Survey Underscores The Credit Union Difference

August 14, 2012 at 7:31 am Leave a comment

There’s a lot that financial institutions wouldn’t want to repeat about the last five years, but they have accomplished at least one good thing for credit unions.  Simply put, consumers can clearly see the way in which credit union philosophy differs from banks and how that philosophy impacts their wallets.  The latest example comes from Bankrate.com’s 2012 survey of credit union checking accounts, which found that 72% of credit unions offer free checking accounts compared to 45% of banks.  The survey further points out that the fees charged by credit unions for account services such as overdraft protection tend to also be cheaper than their banking counterparts. 

Why the difference?  To be fair, as an analyst pointed out to Bankrate.com, larger banks were hit with the Durbin Amendment, which sent them scrambling to find additional revenue.  But what also is going on here is the growing divergence of the two financial models.    Credit unions are completely dependent for their long term survival on membership growth.  As I have pointed out in a previous blog, banks have made it quite clear that there are certain customers they simply don’t want if they don’t have $100,000 in savings to bring to the table.  It’s not a coincidence then that bank transfer day trends have continued.  Keep in mind that one of the primary purposes of the credit union mandate is to provide consumers with alternatives to for-profit banking institutions.  This is a trend to be proud of and one we should be quick to point out any time banks argue that we don’t serve our purpose.

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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