Consumers Are Moving Their Money to Credit Unions, Rising Membership Shows

Make a New Year's resolution to move your money out of big banks? To that I say: Right on! Without question, financial consumers are angry at -- and have lost their loyalty to -- big banks. Late-night comics routinely make fun of the banks; there's even a new iPhone app in which players try to stop "cash-hungry" bankers from wheedling more bailout money from the U.S. Treasury, according to a recent report in American Banker newspaper.

But if consumers do indeed move their money out of big banks, they would be well advised to look not only at community banks, but at the nation's credit unions. In fact, consumers are already voting with their wallets in favor of credit unions. The data collected by my organization, (the Credit Union National Association -- the industry's trade group) shows that credit unions are on pace to post 2% membership growth in 2009. This is the fastest rate we have seen since 2001 and double the rate of U.S. population growth, bringing total credit union membership to nearly 93 million Americans. We think disenchantment with banks explains at least part -- and probably a large part -- of that growth in new members.

For consumers, the move makes perfect sense. Credit unions are not-for-profit cooperatives, and they're owned by their members. They offer the same products and services banks do, but unlike banks, credit unions exist only to serve their members -- not to generate profits for outside investors. Members typically experience that difference in the form of better rates and lower fees. In 2008 (the latest data we have available), consumers saved $9.2 billion by using credit unions rather than banks, or the equivalent of $104 per member and $198 per family. And that's just on average. Loyal members -- those who use credit unions extensively -- often receive total financial benefits that are much greater than the average.

But the issue goes beyond dollars and cents. In this turbulent economy, credit unions' cooperative business model has renewed relevance for American consumers. Chairman Barney Frank (D-MA) of the House Financial Services Committee has said if other financial institutions behaved liked credit unions and small community banks, the mortgage meltdown would never have happened.

You can't join just any credit union. Each credit union has its own specific field of membership centered primarily on where people work or live. But we're quite confident everyone can find one or more credit unions he or she is eligible to join; the locator tool on CUNA's consumer web site may help.

The time is right for consumers to resolve to move their money. We happen to think the best destination is a credit union -- as millions who have already gone there will attest.

Pledge to Move Your Money!

Take the pledge, join the movement, and invite your Facebook or Twitter friends to get involved.

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Comments

[Gary Causer]

08:47 PM on 01/10/2010

I just got a$ 9000 car loan for a 6 year old car at my credit union. Took 15 minutes. (I like to visit).

The loan officer has made me three loans last year. This one took the longest. (had to look up blue book value to make sure I was getting a good buy). Don't listen the bank apologists on this site and take control of your money. credit unions rock!!!

[moramc]

07:15 PM on 01/10/2010

This is a gret idea. Only problem is that for some of us; it's not an option. Directly after moving to my new city following my foreclosur­e, I went to our local credit union. I had a considerab­le deposit from having held a 3 week long yard sale of all our belongs. I wasn't allowed to apply. Once I stated that we had been foreclosed on, though a consent agreement was signed in court and there was no eviction, the credit union told me that they did not have my kind as members. They weren't polite, kind, or sympatheti­c, and appeared outwardly dismissive­. So, my funds were deposited at Bank of America. Unfortunat­ely. I held my nose because I needed a financial institutio­n to operate from and neither the one small local bank nor the credit union would have me.

[Hazumu]

01:36 PM on 01/10/2010

I'm a member of a credit union, and have been since the '80s.

BUT--

I have one big rhetorical question.

Where do credit unions go to get their banking services?

See, they're like health insurance -- pooling small savers' assets and then negotiatin­g a better deal with the real service provider: in the case of health, a health service provider such as Sutter Health; and in the case of financial services, often a big bank such as Chase of BofA.

Don't get me wrong, Credit Unions are good things, but most credit union members don't know who their Credit Union does their commercial banking with. Your small credit union could be using your assets to de facto support a too-big-to­-fail institutio­n.

Do ask them the question..­.

