Posted by: kevinfortruth | November 2, 2011

Credit Unions – an Alternative you can “Bank” on….


I can hardly remember the last time I banked with a financial institution with the word “Bank” in its’ name. 

In fact, I believe the last time I banked with a “Bank” was in 1983-1984 with a regional Texas Bank in San Antonio, Texas. 

Regarding banks, the big line you now hear about banks is that they are “too big to fail”.  Well, that obviously did not apply in the mid 80’s because the bank that I banked with in Texas failed royally.

So what does my personal banking history have to do with what is going on with the Occupy Wall Street protests going on across America?  One reason has to do with an article I just read at BoldProgressives.org having to do with finding “Good Guy” smaller banks in your area.

The article strongly recommends that you move your money from the Citigroup’s and the Wells Fargo’s and the Bank of America’s and the JPMorgan’s to one of the smaller independent banks in your area.  Near term, this plan sounds good but in the long run it might backfire.

Over the past two decades these four powerhouses of banking have continuously bought out smaller banks across the country or have merged with other large banking corporations.  As a matter of fact, when these big boys of banking got bailed out by taxpayers via TARP, courtesy of the White House and Congress, they used a good portion of the taxpayer “donations” to buy out smaller local banks across the country for pennies or dimes on the dollar in an effort to become even larger.

These large banking behemoths made much more money on these buyouts than they could have made by making loans to small business startups or on loans to small businesses desiring to expand. 

The unfortunate part of the TARP debacle is that Congress and the White House sat on their laurels while these bailed out banks went bank shopping.  I equate what the big banks did to what a wino does when he/she is sitting on a street corner with a sign saying “Can you spare a little money for food” and when someone gives them a few dollars they immediately go buy more liquor. 

I am not as aggravated by the big bonuses these banking corporations give out – I am aggravated that we, along with the White House and Congress, gave them tons of money with no strings attached.

I strongly believe that if a banking conglomerate is having financial problems, it should first tighten its’ corporate belts by reducing or eliminating bonuses and also trimming or discontinuing dividend payouts.  After those two steps are taken, then and only then they can try to get some government bailout with serious strings attached – otherwise, if it is too big to fail, it should be ALLOWED to fail, no matter how the cards fall and who loses out in the process. 

So, lets get back to the “Good Guy” local banks that BoldProgressives thinks that you should move your money into after removing it from your account(s) with one or more of the Big Guys.

I think that some of these Good Guy banks could be problematic because if any of these banks have problems in the near or distant future, they will also be bought out by one of the banking behemoths – and when that happens, you will be in the same pickle all over again.

That reminds me of the classic rock oldie “Will it go round in circles” – your Good Guy bank of choice might not be bought out by your previous banking behemoth but you can be sure it will eventually be bought out by one of the other three behemoths.

So, after all of this, I would like to present an alternative – do a little research on your own and compare the various local Credit Unions in your area.  Compare wisely, shop for one with financial strength, branch locations that are convenient to you, and make sure it is on a variety of banking networks that will allow you to use another credit union when your own credit union is not nearby.  Many credit unions have agreements where you can make a withdrawal at another credit union without paying a fee to your credit union or the other credit union.

By transferring your accounts from your banking behemoth to a credit union, you are helping to tell the banking behemoths that you do not need them for your financial well being.

By the way, credit unions have various programs throughout the year where they offer special rates on car loans or holiday loans and where they even let their members skip a payment for being a good customer.  I personally remember a few years where I skipped a payment near Christmas, at their offer, and it made those holidays a little bit better.

The bottom line is that I strongly recommend removing your accounts from the banking behemoth you are currently using to a credit union at a time when it is most convenient for you.

These behemoths sometimes have restrictions on their customers as to when and if they can close different types of accounts – so, it might be necessary to move your accounts one at a time over a period of time.  Some times these behemoths do their best to charge special fees to anyone closing an account but I heard that Congress is looking into that practice.

Will Bank of America and the other behemoths be hurt if a few hundred average Americans close out their accounts?  Surely not.  But will they be adversely affected when 5, 10, 15, or 20 million average Americans close accounts and move their money to credit unions?  You betcha they will.

The truth is that banking behemoths do not want customers that have minimum balances in their checking accounts and small balances in savings or CD’s but they surely want upper middle class Americans that have thousands or tens of thousands or more in their savings accounts, money market accounts, or CD’s. 

So, my suggestion is to quickly run away from these banking behemoths – don’t walk away – and you will never regret it.  I have always found customer service to be excellent at all credit unions I have been a member of.  They sincerely work hard at earning and keeping your business.   

One last thing to remember – banks are owned by their shareholders and banks are obliged to their owners first.  A bank’s customers matter secondary to shareholders.

On the other side of the coin, credit unions are owned by their members who are also their customers and that is why you will always get better service at a credit union.

Good luck with your decision – and more importantly, if and when you close your account and move it to a credit union, you will never have a reason to look back!

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Responses

  1. Well said, but things are about to change for the better very soon

    • Great minds think alike… thanks for the visit…

  2. I have an account in two credit unions.
    I also have an account with four bank, including one online bank.
    I also hoard money under my mattress.
    Why don’t I have a girl frined?

    • There are several reasons why you do not have a girlfriend “Onewhoflew” – you keep a low profile – you are not actively pursuing anyone – sure, you go to 2 or 3 restaurants a week for lunch or dinner but you do not “actively” visit upscale food stores” like Whole Foods where many eligible women frequent – you have a small selection of restaurants you frequent – always on the same days – you don’t mix it up by going different days/times.

      The biggest reason is that you do not value the fact that you are a true gentleman and quite charming and well educated – you mistakenly believe you need to be a published athor and a pocketful of money to attract a lovely, intelligent woman – with a pocketful of money you will attract a gold digger.

      Mix it up and go to La Madelaine on Sunday and early evenings before the first evening movies start, Jason’s on Saturday and Sunday and go to California Pizza Kitchen a few times and you will meet someone. Also, if you go to a large place of worship, the single and divorced women there will flock to you.

      Take two margaurita’s and call me in the morning.

  3. Hi Kevin good job on the blog on the banks I do have one point that I would disagree with you on. You said it doesn’t bother you if the banks pay out the big bounces to there upper staff. I do have a big problem with that if a bank is not making money they shouldn’t get there big bounces. When we bailed the banks out with the TARP money they was supposed to free it so that companies could browwer money to hire new employees. These banks instead went out and buy banks up and to pay there big asinine bounces.

    • The bonuses the big banks paid out were because Congress and the White House did not put enough strings attached to the TARP money. If banks run their businesses legally within banking laws I have no problem with them paying bonuses. I also do not have a problem with banks paying dividends to their shareholders – that said, if banks have enough money to pay bonuses and dividends then they have no reason to ask for a bailout.

      Bonuses are not the problem – bonuses are as a result of banks making huge profits by doing things like adding fees to their less affluent customers. Millionaires who bank with the behemouth banks never get charged a lot of fees average Americans pay every month – in effect, it is Robin Hood in reverse.

      When middle class Americans pull their money out of the banks and shift to Credit Unions, banks can no longer pick their pockets so they can pay dividends and pay out HUGE bonuses. Switching accounts, will by itself, reduce bonuses, will probably cause banking stocks to take a hit, and dividend payments, which usually go to the upper income Americans, will also be reduced.

      Our Government, the national media, and large corporations have made us think that middle income and lower income Americans do not have power because they are too DUMB to unite and exert their collective power – but Occupy Wall Street is the starting point.


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