posted: Apr. 23, 2003 @ 1:13p
NEW!3.75% 2/2 ARM as of 11/30/04 - Patelco Credit Union
NEW!5% 5 yr Insured CD @ Telcom Credit Union
CUs that anyone can join
Comparing benefits and services at CUs and banks
CU and Bank Accounts in Canada for US resident
* Pentagon FCU Car Loans
* CU Deposit Insurance
* S&P500 Index Market CD
* Digital FCU CDs
* CU CD Rates
* Patelco CU
* CDs in CUs/banks
* Boeing Employees CU
* Wire Transfer Pricing at Banks and CUs
* Pentagon Federal CU HELOCs
* CU approves the refi HELOC, we're going for it
* Bankrate: CUs move into the technological age - while keeping their member focus
* Bankrate:CUs lead the way in high-tech banking
* Credit Union Monthly Averages from Bankrate
Q 1. WHAT ARE CREDIT UNIONS?
CUs are NONPROFIT financial cooperatives. History of Credit Unions and NCUA CUs offer excellent consumer value due to: nonprofit tax-exempt status; small number of B&M branches; low-overhead operation; lending focus on individual consumers and small businesses rather than on corporate and international trade transactions. NCUA Frequently Asked Questions
Q 2. WHO CAN JOIN A CU?
CUs serve specific "Fields of Membership"(FOM): a company, an occupation, a church, or communities of persons who "live, work or worship" locally. The Federal Government's Access Across America campaign seeks to promote CU membership.
Q 3: HOW CAN I JOIN A CU?
You apply for membership based on qualifying in the CU's Field of Membership (FOM). CUs require that new members deposit a minimum "Share Savings" deposit (ranging from $5 to $50), and maintain that minimum deposit as long as they remain members. A few CUs charge an application fee, typically $5. See this CU Membership Discussion
Q 4: HOW DO I MAINTAIN A CU MEMBERSHIP OVER TIME?
Many CUs honor "Once A Member, Always a Member": as long as you maintain the minimum "Share Deposit" you retain full member privileges, even if you no longer live, work, or worship within the FOM.
However, a few company-sponsored CUs (where the company actively subsidizes the CU as an employee benefit) may restrict former employees from opening new CU accounts or taking new CU loans. Ask your particular CU about any such restrictions.
Q 5: HOW DO CREDIT UNIONS' AUTO LOAN RATES COMPARE?
For car loans, CUs often offer THE BEST overall rates and terms in the marketplace. See Credit Union Car Refinancing thread By financing through a CU instead of a dealership, you can take advantage of "cash rebate" programs which you would forfeit with dealer-offered "0% Financing". Many CUs will also "meet or beat" loan rates offered by competitors like PeopleFirst.com.
Used-vehicle rates at CUs tend to be particularly attractive. CUs also impose lower loan-transaction "fine print" fees and costs than most banks. CU loans are relatively customer-friendly, and you are unlikely to get stuck with "Rule of 78" loan amortization sometimes offered in car-dealer financing.
Q 6: WHAT LOAN TYPES DO CREDIT UNIONS OFFER?
CUs offer home improvement loans, HELOCS and HELS, educational loans, computer loans, and first mortgages.
Many CUs often offer small consumer loans that banks ignore: $1,500 to pay an orthodontists' bill for fixing their kids' teeth; $2,000 for a summer vacation to Wisconsin; $1,900 for emergency travel to a relativesí funeral.
Q 7: IF I'M REBUILDING MY CREDIT, WILL A CU HELP?
CUs tend to take a personalized "case-by-case basis" approach to lending to individuals with spotty credit histories. For persons with past credit problems, a CU may be more likely to offer them a low-limit VISA/MasterCard (i.e. $500 line) than a bank would - and NOT rip off the member with predatory fees, charges, and rates.
Q 8: COMPARE CU DEPOSIT ACCOUNTS WITH BANK ACCOUNTS?
CU deposit accounts generally offer better interest rates, and lower fees and charges, than traditional banks (excepting Internet banks). CUs often use the term "dividend" in lieu of "interest" on savings account, to underscore the notion that you are an OWNER instead of a LOANER.
