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Bank Transfer Day Creates Surge of Business for Credit Unions

A national effort to fight big banks led thousands of Kentuckians to move their money over the last month.

The Bank Transfer Day movement encouraged Americans to withdraw their money from institutions such as JP Morgan Chase and Bank of America and put it in locally-owned banks or not-for-profit credit unions.

The movement was driven by frustration with the announcement that several large banks would charge customers for using debit cards. It combined with the existing anger about banks’ role in the financial crisis and gained the support of many Occupy Wall Street protesters.

The official day for the transfers was advertised as November 5th, but participants began withdrawing in the month prior. The Credit Union National Association reported Monday that 80 percent of credit unions saw an increase in membership in the last month. About 650,000 new customers signed up for accounts and transferred $4.5 billion.

“We’ve never been able to really break out into the common ideas or mainstream. Maybe this is it. Maybe we’ve been able to do it this time,” says Credit Union National Association spokesman Pat Keefe. 

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Many Kentucky Banks Unharmed

Conservative business practices have protected most Kentucky banks from being damaged by the Wall Street financial crisis. That means they’re able and willing to extend credit to eligible customers.

When high risk mortgages became more common nationwide, Kentucky banks generally avoided the trend. Kentucky Bankers Association General Counsel Debra Stamper says the current financial crisis caused by risky loans hasn’t changed the way banks do business in the Commonwealth.

“As I understand it from talking to banks, they have not significantly tightened or changed their underwriting standards for loans, which means if you were a good credit risk for them two years ago, you’d be a good credit risk for them now and they’d be happy to make you a loan,” she says.

But Stamper says further fiscal downturns could hurt consumer confidence and, in the worst case, cause runs on banks.

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Habitat For Humanity Could House Foreclosed Families

Habitat for Humanity of Metro Louisville celebrated a milestone Thursday. But as the group’s work has been broadened in response to the mortgage crisis.

After celebrating the construction of Habitat’s 300th home in Louisville, Executive Director Rob Locke said the group may soon get some new clients.

“It’s certainly possible that families who have lost their homes due to foreclosure are eligible to buy habitat homes,” he says. “To buy a habitat home you have to need it and you have to be able to afford it.”

The group has recently refurbished homes under foreclosure and donated by banks.

Locke says people who lost homes to foreclosure will qualify for Habitat homes once they rebuild their credit. Habitat for Humanity offers eligible families zero interest mortgages to purchase the dwellings.