This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Credit Unions Take on Big Banks

It's been one of the worst years on record for the financial-services industry -- the financial group of the S&P 500 has plunged 28%. Big banks are buying back bad debt, as in Bank of America's recent deal with Massachusetts. As a result, many banks are hiking fees to make up for billions of dollars in losses. Credit unions, having escaped the financial crisis, are chipping away at their larger rivals' customer base. They offer what most consumers need: good rates, low risks and personal service.

If you are considering switching to a credit union, here are a few things to keep in mind.

Membership criteria

Credit unions have restricted membership, meaning you can join only if you meet their criteria, which typically includes one or more of the following: working for a particular company, living in a designated town or county, or belonging to a specific organization.

To find a credit union near you, visit the Credit Union Coop. You can also search the database of insured credit unions on the National Credit Union Administration's Web site. (The NCUA is the independent agency that charters and supervises federal credit unions. It insures credit union deposits up to $100,000, much the same way the FDIC insures bank deposits.)

Once you find a few credit unions near you, check their membership criteria. Account minimums sometimes are only $1.

Not-for-profit status

Since a credit union is owned by its members and run as a nonprofit, you don't have to worry about third-party interests. (At publicly traded banks, for example, those third parties are often shareholders looking for big returns.) While you still run the risk of dealing with a lousy loan officer -- just like any business, credit unions aren't immune to staff problems -- credit unions have fewer incentives to shoehorn consumers into inappropriate loans. As a result, you're more likely to have a frank discussion about the advantages and disadvantages of a particular loan than at a bank that needs to watch its bottom line.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs