Now is the time to get the following type of message out to your members, the media and your elected representatives. Please help.   

 

Now is the time for consumers to look at credit unions for financial services.  Unlike banks, credit unions do not have the pressures of meeting quarterly profits goals.  Credit unions can use their earnings to offset the cost of their services to their members.  Banks complain that credit unions have an unfair advantage because they are not taxed.  Credit unions are not taxed but that is because credit unions are organized on a non-profit cooperative basis.  Unlike banks, most credit union directors are not paid and credit union staff salaries are typically below those of bank staff. Credit unions do not have stock ownership, so credit union officers and directors do not have a financial incentive to maximize profits.  Bank management has to answer to shareholders.  Credit union management answers only to the credit union members.  That is the real reason why credit unions have more favorable pricing.

 

In these troubling times when the banking industry is receiving billions and billions of dollars to bail them out of bad debt, not a dime is going to bail out credit unions which remain as the most well capitalized financial institution sector, even without the bail out money.  Many credit unions provide a wide range of lending products, including mortgage loans and small business loans.  The deposits in credit unions are insured by a federal agency, the National Credit Union Administration, at the same level and upon the same terms as the FDIC insures bank deposits (currently at $250,000). 

 

We now see that having a robust non-profit cooperative financial institution sector alternative is a very valuable hedge to the market excesses that seem to periodically infect the for-profit bank sector.  There is a place for both profit and non-profit financial institutions and the consumer benefits by having a choice.