Monday, November 11, 2013

"Bank is a 4 letter word"

Many of my summers growing up involved spending two weeks at my grandparents' house in Manitoba.  My grandpa always weaved education into the time, and I remember one such trip had a focus on financial institutions.  We drove out to the country side and he took me to Steinback Credit Union.  He had lots to share about credit unions and banks.  I remember one of his phrases that "bank is a 4 letter word".  I definitely appreciate that exhortation to use locally based institutions like credit unions.  If you're not using a credit union, why not?

Here's a quick blurb the credit union we use (WECU) sent out on why credit unions are not the same as banks:

When you walk into a WECU® lobby, or call a loan officer, what makes a credit union different from a bank isn’t immediately apparent. The two financial institutions may offer similar products and services but the similarities stop there. Crucial differences exist - in structure, in cost of borrowing money, and in use of services.
Credit unions are member-focused non-profit financial cooperatives dedicated to improving members’ lives. More than 95 million members are part of 7,100 U.S. credit unions with combined assets of $1.02 trillion.  
Credit unions are the only democratically controlled financial institutions in the United States. You and other members elect a volunteer board of directors to oversee the credit union. The manager or president/chief executive officer reports to this board. Bank directors, however, are paid and legally bound to make decisions that benefit stockholders. 
Credit unions have the best rates. Credit unions price loans, pay interest on funds you’ve deposited, and charge fees to provide you with high-quality, low-cost services. Banks price products, fees, and services to make a profit. At credit unions, money market, savings, and interest checking accounts carry higher rates - giving back more to members. Interest rates on credit cards average three percentage points lower than bank rates, and auto loans average about one and one-half percentage points lower than bank rates. Credit unions make consumer loans and member business loans.  
Credit unions educate members about money matters. They provide publications to keep you advised of rates, loan sales, and financial trends that affect you. WECU® stresses education, providing materials and holding seminars on financial planning as well as car and home buying to help you make informed buying decisions. 

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