The Little Banks That Can
:::::::::::: Personal Finance ::::::::::::
Anger at big banks has prompted calls for consumers
to move their money. But where will you get the best terms?
It’s time to check out your local credit unions By L YNN BRENNER
Here’s how bad it’s gotten for
bankers: they’re less popular
than politicians, according
to a recent Zogby Interactive survey. And no wonder.
After receiving a huge bailout to escape a debacle of
their own making, America’s
biggest banks raised their
fees, posted record profits,
and paid enormous bonuses
to their executives. Meanwhile,
most of us are still struggling
to regain our footing. Unemployment hovers around 10 percent—and
although the bailout was supposed to
help get credit flowing, banks still are
not lending to the small businesses
whose recovery is vital to creating
jobs. “We need a citizens’ intervention
to reform our financial institutions,”
says pundit Arianna Huffington. Late
last year she launched Move Your
Money, a campaign that urges Americans to shift their accounts to community banks and credit unions.
Some of us are responding: 9 percent
of those polled by Zogby say they’ve
taken some business away from banks,
in protest. Moral outrage aside, there
are always three compelling reasons to
switch banks: lower fees, higher interest on deposits, and better service. As it
turns out, you are likely to find all three
at some of the smallest financial institutions in the nation: credit unions.
“The average consumer does much
better at a credit union than at a bank,”
says Ed Mierzwinski, consumer pro-
gram director for the U.S. Public Inter-
est Research Group. “Credit unions
have lower requirements for waiving
fees, offer better deals on car loans, and
are generally more flexible in respond-
ing to customers’ problems.”
Everybody’s Eligible
The 7,700 credit unions in the United
States are nonprofit cooperatives; they
exist to serve their 92 million mem-
bers. Yet after more than a century,
credit unions are still the best-kept
secret in banking—partly because,
unlike banks, they don’t spend much
money on advertising.
