The Credit Union Advantage
Banking’s Best-Kept Secret
By Tony Jenkins and Melanie Gibbs
When you’re looking for a financial institution in your new city,a credit union may not be the first thing that comes to mind. But it may be time to give credit unions a closer look. Not only do they offer products and services comparable to those provided by traditional banks, they can also offer very competitive rates and fees. And they’re becoming increasingly mainstream. There are more than 150 credit unions in the state of Georgia, with more than 1.8 million members.
“They’re the best kept secret in banking,” says Dan Berger, president of the National Association of Federal Credit Unions.
What Is A Credit Union?
Credit unions are not-for-profit, cooperative financial entities owned by their members. Federal credit unions are chartered and supervised by the National Credit Union Administration, which administers the National Credit Union Share Insurance Fund (NCUSIF). Backed by the full faith and credit of the United States government, the NCUSIF insures the member accounts in all federal credit unions and most state-chartered credit unions.
“Credit unions have been a reliable, consistent source of credit in both good and bad economic cycles for more than 100 years,” says Matthew Shepherd, executive vice president and chief operations officer of Delta Community Credit Union. “Credit unions offer the same basic products as banks, including savings, checking, credit cards, auto loans and home loans.”
A common misperception is that you must work for a certain employer in order to join a credit union. Although corporate credit unions do exist, not all credit unions require employment with a particular company.
Associated Credit Union, for example, has an “open policy” that invites anyone to join, says Tom Maiellaro, vice president of marketing. “Virtually any person in Georgia could find a credit union they can join,” he says.
At CDC Federal Credit Union, you can apply for membership if you live, work, go to school or church, or volunteer in parts of DeKalb, Fulton, or Gwinnett counties. You can also apply if you are a past or present employee of the Centers for Disease Control and Prevention or its affiliates or subsidiaries, among other criteria.
Delta Community Credit Union serves the entire metro Atlanta area, including residents of 11 metro counties. LGE Community Credit Union is open to residents of Cobb, Cherokee, Fulton and Paulding counties and more than 350 partner groups and family members.
Need help figuring out which credit unions for which you qualify? Websites like www.asmarterchoice.org and www.culookup.com can help identify which credit unions may be right for you. After entering a little information (such as your address and an organization you belong to, like a church, school or employer), you can see a list of credit unions you may be eligible to join.
Why Consider A Credit Union?
So why should consumers moving to the Atlanta area consider credit unions over banks? For one thing, they offer benefits that can come in handy for new residents.
“When someone moves into town, one of the first things they’re going to need is a good checking account,” says Maiellaro. “Maybe they’ll live in an apartment temporarily while shopping for a home. They will find extremely favorable rates at credit unions. At virtually every credit union, if they’ll shop around and compare, they’ll find higher interest rates and lower service charges compared to what a bank would offer.”
At Associated Credit Union, he continues, “the loan process is all done in-house, so you’ll work with the same loan officer throughout the entire home-buying process, which is a huge relief. Mortgages are confusing. It helps to have someone guide you every step of the way.”
Another advantage is that membership is relatively easy and doesn’t require a significant commitment. Many credit unions simply require consumers to make a small deposit when they join. “For example, Delta Community asks consumers to deposit five dollars into a savings account,” says Shepherd. “The five dollars is not a fee, and continues to belong to the member.”
What’s more, credit unions know that staying in step with the times is an important factor when it comes to gaining and retaining members. “Most credit unions offer a large selection of products and services, including mobile banking and online services,” says Berger.
Credit unions also tend to offer distinctive service. “The fundamental difference between credit unions and banks is our cooperative, not-for-profit structure,” says Shepherd. “Credit unions are owned by their customers, not stockholders. We pride ourselves on providing consumers more personalized service and objective advice based on their long-term financial goals. We also offer better pricing and fewer fees in general.”
“We’re constantly looking for ways to help our members achieve financial success,” says Maiellaro. “For instance, our Rate Reward Auto Loan helps members who may not have the best credit reduce their interest rate by 1 percent APR (annual percentage rate) for every 12 months of on-time payments, up to 36 months. It helps improve credit while saving our members money.”
In addition, Berger points out, credit unions help promote the building of wealth, so many offer classes on subjects to help members reach their financial goals.
“In choosing a banking partner,” Shepherd says, “we encourage consumers to look at the provider’s financial stability as well as the total value of their services. Credit unions typically score high marks in both areas. We actually reinvest the earnings we generate into our membership through competitive pricing, better service and other conveniences our members deem important.”
“Credit unions are owned by their customers, not stockholders. We pride ourselves on providing consumers more personalized service and objective advice based on their long-term financial goals.”
For More Information
Associated Credit Union
Delta Community Credit Union
LGE Community Credit Union
National Credit Union Administration
National Association of Federal Credit Unions