Talk:Credit union

There are several thousand credit unions - should 2-3 really be linked to directly?

Not sure how long ago this was posted (or by whom), but there now is a list of credit unions with its own entry. IMO, this is a better way to reflect the range of credit unions worldwide than attempting to shoehorn individual credit unions in the main page. Friejose

Quite agree. A list is going to be far easier to maintain and use. What would be useful, but probably too complex, is a zoomable map that would allow people to identify their nearest CU by mouseclick

Does listing in a piecemeal fasion, with an article which speaks to define what a credit union is, become defacto advertising for the few credit unions that have had their names placed on this page? In some ways, I can understand some one listing their own credit union if they are a consumer, but I can also see a credit union employee or Board member doing it as well. So at one point does a listing that isn't complete, become advertising? Stu 18:40, 15 October 2005 (UTC)[reply]

Generally, I don't think it as advertising, but definitely it could be. Well at least for me it isn't, I listed the credit unions I am involved in because I want to list it, not because I want to spread the word for someone to join it. Because chances are, because of membership eligibility requirements, this manner of marketing might only hit less than 1% of our eligible potential members (just throwing in some odd figure). This may be FREE advertising and it may work for credit unions as an industry, but definitely won't work for individual credit unions. -Mang Kiko 05:37, 25 January 2006 (UTC)[reply]

French speakers from the Maritimes or from Québec? The "caisses populaires" (credit unions)were founded in Québec not in the Maritimes and the vast majority of french speaking people came from Québec. Therefore I think we should replace Maritimes by Québec.

I would like to see more information on modern use of the Credit Union in the United States. Although the goals listed in the page are laudable, there seems to be a disturbing trend of credit unions attempting to serve all "banking needs" while retaining their advantageous tax and other status.

More and more, the Credit Union appears to be the contemporary equivalent of the Savings and Loan; yet as (at least supposedly) "account-holder owned" institutions, I can't figure out where the financial incentive is for these organizations and those who operate them - more and more small credit unions are being gobbled up by larger ones (emulating the banking industry), without the incentive of stock options.

Understand, my point is not that credit unions are "bad," simply that their original purpose of promoting savings seems to be dissapearing under the promotion of share drafts, ATMs, loans, and other "banking" services (most with fees equal to, or even greater than, traditional banks). I'd appreciate a more in-depth look by those knowledgable on the issue.

Hopefully I won't sound as if being Holier Than Thou. I am not here to debate, I am here to discuss... :)

I agree that credit unions have entered to serve ALL "banking needs" as we know it and retained tax-exempt status. However, credit unions are tax-exempt not because of limited financial products, it is because of the structure. Credit unions is mandated to make a profit since it needs to maintain 7% net worth to be considered financially sound. But it does not make profit for select individuals such as share holders and cannot raise capital by issuing stocks. It makes profit for its depositors (fondly called as members) by earning income from loans, investments, and god-forbid, fees. It is operated by a volunteer board of directors elected by the membership among the membership. Regardless of the balance in your account, one member can only have 1 vote and no proxy voting allowed. The main focus of a credit union is to help members make informed choices about their finances, be it investing, taking out a loan, or buying a new or used car, and offer competitive products and services.

Actually the main idea of a credit union is about credit. Where we being all construction workers from ABC Construction Company for example can pool all our money together, and those of us who needs to buy a car can borrow from that pool at interest rates that we, as a group, decide for ourselves. This is why credit union loves to characterize themselves as People Helping People.

There were 319 mergers approved by the NCUA in 2005 (Source: Credit Union Journal, Jan 24, 2006). Making it almost 1 merger a day (excluding Sunday, no mergers on Sundays). What makes up this large number are those small credit unions that didn't really offered those new products and services considered to be bank-products, and in the end, they are no longer viable to compete with other financial institutions and eventually needs to do voluntary liquidation or entertain a merger. A note on merger: credit union mergers are unlike most bank mergers. Credit unions are not bought by other credit unions and the merging credit union (the one that can't survive on its own) can entertain two or more other credit unions that will try and convince them that "if you merge with me, you get all this" sales pitch. Ultimately, the merging credit union members will have a vote on whether they want the merger to proceed or not. No money is actually gained by any member on these mergers and the merging credit union gains all the products and services provided by the continuing credit union at no extra cost to them. So they are gobbled up, but they have a say if they want to be gobbled up.

