Credit Unions a Haven in Mortgage Storm

Regardless of which side has the edge in the debate, the political support for the tax-free status of credit unions isn't going away, and that presents an opportunity for consumers.

Directors at credit unions are volunteers elected by members. Executives are usually well-paid financial professionals, but they don't get showered with stock options like the leaders of corporate America. They don't have Madison Avenue marketing budgets, so you won't see advertisements for credit unions, and when credit unions do well, they don't pay dividends to shareholders. They plow their extra earnings into making their members happy.

The latest American Banker/Gallup Consumer Survey from 2005 showed that while the percentage of "very satisfied" bank customers was the highest on record in 14 years, credit unions achieved an even higher score in that category for the second year in a row. It said 71% of respondents said they were "very satisfied" with their credit union, compared with 58% for mainstream banks.

"People at credit unions tend to treat customers like the end result of what they are there for, rather than an intermediate step on the way to being able to get profits for stockholders," says Hampel.

The personal attention also can help with the process of securing a loan.

"In my experience, the loan application process has been much simpler and more straightforward with a credit union than it ever has been with a bank," says Tim Wesling, president of financial advisory firm Wesling Financial. "The people that work at credit unions tend to be the same people year after year. You can take out one loan from a loan officer and five years later you get another loan from the same guy, and he remembers you. That's a rare thing these days."

Consumers can only join a credit union that serves a particular community to which they belong, but many have recently loosened their membership criteria. To generate a list of credit unions that you're eligible to join, fill out the credit union match-up form offered by the Credit Union National Association. You can also find your local credit unions on the association's Web site here.

Before leaving your bank entirely for a credit union, review its offerings carefully. While they do offer good rates, their products and services are sometimes limited, particularly when it comes to checking account services like online bill payment and ATM access.