As the president and CEO of a credit union, I’m quite naturally intrigued by the prospect of a nationwide "Bank Transfer Day," scheduled for Nov. 5. The event, conceived by consumers on the West Coast, encourages people to transfer their funds to credit unions and smaller banks that are more consumer-friendly. While the idea of Bank Transfer Day is a reaction to newly conceived monthly debit card fees by some financial institutions, credit union leaders have struggled mightily to understand why this hasn’t been a trend before.
So while I’m personally intrigued by Bank Transfer Day, I’m more grateful that there is finally large-scale awareness about what member-owned credit unions have been doing all along. This grassroots movement is helping raise the profile of credit unions, perhaps more effectively than we could ourselves. It is being reported that as of today, nearly 70,000 people are going to participate in Bank Transfer Day, but I think it’s really time for all consumers to recognize that credit unions may be a better option.
Bank Transfer Day spokespeople have advocated joining a credit union because of "what they do and what they represent." In a nutshell, this is what we do and represent: Credit unions are owned and operated by their members (anyone who opens an account becomes an owner). This structure alone removes the ulterior motives to take advantage of the people who do business there, because as members, they own the place.
Credit unions are non-profit financial cooperatives set up to serve people with something in common: a workplace, a profession, a geographic area or other characteristic. They’re governed by and accountable to a volunteer board of directors, who serve at the pleasure of the membership. All members-everyone with money in an account with the credit union-is entitled to vote on major decisions affecting the non-profit organization. This ensures that the decisions the board makes are informed and influenced by, and are in the best interest of, credit union members. And it’s one member, one vote, not a skewed voting system based on how much money you have in the credit union. It’s democracy at its best.
In addition, credit unions have never taken a penny of government money, not only during the recent bailouts but for our self-funded deposit insurance, which remains strong, or for the operating costs of our regulatory agency. In some cases, credit unions have even banded together to help each other offer conveniences that otherwise could be offered only by the largest banks.
I do appreciate the impacts that banks have on our communities. There is a definite role that large banks play as for-profit corporations owned by stockholders and governed by a paid board of directors (chosen by the stockholders). But in the cases where this structure results in increased costs and fees for consumers, credit unions are a great option.
Despite some of the most difficult economic times in history, credit unions continue to offer many member benefits and perks like low fees, competitive loan rates and higher dividends on savings accounts. In addition, as the Summit has grown, like many credit unions it has been able to play a stronger role in the communities we serve. We have increased our giveback to local charities and supported community non-profit activities where our members and employees live and work. Whenever possible, we buy from local businesses, and we have a local call center employing people from our own community who deliver excellent service and the personal attention that members have come to expect and love.
So on Bank Transfer Day and every day, we recommend researching your local credit union options at www.findacreditunion.com or www.asmarterchoice.org to find out if joining a credit union is right for you. At the end of the day, people make their own choices of what works best for them, their families and their futures. But we encourage everyone to give credit union membership a very close look.
Michael S. Vadala is president and CEO of the Summit Federal Credit Union.
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