Everything You Ever Wanted to Know About Banks and Credit Unions but were Afraid to Ask
Credit Unions- An Idea Whose Time May Be Now
The Big Banks which the Fed decided were too big to fail got lots of our tax dollars in bail outs to insure that they could remain solvent and viable especially to foreign investors to continue doing business the way they always had. The taxpayers whose money was pledged, assumed that banks would continue to make mortgage and business loans as one of their core competencies.
After the banks took the bailout money they have basically just given the American consumer the finger! and have found other ways to continue to make profits for their shareholders. Banks are "For Profit" so their business models were modified to ensure more profits and less risk as had been associated with some of the more questionable mortgage loans which they bundled and pushed out to Wall Street investors
Banks seem to be making it perfectly clear that they can continue to make profits and take less risks overall without as big a mortgage footprint. One big bank is considering getting out of the mortgage business. This while still using your deposits and paying you virtually nothing to use your money to keep their shareholders happy.
Maybe Time to Consider a Credit Union
By shifting your bank funds to Credit Unions would give you some greater leverage and provide the credit unions with more money to provide local banking services, which would include making mortgage loans to it's members. Credit Unions can offer many of the same services as banks can, short of having all the convenient bank branches where you live. The difference is you will have a say as a member of the credit union where with the big banks you are just one tiny account that means very little to their larger bottom line. With your funds in an insured credit union account (Credit Union funds up to $250,000 are insured by National Credit Union Share Insurance Fund ) , you would likely notice that you will be paid a little more for the use of your money and likley pay a little less interest for that mortgage or business loan you secure there. Another difference is that credit unions which are " Not For Profit" actually want to serve it's members monetry interests.
Coincidentally, Oct 20th was International Credit Union Day. Imagine if the majority of your neighbors all across the country had the same vision of joining a credit union and shifting their funds to credit unions and allow the bank's shareholders to see what "too big to fail" looks like from the consumer perspective.
Joining a credit union is easier than you might think. Many credit unions were originally set up to accommodate trade members in various industries but many more are now opening in communities across the nation in local neighborhoods for the communities they want to serve.
We might even be able to return to a time in our country when the smaller local banks served and supported their local communities before the big banks took them over or forced them to close by drawing away their depositors. Perhaps it is now time to reverse that trend by empowering our Credit Unions to be our local banking service providers. It is at least an idea worthy of looking into.
Real Estate is local and maybe home loans should be as well.