If you’ve been reading ELYM for any length of time you’ll know I’m a big fan of credit unions. I use one for all of my banking needs and have always been 110% happy with it. As I’ve been reading about all the drama with many commercial banks and lending institutions I started to wonder how my credit union was doing. All I needed to do was wander on over to their website to see a letter from the vice president of the credit union. Here is an excerpt from the letter:
Many financial institutions are experiencing very high credit losses from making subprime or "exotic" mortgages (often referred to as "negative amortization" or "Alt A" mortgages). We have never offered those products, which we believe aren’t the right solutions for our members and have contributed to high losses at other institutions. Additionally, we, like all credit unions, are significantly restricted to the types of investments that can be purchased and the financial transactions we can enter. We know it is our members’ money we are investing—and we proceed with the utmost caution in every case.
Over 90% of the deposits that are held here are dispersed as loans to members—the true purpose of a credit union. Our responsible and sound lending guidelines allow us to remain in a healthy position and continue to offer highly competitive deposit and loan rates.
I guess my conservative financial perspective is a good fit for a credit union like mine. I can’t say enough good things about credit unions. Given the choice, why would you want to put your money in an institution who’s main goal is to generate profit for it’s shareholders? I’d much rather put my money somewhere that is solely in existence to create value for it’s members. I’m getting top rates for my deposits and have access to some of the most competitive loan rates if I need a loan. On top of that, the fees that my credit union charge me (I’ve actually never been charged a fee from them) are much lower than commercial banks. For my family, a credit union is the right choice. With more recent laws, pretty much anyone can join a credit union. If you have one in your area, it might be worth a look.
Grace says
I’m with you when it comes to credit unions. I joined mine 10 years ago, primarily to get a good rate on a car loan. But over time, more and more of my banking business has moved to it. Just last week, their credit card (which I stopped charging on a couple of years ago and had been faithfully paying off) offered me no-fee balance transfers with a 1.99% interest rate for 12 months. I immediately consolidated two of my other credit card bills onto the credit union VISA. I’m keeping my primary checking account at a major bank just so I’ve got money at more than one institution, but if mine is any example, credit unions are great.
John says
I don’t feel like I have anything to worry about with my Credit union either. I used to have a checking account with Wachovia before and with the trouble they are having I am glad to be done with them.
On top of that my Credit union is offering 5% interest on their checking account. A lot better than the no interest checking from most banks.
trip says
I really don’t think anyone is immune from this. People thought the S&L’s were safe too.
On another note, I just bought some Citigroup.