[Patrick Keefe]

04:47 PM on 01/12/2010

To answer your question: Typically, credit unions do their "banking" (as it were) with corporate credit unions (credit unions for credit unions). These include transactio­n services, overnight investment­s, etc. In some cases, credit unions use services offered by the Federal Reserve, but corporate credit unions are typically the place where credit unions take their business.

... oh: and corporates are owned by the credit unions they serve (just like credit unions are owned by the people they serve).

[choctawwritergirl]

01:28 PM on 01/10/2010

I wrote about the benefits of using CREDIT UNIONS earlier -- benefits much better than banks.

Your money is guaranteed by FDIC. If you live in Dallas, Carrollton Texas area my recommenda­tion is:

TEXAS CREDIT UNION

Easy to joing and great perks -- just like the big banks with less fees or no fees!

[Ann Mikkelsen]

02:39 AM on 01/09/2010

I love Teacher Federal Credit Union in the Twin Cities. I don't like the new name, Trustone, but I can never imagine moving my money. I've been with them at least 25 years.

[alyseven]

10:53 PM on 01/08/2010

If credit unions are subject to even LESS regulation than the large banks, there is no way in hell I'm moving my money (not that I have much to move.) I canceled my Chase account years ago and stopped using credit cards (except for the occasional store card and my bank debit card) and the truth is, I don't trust any of them. I like my bank now (TD Bank). I got one fee for $15 that was unexplaine­d on my statement. When I emailed them and asked, they said there was a day my account fell below the minimum balance, but they refunded the fee right away. In 4 years, that is the only glitch I've ever had with them. I have never been charged one fee. I'll stick with them,

[Patrick Keefe]

04:50 PM on 01/12/2010

Actually, credit unions are just as highly regulated as banks (in fact, the U.S. Treasury Department found in a study of credit unions at the end of the 1990s that credit unions are the most highly regulated of all depository institutio­ns). However, credit union regulation is different in some respects: Credit unions are cooperativ­es (unlike stock-held banks) and, in that sense, must have a different regulatory scheme. Neverthele­ss, it is just as rigorous (if not more so) as banks face.

[scarletred]

05:03 PM on 01/08/2010

The best thing I ever did was close my account with Columbia Credit Union in Washington State and went back to GECU in Texas. I am a Washington­ian who thought that it may be in my best interest to open a local credit union account to make deposits more timely -- outside of my weekly direct deposits that are already made. I was wrong. Columbia Credit Union was a complete nightmare. I repeatedly experience­d inaccurate account reporting, constant bank errors, ridiculous fees, and extremely poor customer service. They are quick to assess "pending" debit transactio­ns, but not "pending" deposits. Their deceitful VISA debit card system is set-up so that all "credit" transactio­ns that you make are actually executed as "debit" transactio­ns. I was charged an overdraft fee of $28.00 for being .05 cents under the bank. I had to call and correct a $500.00 deposit Columbia said I made, but I didn't. Another transactio­n was successful­ly withdrawn from my account one day, then two days later, it was reimbursed to the account, only to be deducted again later that day.

I found Columbia CU lacking any credibilit­y in the financial arena. The constant bank errors, lack of customer service, illogical bank fees, and devious banking methods made me believe they lacked a strong customer base or the clout to expertly secure my monies. I would rather pay to mail any additional funds for deposit to GECU than deal with the incompeten­cy of Columbia Credit Union. GECU Rocks!

[toomuchtolose]

07:44 PM on 01/08/2010

scarletred

I was with a credit union for several years and liked it very much. Then when my job was moved to another city I went to the credit union to close my account. I was told I could not close the account for 60 days. I could take some money out but could not close the account. I had no outstandin­g checks and I had never used the credit card so there were no outstandin­g credit card balances. I was not happy about it but said I would be back after 60 days and I wanted the money I had in my account. On day 61 I was back at the credit union to close the account, and I was told I had to wait 60 days. I was very angry and we had a big argument and I asked to talk to a manager. I did get my money out, but I was very upset about the way the credit union handled it. I was glad I did not have some huge medical emergency where I desperatel­y needed the money, because they would not release it to me the first time and were going to do the same thing the second time. I hope things have changed.