Definitely, you can never discount the fact that there are credit unions out there that are not taking to heart what they were created for and are starting to act like not credit unions (NOTE: I didn't say BANKS... lol). But offering more products and services doesn't make it a bank, since growth is simply a natural thing to do for any organization to thrive. In reality, despite the bank-like products and services credit unions offer, credit union market share didn't grow as much from 1993 to 2004 (Source: FDIC as cited by the California Credit Union League):

Largest 100 Banks: from 43.0% to 64.6%
Smaller Banks: from 51.3% to 28.9%
Credit Unions: from 5.7% to 6.5%

--:Mang Kiko 06:55, 25 January 2006 (UTC)[reply]

That sounds really nice, in a utopian sort of world (you certainly don't sound, "holier than thou," but you clearly have little scepticism on the subject, sounding a bit like a CUNA lobbyist). Many years ago, when my local municipal employee CU was eaten by a larger one, it wasn't anything like that pretty scenario you describe. Our little CU was more than solvent, had considerible cash-on-hand (the CU promoted savings, not ATMs or credit cards, which could be why we were so attractive), and was courted relentlessly by the acquiring CU. After being soundly rejected by the membership, they came back again this time being more politically-saavy (co-opting one of the paid officials with presumably a more solid retirement package, who pushed through increased fees and decreased services until the purchasing CU actually looked good; a bit more than a year later, the acquisition was approved by a sparcely-attended meeting). Yes, my old credit union pooled money for loan; the new one brings in mortgage service companies from which they receive payment for each suck...er...client who purchases a mortgage through them. (Hey, if you aren't allowed to offer a service, find someone who is and is willling to kickback, right?) From what I've seen in my CU, the days of people with a comminality pooling money for low-interest loans are long-gone, and there are other insentives for CUs to constantly advertise on radio, television, etc. When CUs start building expansive offices, rivaling the money large banking corporations spend on buildings and grounds, something is wrong. (One of these days, for my blog, I'm going to drive around taking pictures of the opulent new buildings local credit unions have built over the last ten years. Who paid for those expansive office suites? The "members," of course.)

As for, "less than 1 in 7 people who qualify for a credit union know that they qualify," that's easy; while once membership was restricted to employees of a given company or industry, or some other commonality, now anyone in a geographic region might be eligible to join multiple credit unions, so (for example) everyone in my county will be eligible to join my CU after the annual meeting when the charter is changed. My guess is that everyone in the country is probably eligible to join some credit union or another.

It is clear to me from the inside that there is some financial insentive for at least the paid officials (President, CEO, etc.) to grow the unions, but I can't figure out what it is. When the interest being paid is less than many local banks, the loan rates are higher than local banks, the service fees are greater and more numerous than large conglomerate banks, and still they claim to be, "People Helping People" by changing charters to "service" more people, I am certain it ain't out of some altruistic desire to "do good." That's not how the system works in this country. --Charlie Summers (who doesn't "register" on principle) 71.114.136.34 16:33, 2 May 2006 (UTC)[reply]

History

It would be great to have some information on the history of credit unions :) - FrancisTyers 00:47, 8 January 2006 (UTC)[reply]

North American statistics

The article reads: "The United States has nearly 85 million credit union members, however less than 1 in 7 people who qualify for a credit union know that they qualify..."

In other words, for every person that knows of his eligibility more than 6 other eligible people do not know of their eligibility. If we assume that all of the 85 million current credit union members in the US know of their eligibility for membership, then for each of the 85 million current members there are more than 6 other people in the US eligible for membership that do not know they are eligible. That means, based on the claims in the statement above, there are more than 595 million people in the US that are eligible for credit union membership. Given the US population is around 300 million this is obviously impossible.