SARASOTA – Whether it's anger at Wall Street in general, or at ever-increasing fees and charges, some people are looking for alternatives to their banks.
Credit unions hope to capitalize on that frustration to win new customers.
“Credit unions are in business to maximize services to their members,” says Patrick Keefe of the Credit Union National Association. “A bank is in business to maximize profit to its shareholders.”
CUNA does not have the resources to launch a national media campaign, Keefe says, but individual unions are using radio and direct mail advertising to target potential customers. Achieva, a Clearwater-based credit union, sent out post cards blaring the announcement that banks planned to charge customers $3-5 per month for using debit cards.
“They see an opportunity and they're going to reach out as well, so, yeah. They're taking advantage,” says Keefe.
Credit unions offer many of the same services that banks do – with one big difference: They're owned by their members.
“There's no profit motive so they don't have to charge as much,” says Thomas Pencek, a professor of finance at USF Sarasota Manatee, who says he recommends that his students consider credit unions for their banking business.
He says that loan rates are lower, interest rates on savings are higher, and that customers usually don't have to play that bank fee whack-a-mole game with credit unions. Some credit unions charge a membership fee as high as 15 dollars to join -- but the minimum balance for accounts can be as low as $5.
“I think mainly it's just that a lot of people aren't aware of credit unions,” he says.
That could be changing. CUNA says it does not have exact figures in hand but that its members report growing business, “anywhere from 20-50% over the same time period last year,” he says.
Pencek warns that you need to check to see if the credit union you want to join can offer the services you need. “A lot of credit unions, particularly in this area,” he says, “are not big enough to handle, for example, credit cards.”
But, he adds, as credit unions grow, so will their ability do do the things you want in your bank – without the things you don't.
