Friday, August 17, 2012

Small Business Series 5: Choosing Credit Unions over Banks

Since 2008, we have been awash in news revealing the greed, reckless investing, fees, and foreclosure fraud (and brutality) engaged in by America’s largest banks: The Bank of America, Citibank, J P Morgan Chase, Wells Fargo, and other multi-state and multi-national banking powerhouses.   Each received bailouts from Washington politicians of both parties – bailouts that were given, supposedly, because they were “too big to fail.” Many people feel like they have no choice but to complain about and accept what they can not change.
But we don’t have to be treated as serfs by these banks.  There are several solutions, including breaking up the largest banks, and separating investment and lending activities – but politicians have thus far proven reluctant to touch these.  
One solution lies squarely in the hands of the American citizens: A transfer by average Americans of their money out of the banks, and into credit unions.
I began using a credit union years ago in New Hampshire ( The Cheshire County Federal Credit Union ), and will never go back to banks again. Having moved to Massachusetts, I look forward to my new account at   Freedom Credit Union. At credit unions, I get better rates, and fewer and lower fees; the tellers know my name the moment I walk in the door; the service is personal; and my money stays in my local community, which increases economic development and creates local jobs.
Credit Unions function as banks, but they are non-profit institutions, so they do not answer to shareholders; rather, they are run by, and answer to, their depositors.  They generally provide the same services as banks: savings accounts, checking accounts, debit cards, credit cards, loans, direct deposit of paycheck, online account management and bill pay features. When I was concerned about my ability to use my credit union debit card when traveling to New York City, not only did i find that it worked in every store and ATM I used, I also was able to use a network of over 100 ATM machines in Manhattan (80 operated by Actor's Federal Credit Union) with NO FEE! 

When you choose a Credit Union, you are investing in your neighborhood and Main Street - not providing cash for a gamble on Wall Street hedge funds or fee-based mortgages that are bundled and sold off to another financial investment firm.  In 2008, Wall Street’s corporate banks demanded a bailout of $700 billion…and while the size of these Wall Street “Banksters” threatens our economic system, their size has actually increased since we bailed them out. According to FDIC data, the largest 5 banks held only 13% of US deposits in 1994; today they hold 38%. If the government won’t step in and apply Antitrust statutes to the Banking Industry and break them up, then we can do it ourselves and end ”Too Big To Fail” once and for all.

Changing financial institutions is not a one-step, or an easy one, but it is worthwhile.

1) Research your local credit union options. Find one here:
USA Credit Unions
2) Then, open an account with the one that best suits your needs.
3) Cancel all automatic withdrawals & deposits from your old bank
4) Transfer your funds to the new account, keeping some cash available until your new checks and debit card come through
5) Follow your bank's procedures to close your account.

Start NOW
, because between your debit card, credit cards, direct deposit of paychecks, and automatic bill pay, the banking world has you practically captive, and it will take a little time to get out from under their grip. But you can take pride when you invest in your community, and restore the 'human' element to your financial transactions.


1 comment:

Some Teacher said...

There are a few (very few) other options. There are still a few mutual banks out there. As a former member of the military, I belong to a service members mutual called USAA. The organization started as a mutual insurance company and has expanded to include banking. On the whole, I concur with your assessment of banks.