up paying more money to their banks and credit unions because financial institutions will have to make up for that lost revenue somehow, someway.

The Interchange Fees issue is one more example of how Congress – while well-intentioned – has turned lemonade into lemons! Nobody wins. Banks and credit unions, which rarely agree on anything, are aligned against the Fed proposal to lower fees because they will take a direct hit in terms of lost revenue. On the other hand, merchants can’t wait for the Fed’s gift, which according to economic experts, will result in a $12 Billion savings for Main Street. And, as usual, consumers get the short-end of the stick because merchants are not required to pass on any debit card fee reductions to us. To make matters worse, consumers face the possibility of losing their free checking accounts and seeing lower deposits rates by banks and credit unions. This issue could also trigger tighter credit rules being introduced by banks and credit unions to protect them from further credit defaults by consumers.

In the final analysis, the Interchange Fees (Swipe Fees) issue is a hot potato that will not only burn the Federal Reserve, but also banks, credit unions and America’s consumers. We think the Fed should drop it until things cool down and a more rational solution is found.

About the Author:
Tom Hinton is president of the American Consumer Council, a non-profit consumer education organization with 111,000 members. He is also a popular business author and speaker who frequently contributes articles on consumer issues and business excellence. He can be reached at

Wednesday, February 2, 2011

What Consumer-Citizens of the World Really Want: The Egyptian Lesson

by Thomas Hinton

It’s both disturbing and encouraging to see the strife taking place in Egypt and Tunisia. In America, we take for granted so many of our basic rights and entitlements that are causing millions of citizens to take to the streets in protest of the policies of their authoritarian governments. It’s disturbing because the very rights and opportunities these people are demanding are basic economic building blocks that every citizen should enjoy regardless of where they live or the religion they practice – freedom of speech, the opportunity to live in an economic environment that offers hope for a better life, and the right to assemble without being shot or attacked by armed thugs operating under the guise of self-serving politicians.

What is playing out in Egypt and Tunisia is also encouraging because the voice of the people is finally being heard. And, it is being heard not only in the streets, but within the inner sanctums of every repressive government around the world.

Some commentators have suggested the Arab uprisings are being fueled by fanatics and religious extremists. There’s little, if any, evidence to support such claims. I believe these protests are the result of frustrated consumers who see unlimited economic opportunities in neighboring countries and throughout western societies. Unfulfilled, exasperated and without any chance to climb the economic ladder of success, these well-intentioned protesters are asking a basic human question of their tyrannical leaders: “Why can’t we enjoy the good life?” Not only is it a fair question, but one that every government should respond to or face defeat. But, governments that exploit their citizenry don’t believe they need to answer such questions because they are not in the business of lifting-up the masses. They’re in the business of suppressing human and economic rights and controlling citizens in brutal fashion.

This is why leaders like ousted Tunisian President Zine El Abidine Ben Ali and Egypt’s President Hosni Mubarak do not remain in power. People will only tolerate so much before they take to the streets. What is happening in Egypt and Tunisia are consumer-citizens demanding the same economic opportunities afforded to a handful of people in their country and the chance to enjoy the fruits of their labor. Certainly, that is a fair demand.

No nation’s leadership can suppress the population forever and outlast the will of its people. This is why I believe there is still great economic hope for the people of Iran, North Korea, Libya, Myanmar, North Korea, Somalia, China, Sudan, Turkmenistan and Uzbekistan. As we have seen in Egypt, it only takes a few thousand people to ignite the flames of economic freedom and bring about significant constitutional change as well as new political leadership.

In this era of social networking and instant global communication, it’s not surprising that on a Friday afternoon, a handful of well-intentioned thought leaders tweet or Facebook their friends to rally in the main square and, by Sunday afternoon, ministers are resigning and corrupt leaders are making plans to flee the country.

Frankly, it’s consumerism at its best!