[yourmomscalling]

04:34 AM on 01/08/2010

YES MOVE YOUR MONEY OUT OF BOFA OR CITI ANY OF THE BONUS BUCKS CROOKS !!!

[Pamela Clark]

03:24 AM on 01/08/2010

Grow Financial Credit Union - Tampa Florida - wonderful place, been with them now for almost 23 years - very pleased and have never even entertaine­d the thought of leaving.

[madatnewsmedia]

11:04 AM on 01/08/2010

I've been a member of Marine Federal Credit Union (Jaxville, NC, but other offices in VA) for over twenty years and I have no plans of going anywhere else unless it's another credit union. Folks, we have to wake up! The banks have done their best to screw us and we need to show them that we're not going to take it anymore!!

[MsLilyBe]

07:43 PM on 01/07/2010

When I was a 12 years old my Mother took me to get a savings account at what was at that time "Houston Area Teachers Credit Union" because that's where she had an account. Later I added a checking account. When I was a freshman in college I kept that account but opened a bank account in the college town I was living in. My Mom went to deposit some money into my acct so i could basically write a check to myself to move money from the credit union to the bank (oh how convoluted it all was). Anyway the the CU accidental­ly deposited the money into her acct rather than mine causing all sorts of checks to bounce all over east and north Texas. After realizing what they did they not only put the money plus overdraft fees back into my account. but reimbursed me for overdraft fees that the OTHER bank had charged me when checks there bounced as a result of the mess up AND they wrote letters to each of the stores I had written checks to that bounced to asking them to waive the fees as it was not my error. Ive been with that CU for over 20 years and 3 name changes, and have no intention of ever closing that acct.

L

[TaoJonz]

07:20 PM on 01/07/2010

I've moved my money. It's something we CAN do. Citizens shouldn't complain if they Are not prepared to Act.

[Bill Swadley]

06:40 PM on 01/07/2010

I've been with a credit union since the early 80s. Back then, they were indeed far superior to banks in almost every way, mainly because of tighter government regulation­s, but also because their size allowed for a more personal touch.

Over the past 10 years or so, however, mine has become as impersonal­, self-servi­ng, and greedy as any big bank. The last straw was at the end of last year when they raised their credit card interest rate a full 5% from the rate that it had maintained for over 15 years. My understand­ing is that most credit unions have taken similar actions so check yours.

I've since moved most of my money out of my credit union account and will be canceling the credit card with them shortly.

[Zeebob]

07:00 PM on 01/07/2010

Credit cards are not what caused this problem, what the big banks did with the saving and checking money of individual­s should have been criminal. I'm proud to be a member of a local credit union. No their not perfect, but neither are the banks. I also chose to no longer use a credit card with my union and favored one with a lower rate and a cash back program, I don't hold a debt on my credit cards so the cash back is to my advantage.

[weekendpartier]

08:39 PM on 01/07/2010

AND, what's more, if one goes to the credit union regulator'­s site, one will discover that credit unions can fail or be closed too! So ...

[MIKEinNYC]

06:20 PM on 01/07/2010

The way things are going it's just a matter of time before they get screwed up too.

[Revee]

06:24 PM on 01/07/2010

You may be right, in theory. However, when an institutio­n is not driven by profit, it would seem harder to screw up.

[MIKEinNYC]

06:46 PM on 01/07/2010

It's not the institutio­ns it's the people who run them.

[Revee]

06:11 PM on 01/07/2010

I have been using a CU for a year now and am really pleased.
I have a small business and I was pleasantly surprised when some large checks (20K) cleared in 2 days. My old bank would place holds anywhere from 4 to 10 days on large checks!

[finn48]

06:09 PM on 01/07/2010

Sorry. That was 'our Corporate Masters', not 'out Corporate Masters'. It pays to re-read what you have written.