STEPHEN SHYMANSKY — Staff Writer
The latest unfolding events from the Occupy Movement have been seen in what many have come to know as Bank Transfer Day. On Nov. 5—Bank Transfer Day—some Americans took a voluntary, active role in transferring their funds from national banks to credit unions. According to the Credit Union National Association (CUNA), more than 40,000 people joined various credit unions, which resulted in deposits of about $80 million.
As of late, citizens have been bombarded with news from commercial banks attempting to impose extra various fees on account holders (need I mention Bank of America and their suggested monthly fee of $5 to use one’s own debit card). As a result, credit unions have seen a surge in business, and November has been one of the best months ever. For many consumers, the difficulty that comes from banking with large national banks has resulted in many people becoming “fed up” and looking elsewhere for their banking needs. On the plus side, credit unions are known for their competitive credit/interest rates, higher dividends, personalized service, and member-run banking system, which allow for thrift service to its members. Therefore, why would you not join a credit union, specifically, when many are fed up with the financial mess that is currently being experienced by citizens via these large national banks? It only becomes logical that people look to financial institutions that provide competitive services and assistance for banking needs.
The FDIC insures deposits in banks and savings and loan associations. Federal credit unions, on the other hand, have their own insurance fund, which is not secured under the FDIC. Instead, this fund is run by the National Credit Union Administration. When you join a credit union, you, in a sense, don’t really make a deposit. You become a “member” of the credit union, and the money that you place in the credit union is called “shares.” Overall, these shares are insured in a similar way to the way bank deposits are insured by the FDIC. Another big difference is where profits go. When you’re doing business with a credit union, the profits of that credit union are being returned to the members of the credit union in the form of lower loan interest rates and higher dividend- -unlike doing business with a bank where the investors of that bank are basically reaping the profits of the institution.
Credit unions have always been popular; however, recently this popularity has seemed to increase. Therefore, are credit unions the next wave of what citizens are looking for when it comes to addressing their banking needs? Choosing a financial institution is a personal choice and is ultimately about finding whatever banking institution works best for one’s self and banking needs.