Despite the Move Your Money advocacy of recent months, I'm amazed at how many friends don't know the benefits of banking with credit unions. Joining a credit union is easy and open to almost everyone. Credit union membership helps shield the community from powerful commercial banks now hoarding our money after a decade of gambling with it. For most of us, it's in our public and self-interest to transfer savings and checking accounts from big national banks to local credit unions--first thing tomorrow.
Unlike big commercial banks, credit unions came through the 2008 meltdown relatively unscathed and never required taxpayer bailouts. Credit unions didn't suffer from vast holdings of junk debt because they didn't issue bad loans during the easy-money, predatory financial climate of the Bush years. Born during another great financial crisis, the first credit unions were formed in the 1930s as member-owned cooperatives. Today, in a similar time of public rescue and clean up after private banks' failure and toxic profiteering, credit unions fulfill the same mission: to help people save and borrow locally at competitive rates from people they knew.
Best of all, moving our money to a credit union is no sacrifice. After the minutes it takes to open an account, we help ourselves with an array of free credit union conveniences and benefits:
*Full-service branch banking, including free and interest-earning checking accounts, competitive rates ("dividends") on personal loans, savings, IRAs, and certificates of deposit.
*All deposits federally insured up to $250,000, same as commercial banks.
*An array of free services to members, ATM's, drive-up windows, notary public and on-line resources.
*Credit-union networks function as a statewide and national branch bank, allowing withdrawals and deposits to virtually any other credit union, without hassle or charges. If you belong to one, you can use the services of all.
*The full complement of bank loan services, including personal loans and mortgages. Some larger credit unions also offer business loans and accounts.
*Free financial education workshops on popular topics such as budgeting, wills, home buying, retirement investment and small business issues.
*Refunds on ATM charges when using your credit union debit card at any commercial bank. Amazingly, this often includes full refunds on international ATM fees from foreign banks.
*Being 18 and over, with two forms of ID, and with a start-up savings deposit of $25, anyone can become a credit union member (not a mere customer).
In that inclusive spirit, credit unions represent community democracy in action. They're one kind of institution where money and self-interest truly intersect with fellow-feeling and the common good. Unlike the big banks, which exist only to enrich owners, shareholders and CEOs, credit unions are non-profit, run by citizen boards--community volunteers, elected and answerable to other members. Unlike the trustees of big banks, citizen boards feel no pressure to issue sketchy loans to unqualified borrowers or pad the bonuses of insanely rich executives. Nor do they withhold credit to fully eligible customers during the very recessions they cause. Credit unions exist, unbelievably, only to serve their members. Us.
Still don't believe it? Check out a credit union staff parking lot. Often the loan officers and directors drive the same well-used Subarus and Chevys we do; they live in our neighborhoods, have kids in our schools, gripe about the same price hikes at the supermarket and gas pump. If we all transfer our collective wealth to our local credit unions, we will not only be well served while paying and/or earning equitable interest rates, we will help our neighbors. When we make a deposit at our credit union, we won't be helping some big-bank CEO buy his or her sixth "second home" in Aspen. Our savings will finance Fred and Ethel's new windows, Alice's new restaurant, Bart's first car, and Lisa's college tuition.
Another benefit of credit union membership grows from dealing with a service-oriented staff in a healthy, not-for-profit environment. In years of dealings, both as a borrower and saver, I've found the fellow members who work behind the desk or kiosk to be unfailingly helpful, kindly, and honest. In a recent conversation with a young service rep at my credit union, I learned that she'd started her career at a huge, national commercial bank. Much happier at the credit union, she first noticed the lack of pressure to persuade customers to move into loans or savings accounts more beneficial to the bank than the client. She also detailed how the work atmosphere seemed far less determined by a boss's mood, personality, or power plays while being far more equitable and cooperative. The young rep and I wracked our brains for the downside of credit unions versus commercial banks, and could only come up with most credit unions' lack of capacity to make large-scale business loans. "This sound just too utopian, isn't it?" she asked me.
But credit unions really are a kind of financial utopia. Best of all, as we reward ourselves, we will help bring positive community change without any need to lobby Congress, email Obama, or shoot darts at Wall Street and the Federal Reserve. In a climate of conservative incoherence, nilhism, and stubbornness, this social betterment will be immediate, doing good as fast as we can move our money to credit unions. Instead of merely cursing and sticking up rude fingers when we pass our former big commercial bank, we can smile in self-satisfaction at all the good we're doing for ourselves and our neighbors--with interest.