Why Consumers are Switching to Credit Unions
Wednesday, October 8th, 2014
As of June 2014, credit unions achieved a significant milestone by reaching 100.1 million members across the nation. According to Steve Rick, Chief Economist for the CUNA Mutual Group, "Credit union memberships are now equal to 31 percent of the total U.S. population. And with the population growing less than 1 percent, the credit union membership to population ratio will continue to rise for the foreseeable future."
So what is causing the significant shift to credit unions? What is the appeal of these not-for-profit financial institutions over banks?
In the Midyear 2014 consumer research study performed by the Georgia Credit Union Affiliates (GCUA), 83 percent of respondents indicated they love their credit union and 86.3 percent indicated they encourage their family and friends to use credit unions.
When asked what the respondents value about their credit union, 57.4 of respondents noted the lower interest rates on loans; 36.3 percent noted the lower fees on credit cards; 21.8 percent noted the lower fees on mortgages; 27.9 percent noted the higher interest return on accounts, and 70.2 percent noted that they were treated as a member/owner and not as a customer.
Roy Bibb, President and CEO of MidSouth Federal Credit Union in Macon, Georgia, was recently asked what he believes is the one thing credit union members value most about their credit union.
"I believe it's the access members have to the decision-making process and the feeling that they are being heard," Bibb said. "We don't treat all members exactly the same because they each have individual financial needs and challenges. One size does not fit all. Instead, we listen to their unique stories and then present them with the financial tools that will best benefit their individual situation. And if we need to make exceptions to help the member, we do. We strive to be significant in our members' lives by listening and helping. That's what really makes us different."
Regarding making the switch to a credit union, Bibb explained: "We know it seems daunting for a consumer to switch all of their accounts to a new financial institution, but once they see the numbers and understand the savings potential that a credit union can offer, it becomes worth it. Plus, credit union staff members are always eager to help a new member make the switch. Our representatives sit with each potential member and discuss how much they can save with our loans and deposit accounts in the way of better rates and lower fees, and often counsel the potential member in what needs to be done to make the switch."
Additional benefits of credit union membership include:
- Lower Loan Rates - Credit unions offer the same lending products and services as banks, but usually with more attractive rates.
- Higher Saving Rates - Credit unions have fewer expenses than most banks, which enables them to reward and attract members with higher rates on saving accounts.
- Lower Fees - Credit unions typically have lower fees than for-profit financial institutions.
- Federally Insured Deposits - The National Credit Union Share Insurance Fund (NCUSIF) insures members' deposits up to $250,000.
- Free Checking - A majority of credit unions still offer free checking accounts, while only about half of banks do.
- Convenience - Credit unions offer the same conveniences with mobile and/or online banking and easy nationwide access through shared branching.
- Commitment to Service - Credit unions continue to receive the highest marks in the financial services sector for customer service.
To learn more about credit unions or to find a credit union to join, consumers can visit: mycreditunion.gov.