The “best” financial institution might not be what you think. New problems call for new solutions, and in today’s society managing debt is a challenge faced not only by consumers, but by banks as well. Enter the age of the credit union.
By offering an ever-increasing range of financial services and fluctuating interest rates, credit unions quickly are emerging as a leading alternative to traditional banks. In fact, customer satisfaction surveys consistently favor the unique market strategy of credit unions, and with good reason. It is time to examine the cold, hard facts about Savings and Loans (S&Ls or credit union).
First and foremost, it is important to understand that your money is just as secure in S&Ls as it is in a regular bank (up to $100,000 cash). If you take nothing else from this article, remember this: there have been huge improvements to S&L business practices in recent years, and the infamous crash of the 1980s is anything but representative of the modern system.
In 1995, the original Depression-era Savings and Loan Insurance Corporation was replaced by the Savings Association Insurance Fund (SAIF). In March 2006, the FDIC and the SAIF were merged, sufficiently ending depositors’ worries about the safety of their assets.
However, there are significant differences between traditional banks and credit unions, and on these differences credit unions come out on top. S&Ls are member-owned (bankers have a share in the company), do not distribute dividends with the same motive as a bank, and are representative of their members (geography, occupation, skills).
Additionally, there are hundreds of thousands of credit union members who “save where they work,” having for decades led the way in strengthening Savings and Loans. Work-based Savings and Loans programs include GE, Weyerhaeuser, teachers, and state employees.
Banks are beginning to take notice of the success enjoyed by credit unions. So much so, in fact, there is even a movement to pass laws limiting the most competitive and profitable credit union trends! (If you like economics, check out the article on S&Ls v. banks in the “Review of Industrial Organizations”). There must be something good in it for consumers…
Now onto the three reasons why you should choose a credit union...
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