Financially Savvy Consumers Prefer Credit Unions Over Banks
By Gina Ragusa Published July 29, 2013 Credit Unions Online
Results from the recent American Banking Preference Poll revealed that Americans love their credit union, but also their community bank.
GoBankingRates.com posted a survey through Google Consumer Surveys asking which financial institution the reader preferred--community bank, national bank or credit union.
Two sets of consumers were polled--those from a subset of readers who visited a number of general news, arts & entertainment and reference websites and another group who answered the question on GoBankingRates.com and its financial partner websites.
Consumers who answered the question on one of the general news sources were partial to community banks (41.2%). Credit unions ran a close second at 34.4% with national banks ranked last at 22.9% (1.5% chose “other”). The poll ran from June 12 through July 11, 2013.
However, when GoBankingRates.com examined responses garnered from its own and partner sites, results favored credit unions. In fact the overwhelming majority, 73.76% sided with credit unions, followed by 14.18% for community banks with national banks bringing up the rear with 9.93% (2.13% of the responses were “other”).
Both credit union and community bank industry experts touted the results. “It is no surprise to me that community banks would be chosen as the most popular type of financial institution,” Andrew Howard, publisher and managing editor of CBInsight.com said to GoBankingRates.com. “Community banks typically always have a strong leadership presence in their communities, along with local decision-making authority. There will always be a strong demand for community banks within our financial system, and the results from this survey show that.”
Paul Gentile, executive vice president /strategic communications and engagement for CUNA.org told GoBankingRates.com, “For users of financial services, it’s all about trust — and the credit union model, as a cooperative operating on a not-for-profit basis with no shareholders — engenders the trust among consumers and small business owners.”
What Do the Results Mean?
GoBankingRates.com pointed out that responses from the survey that favored credit unions were provided by people who answered the poll on an online financial journal or publication pertaining to banking and finance, whereas the survey that favored community banking was procured from mainstream, general publications.
Other information of interest with regard to the general Google Consumer Survey includes:
The group that preferred community banks were 65 or older women, living in the Midwest.
Both men and women favored credit unions, between the ages of 34 and 44, residing in the West. Average income was within the $100,000 to 149,999 range.
More men with an income between $75,000 to $99,000 preferred national banks. Many live in the Northeast and are men between the ages of 18 to 24.
Some conclusions that can be drawn were provided to GoBankingRates.com by financial planner, Xavier Epps, owner of XNE Financial Advising LLC. He explained that the younger generation may still value “big brands and well known companies” that offer something for free (such as earning money for opening an account). He said Millennials, in particular identify with a brand they see and encounter often such as Bank of America or Wells Fargo. “They gravitate to national banks because they crave convenience, like more ATM and banking locations, as well as value the brand over the quality of service provided or products offered,” he said.
Other groups have already developed a loyalty to a particular financial institution and prefer customer service over giveaways. “The older the Boomer, the more they’ve likely heard from parents or relatives to not save with banks in the first place due to the negative connotation of the banking industry post-Great Recession,” Epps said.
Credit Union Service Speaks Volumes
For those who favor service over all, a recent story about an alert Community America Credit Union ($1.8 billion, Overland Park, KS) illustrates why credit unions are a favorite.
When employee Mary Weiss’ 85 year-old member seemed to be in the middle of a horrible extortion scam, Weiss was quick to tell the member she should not withdraw her money to give to someone who was meeting her at home.
“She first came in in the morning and said that she was going to be receiving a big sum of money, and she needed some money,” Weiss told Fox4KC. “I said ‘that’s a scam, it’s not going to work.’”
However the member not only withdrew money then, she returned later in the day, in need of additional funds. The member told Weiss she needed to withdraw more money so she could claim her $7 million cash prize and luxury car in exchange for her cash.
At that point Weiss and another co-worker could no longer stand by and watch this happen. The credit union called the police who intervened before the member could hand over her money.
“I was scared for her. We were all scared for her,” Weiss said.