Time Magazine Feature Highlights Credit Union-Bank Differences

WEST PALM BEACH, Fla. – Credit unions may be growing accustomed to seeing their names in local newspapers because of their coverage of attempts by state bankers’ associations to limit credit unions’ field-of-membership expansion and service offerings. But now a major national business magazine, Time, has done a feature story about credit unions in an “Inside Business” bonus section in the magazine. “Big Little Lenders” discusses how credit unions have grown from what the article describes as once being “content to quietly serve a single workplace or small community” to realizing “they must evolve and grow -or perish- and are meeting the challenge with services such as online banking and a nationwide ATM network.” Writer Daren Fonda cited various statistics for her piece on the credit union industry – there are about 10,000 credit unions in the U.S. and roughly 60% of them are federally chartered and supervised by the NCUA; nearly all state-chartered credit unions are federally insured; “and they tend to offer lower fees and loan rates than banks, and higher returns on deposits.” Fonda interviewed CUNA President/CEO Dan Mica and also spoke with members of various credit unions around the country for their comments about their relationship with their credit union. Explaining credit unions’ growth – up 29% in the past two years, growing four times faster that the $8 trillion commercial-banking industry-Mica stated that, “Banks take the consumer for granted – and for an awful lot of money. They are tacking on fees and have less interest in serving small businesses than they use to. We’re filling the vacuum.” Fonda also spoke with presidents and members of several credit unions, such as First Technology CU, Bellco CU, and Boeing Wichita CU, as well as credit union industry experts. Tom Glatt, for example, president, Computer Intelligence Associates, explained why expansion is no longer merely an option for many credit unions. “It’s become a question of grow or die,” he said. As to the niche credit unions serve, Bellco CU President/CEO Doug Ferrao said, “Big banks are marketing to the wealthy, and middle-income people are being underserved.” Fonda cited the all-too-familiar issues banks have raised against credit unions. Harley Bergmeyer, chairman of Saline State Bank, Wilber, Neb. told Fonda that, “We welcome competition, but we can’t compete with the bigger credit unions that don’t pay taxes.” Fonda’s subheadline to her story said it all – “Formerly sleepy credit unions are getting a makeover and help from regulators – and are taking business from banks.” -