Is It Time to Move Your Money?

Happy move your money day!

That's what thousands of people are calling this Saturday, Nov. 5, when they plan to transfer deposits from large national banks to local credit unions.

The "move your money" movement has been around for years, but lately it's really picked up steam as Wall Street has been put under the spotlight once again thanks to proposals for new fees, the ongoing foreclosure scandal, and the Occupy movement.

According to the Credit Union Association of America, 650,000 people have opened accounts at credit unions since Sept. 29, when Bank of America (NYSE: BAC) announced a new $5 monthly debit card fee. (In response to widespread public outrage, B of A, JPMorgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC), Regions Financial (NYSE: RF), and SunTrust (NYSE: STI) have all backed down from charging their customers debit fees.) Over that time period, credit unions have received $4.5 billion in new deposits.

Credit unions are member-owned, not-for-profit financial institutions. They often provide more personal service, better rates on deposits, and cheaper loans.

What will happen this weekend? Who knows. But we could be looking at more than 100,000 additional people moving their money. Banxodus has already collected 52,000 "pledges" from bank customers to move their money (nearly half of which are customers of B of A). The website uses crowd-sourced research to help users locate "good-guy" banks and credit unions in their area. Another site, findacreditunion.com, offers to help users find a nearby credit union that "puts people first."

Of course, credit unions are excited about all these new members. But banks aren't exactly sweating the movement just yet. As my Foolish colleague Morgan Housel noted yesterday, deposits are at an all-time high -- $10 trillion.

The largest four banks are absolutely inundated with deposits:

Source: S&P Capital IQ.

$1 trillion is really more than anyone can spend. Especially today, when banks don't see attractive lending opportunities, excess deposits just cost higher overhead and FDIC insurance fees. Bank of New York Mellon (NYSE: BK) actually started charging institutions a fee to accept their money, while US Bancorp (NYSE: USB) and JPMorgan charge small businesses a portion of their FDIC insurance premiums.

For this to really hurt the banks, you'd have to see customers leaving on an even larger scale, or big institutions joining in. A number of municipalities, many burned by banks in the past, others under pressure from their constituents, are considering divesting.

But "move your money" isn't just about getting back at the banks. I visited Occupy DC to talk to people who have moved their money or plan on doing so tomorrow. Many people just don't want to be associated with the national banks, feeling that Wall Street broke the law, blew up the economy, got bailed out, and then ripped off their customers. And they're voting with their feet.

Here's some of what they told me:

The huge banks are taking their customers' money with hidden charges. Why should I put my money with the kind of bank that will just lend it all to people who they know can't afford to pay it back? I don't want to be a part of that cycle of ripping us off little by little.

I don't want to give banks my money just so they can go speculating with it.

I used to work for Wells Fargo before being laid off during the same quarter it posted a 21% increase in quarterly profits to $3.4 billion. Banks make decisions on their behalf instead of ours. I want to invest in credit unions that are a part of our communities.

Since the repeal of Glass-Steagall, banks have the capacity to use federally insured deposits to engage in investment banking, market-making, and proprietary trading (once they poke 100 holes in the Volcker Rule).

Most of the commercial banks got bailed out. It's like buying a Chevy or a GM (NYSE: GM) car – I don't want to support a company that was reckless.

I don't want them to be too big to fail anymore.

What do you think? Please use the comments section below to let us know.