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.
Huff TV: ABC News Profiles Move Your Money (VIDEO)
Huff TV: Arianna: Move Your Money And Make Too-Big-To-Fail Banks Smaller (VIDEO)
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!!!
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...
... oh: and corporates are owned by the credit unions they serve (just like credit unions are owned by the people they serve).
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!
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!
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.
L
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.
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!