In addition to the basic Share Savings Account, many CUs offer Money Market Accounts and CDs with low minimum balances. Many CUs also offer S&P500 Index-based Market Rate CDs
Most CUs offer checking accounts ("Share Draft Accounts") with very low monthly fees and costs. Check reorders, money orders, and cashier's checks are inexpensive, and notary service is usually offered without charge. Many CUs provide Bill Pay service, sometimes for a monthly fee.
Q 9: HOW DO CU ATM CHARGES COMPARE WITH BANKS?
CUs typically offer lower charges, like this:
1). No-Fee access to their own CU ATMs.
2). No-Fee access to other ATMs (no "foreign ATM charge"), but other ATM operators' surcharges may be imposed against the cardholder's account.
3). No-Fee access to Selective-Surcharge ATMs in the CO-OP Network, Member Access Network or the Credit Union 24 Network These networks provide participating CUs' cardholders with no-charge access to thousands of ATMs throughout North America.
Q 10: WHAT ABOUT ONLINE BANKING, BILL PAY, TELEPHONE BANKING?
CUs have upgraded their online banking in the past year, including real-time transaction viewing and Bill Pay. Most also offer 24-hour automated telephone banking systems.
Q 11: ARE CU DEPOSITS INSURED BY THE FEDERAL GOVERNMENT?
Sometimes yes, sometimes no. CU Insurance Thread
Each CU decides whether to join NCUAor to offer private deposit insurance. Most CUs are NCUA members and pay NCUA insurance premiums. NCUA insurance is backed by the U.S. Government like the FDIC. NCUA insures member accounts up to $100,000 per depositor.
Q 12: HOW DOES A CU COMMUNICATE WITH ITS MEMBERS?
Members generally receive a mailed quarterly or monthly account statement, including a newsletter announcing CU products, promotions, meetings and education seminars. Many CUs also inform members of upcoming events on their web sites.
Q 13: WHAT ARE FINANCIAL COUNSELING AND EDUCATION SERVICES OFFERED BY CUs?
Many CUs offer free or inexpensive financial counseling and education: credit counseling, household budgeting, saving and investment strategies, car buying. These services are a great benefit of CU membership. As eloquently stated by the Access Across America mission statement:
<< We believe that through empowering and facilitating the process for folks from all walks of life to access affordable financial services, more Americans will be prepared with the financial literacy skills and resources to achieve financial freedom from many of the predatory establishments.. >>
Q 14: WHAT'S THE DIFFERENCE BETWEEN BEING A "CU MEMBER" AND A "BANK CUSTOMER"?
Many CUs operate on the "Once a member, always a member" and "members helping members" principles. This is the biggest difference between banks and CUs.
On rare occasions, banks may abruptly terminate a customer's account relationship without notice because of some problem - i.e. a manager believes the customer has abused their account or committed fraud. A bank's action can damage a customer's reputation if they are "blacklisted" with ChexSystems.
CUs are not perfect, but typically they will contact the member personally before taking drastic actions against a member's account. CUs are diligent about deterring fraud, but they value their member-owners more highly than banks do. If a CU must close a particular deposit account, you can still maintain your MEMBERSHIP and your Share Savings Account except in the most extreme cases.
CUs are governed by Boards of Directors who are active members of the CU and who are elected by the membership at annual meetings. Most CU board members are unpaid volunteers. Each member has a vote at the CU annual meeting, whether they have $100 deposited or $90,000. The CU is a cooperative that exists for members to help each others - "Not For Profit, Not for Charity, But For Service".
Q16. WHAT'S THE DEAL WITH SOME CREDIT UNIONS CONVERTING TO BANK CHARTERS?
Some credit union managers and board members have decided, for various reasons (including perhaps the opportunity to build a higher-paying career working in a for-profit institution) to cleverly work with consultants to convert their CUs to banks. Some web sites on this topic worth looking at are:
Save Columbia Credit Union, Vancouver, WA
Credit Union Conversions consultant CU Financial
Q 16. ARE CU MEMBERS MORE SATISFIED WITH THE SERVICES THEY RECEIVE THAN BANK CUSTOMERS?
CUs often earn higher customer satisfaction ratings than banks. CU members report that the quality of service and the consumer-focused down-to-earth attitude of CU personnel are a refreshing change from what they experience with banks. While CUs only account for about 6% of total deposits in the U.S., their influence on our financial institutions has been very significant.