Credit Unions are geared toward specific member needs
The news lately seems to be “all about credit unions” but what exactly makes a credit union so special and what should members look for before they join?
Weiss Ratings, an independent US financial institution ratings agency said that the country’s credit unions boosted deposits by 5.2% last year and experienced an overall increase of 29.6% in deposits before the financial crisis erupted in 2007.
"Credit unions have enjoyed renewed interest from consumers who are shunning banks and the plethora of new fees that have been imposed on many traditional banking services," said Gene Kirsch, Weiss Ratings senior financial analyst in April.
Weiss identified some of the stronger players in the market based on overall health rating, deposit, loan and profit growth. Navy Federal Credit Union ($47 billion, Vienna VA) was considered to be among the top.
No Longer Your Grandmother’s Credit Union
Nancy DeDona, VP/Membership at Navy Federal Credit Union says that what makes credit unions special extends beyond low fees and exceptional rates. She explains that it’s the specialized, tailor made services that each, individual credit union delivers that distinguishes this financial institution entity from the banks.
“First of all it’s very important that consumers realize that credit unions today are vastly different than credit unions 25 or 50 years ago,” she explains “When most people think of a credit union they think of a small organization that was at their place of employment. In the past credit unions offered very basic services like savings, checking, personal loans and a custom club for Christmas.”
She says that today’s credit union is very comparable to a bank in terms of the breadth and wealth of products and services. “Most credit unions will now offer the same services you have come to expect from a bank. We have debit and credit cards, mortgage loans…anything you could get from a bank.”
However, while credit unions can offer the same robust line of products, services and technology as banks they provide explicit specialties that transcend beyond the banking world.
DeDona explains that nearly every credit union has products and services geared specifically to their member’s needs. She points to some of the smaller credit unions as examples.
“For example, if you are a new New York City cab driver there is a credit union that specializes in the providing loans for the medallion that must be purchased in order to operate that cab. Cab drivers would have a problem trying to obtain a similar loan from a bank off the street, but luckily they can turn to their credit union.”
In the case of Navy Federal, DeDona says that the credit union is designed around its members’ needs as well.
“Because our purpose is to serve the military we have branches around the globe, a large ATM network and also have a slew of ATM partners,” she says. “I love my job because we serve our military, we speak their language, employ their spouses and understand that when our members are deployed, we can suggest actions they need to take like power of attorney or identity protection. We want to do what we can to reduce their concerns and serve their needs.”
Your Credit Union Should Save You Time and Money
Sonya McDonald, SVP/Planning and Market Development at Randolph-Brooks Federal Credit Union ($5 billion, Live Oak, TX) says that a credit union should fulfill three specific criteria for the member. “Overall, a credit union should be able to help its members save time, save money and earn money. Keep these three criteria in mind as you look for the financial institution that can save you the most and make life easier.”
She points out that rates and fees are still a huge differentiator when it comes to comparing banks and credit unions. “Rates and fees are one of the big differentiators in the marketplace,” she says. “Typically, credit unions are able to charge lower fees and offer better rates on their products and services.”
DeDona adds that credit union loan rates are capped, which makes getting that home or auto loan considerably less expensive. “Credit union loan interest rates are capped at 18%, which is especially important to those sailors who return from duty and want to buy a new car,” DeDona says. “If they went to a bank for a loan they could be charged 36% or beyond, which allows them to afford a lot less car than if they went to their credit union.”
McDonald echoes the sentiment DeDona expressed about how a credit union can speak directly to specific needs. “Consider how the financial institution’s offerings fit your needs. For example, you should look for convenient opportunities to conduct your business, including a well-designed branch network in your area and convenient mobile and online account access. As credit unions continue to improve their technological offerings, you may be able to conduct all your business, including check deposits and loan applications, remotely.”
“If you have a special need, do some online research to make sure your new financial institution can meet it,” she continues. “Whether you’re looking for a credit card that offers rewards or capital for a small business, spending a little time on a potential credit union’s website can help you identify the options available and how they fit your needs.”
Nathan Muniz, Public Relations Manager at Pennsylvania State Employees Credit Union ($3.98 billion, Harrisburg, PA) adds that credit union membership takes financial servicing to an entirely different level. “It’s a completely different mindset with a credit union. For instance, when everything was happening with Dodd Frank and the overdraft regulations, we weren’t worried because we didn’t have to really change anything. It’s because of our philosophy. Credit unions are service organizations--that’s why we exist. Our members are our owners and we don’t see dollar signs when we have contact with our members.”
Switching Is Easy
McDonald says that one hurdle many credit unions and financial institutions in general face is switching from one institution to another. She stresses that switching to a credit union may not be as difficult as prospective members may think.
“It’s easier to join a credit union than you might think,” she says. “Switching accounts from one institution to another was once a headache, but with today’s technology, moving your money can take a matter of minutes. It’s also easier to join a credit union because you may more easily qualify for membership than in previous years. For example, at RBFCU, we offer more than 2,000 ways for members to join, including options based on where they live, work, worship or attend school. With online qualification options at many credit unions, you can easily discover and join a credit union from the comfort of your own home.”
Find a credit union that offers the right products and services that speak to your particular needs today.