About the Author: Thomas Hinton is president of the American Consumer Council, a non-profit consumer education organization with over 107,000 members. He can be reached at

Friday, January 21, 2011

The Jobs Factor: Leadership is at the Core of Apple's Success

It's fascinating to observe the transformation taking place at Apple as co-founder and CEO Steve Jobs prepares to take another medical leave of absence. Given the fact that Apple stock is ranked second only to ExxonMobil in terms of its market value, there's much at stake as Jobs steps down albeit temporarily. Despite jobs' reassurance that he will remain engaged in major decisions, Apple stock has fluctuated mildly since his announcement. Analysts and stock strategists are obviously concerned about Apple's future without Steve Jobs, but so far, that concern is not stopping investors from purchasing Apple stock. Of greater concern to Apple are the millions of devoted Apple fans around the world who have come to rely on the company and its CEO as their compass for high-tech innovation and wizardry. So far, Apple's adoring fans are solidly behind the company and comfortable with Jobs' medical leave decision.

As one who teaches managers how to become better leaders, I'm intrigued by the "Jobs Factor" as I like to call it. There's no question that Steve Jobs is the face of Apple. As USA Today reported, during Jobs' second term as CEO, which began in August 1997, Apple's stock has soared more than 7,273% versus a 67% gain for Standard & Poor's 500-stock index. That's impressive whether you're an Apple fan or not! It's clear that as CEO, Jobs has inspired a rebirth at Apple leading to such innovative marvels as the iPod, iPhone, iPad, Apple Stores and the burgeoning industry knows as Apps – slang for Applications – that support all these new products. In short, Apple has transformed how a generation communicates, learns, listens to music and socializes. Steve Jobs continues to demonstrate his brilliance and his Midas touch.

Over the past 100 years, very few leaders have had as great an impact on transforming our world as Steve Jobs. Certainly Thomas Edison, Alfred Sloan (GM), Sam Walton (WalMart), Walt Disney, Bill Gates (Microsoft), Henry Ford, Thomas J. Watson (IBM), Ray Kroc (McDonalds), Estee Lauder, Richard Branson (Virgin), Philip H. Knight (Nike), Facebook founder Mark Zuckerberg and Jack Welch (GE) merit mention. In 2005, Fast Company published an outstanding list of the 100 Greatest Business Leaders of the 20th Century which included Steven P. Jobs at #26.

And so, as Steve Jobs prepares to step aside as CEO for medical reasons, the question behind the question is this. First, will Apple continue its rabid success once Steve Jobs steps down? Secondly, how does a company like Apple design a succession plan to ensure the company's continued success and growth? The second question is profoundly important when the CEO, Steve Jobs, is considered a god among his colleagues, competitors and the business media. The fact is that while Tim Cook can succeed him, no one can replace Steve Jobs.

While no one knows the answers to these key questions, I think Steve Jobs has a surprise in store for all of us. I think Jobs' greatest contribution to Apple will be revealed as he steps aside as CEO and allows Apple's senior leadership team to stand on its own. Remember, Steve Jobs has hired, trained and developed these people over the past 14 years. Jobs' goal has been to ensure Apple's profitability and product success will continue long after he is gone.

Interestingly, for Steve Jobs, this is not unchartered territory. When Jobs resigned as Apple CEO in September 1985 after a bitter confrontation with his board of directors, he was succeeded by a series of less-than-successful CEOs. During Jobs' 12-year absence from Apple, he had time to reflect on his successes and mistakes as a leader, innovator and business strategist. One of the mistakes Jobs acknowledged and vowed not to repeat was hiring the wrong people to lead the largest (and greatest) technology company in the world.

Now, Steve Jobs can step aside knowing he has in place a solid executive management team with capable leaders like Chief Operating Officer Tim Cook and Chief Financial Officer Peter Oppenheimer. These leaders have been schooled in how Jobs thinks and fosters creativity and innovation at Apple. They embrace the Apple culture and will maintain its current course to greater successes. Despite the concerns that Steve Jobs' temporary departure from Apple is causing to Wall Street and the business media, I am confident that Apple will continue to outperform its competition because Steve Jobs has learned how to create a culture of excellence and innovation that now permeates all levels of the world's greatest tech company.

About the Author: Tom Hinton is president and CEO of the American Consumer Council. The author of four books, Mr. Hinton is a popular speaker at corporate and association meetings on Leadership, Customer Service and Creating a Culture of Excellence in the Workplace. For information, contact: