CU’s Get Recognition from WSJ

Hi folks,

You’ve constantly heard me discuss why I think CU’s are a better way to bank. But it’s always nice when a big, well-known publication gives us all some good press, like in today’s Wall Street Journal. I like it, but there’s one point that I would disagree with…

http://online.wsj.com/article/SB121978460014474069.html?mod=googlenews_wsj

I agree that credit unions do offer some of the best rates and service members can find. I always claim that credit unions are America’s best kept secret. More and more credit unions have community charters as the number of large companies decrease and we have more small companies.

Since credit unions are financial cooperatives owned by the members, it is important for members to do much of their banking business with the credit union. They more they do with the credit union the better the credit union is able to offer good deal for their members. However, when members begin to cherry pick only the best deals at the credit union they tend to hurt their own financial cooperative. Why should a member have a checking account at a bank for them to make money instead of at the credit union along with the high earning money market account or certificate?  Why only have the low interest car loan at your credit union and the profitable checking account elsewhere?As a credit union professional for forty years, I want our members to have almost all of the business at the credit union. If they do that- then we are better able to offer the new products that consumers want today. Unlike the greedy bank, you refer to … we cannot raise capital by selling more shares of stock. We raise capital by setting aside a portion of the annual net income into our capital accounts. It is the capital we set aside that give us the funds to develop new products, open branches and meet the needs of our members.I liked the article and really believe that credit unions are very good for the consumers/members but I don’t want anyone to cherry pick us.

-Al

 

 

 

 

Advertisements

2 Responses

  1. Hi Al

    I think it’s nice that CU’s got reviewed in a national publication. I live in the area and belong to a local one-but only because I have my car loan with them-they had the best rate at the time. So I agree-it pays to shop around at CU’s because they do offer better rates.

    Though-my accounts are still at my bank. Maybe I’m guilty too-it’s just convenient-I’ve been there for years, they know me-it’s too hard to switch. I mean I’ve seen the big offers there-$200, gas cards-but none of that entices me-

    The thought of switching everything from checks to cards and more is just exhausting. And while I do like the credit union staff where my loan is-I guess I just have that level of comfort with my bank. I’m sure your members do too-

    The article did cause me to pause and think about the fees and rates that I receive. Perhaps I’ll take a closer look now, but I think it’s all about people’s comfort levels.

  2. Hi Gregg-

    Changing banks is indeed a challenging task. That’s why our member service associates help our members out. We have an electronic switch kit that makes moving the ACH item, payroll and bill payments, easy.

    We’ll do the work for you as will most credit unions and banks. The real reason most people change banks or credit unions is because of high fees or poor service.

    And yes, it was nice that credit unions got some national press. I just was not pleased with the “cherry picking” reference. If members cherry pick their credit union- then it will be hard for credit unions to provide those good rates and services.

    Credit unions need all members to have multiple products and services with them. That’s what makes it a successful financial cooperative. We all use numerous products, so the credit union can keep fees low and interest rates very attractive. If the member only uses the credit union for the high earning certificates and the low loan rates, the credit union would struggle.

    There are profitable accounts for the credit union that help us provide other benefits. The checking account is one our the main products. With direct deposit and a debit/check card, we are able to earn income to help develop new products and services.

    So if you not happy with the fees and services from your current bank, but like the way the credit union that has your car loan treats you, then do your self a favor and make the change.

    Remember the credit union motto is “not for profit, not for charity but for service”. It’s about people helping people.

    -Al

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: