DALLAS – Credit unions received higher marks for personal service and better interest rates, and banks received higher marks for breadth of product line and convenience from two interviewees in a Sept. 27 Dallas Morning News article that examined the pros and cons of the two types of financial institutions. The article featured comments from a member of Community Credit Union, Plano, Texas who drives 15 miles to his nearest credit union branch, but believes the personal service he receives justifies extra time in the car, and comments from a three-bank customer who likes the proximity of multiple bank branches but is disenfranchised by impersonal customer service, such as phone calls handled by overseas call centers. The small size of most credit unions (which directly affects the number and types of products they offer), membership restrictions, and limited physical access were "cons" connected with credit unions. In particular, the article singled out consumers having to pay other institutions' "annoying" ATM fees because of limited access to their own credit union's ATMs. In addition to impersonal customer service, less favorable interest rates and fees were mentioned as "cons" for banks. Referencing a Bankrate.com survey, credit union rates beat banks' on most loan and deposit products, except 15-year and 30-year fixed rate mortgages and home equity lines of credit. Is one type of financial institution that much better than the other? Not really, the article suggested. As credit unions try to be more full-service and banks try to be more customer-friendly, differences are narrowing. "What it boils down to is convenience and what best suits the customer's needs," said banking industry analyst Scott Alaniz. Credit unions can feel encouraged that the story discussed the always-to-be-reinforced difference in "structure" of the two types of institutions. Texas Credit Union League president and CUNA chairman Dick Ensweiler was quoted, "Because we don't have that profit motive, we can look at our product offerings in a whole different way. We can adjust our prices to better serve our members." On the flip side, the article touted bankers' belief that they are at a competitive disadvantage because credit unions pay no corporate income taxes. "We believe the system is totally out of kilter. It impacts our ability to offer products and services and to be competitive," the article quoted Steve Scurlock, Independent Bankers Association of Texas executive vice president. DMN writer Ieva M. Augstums concluded, "Maybe so, but it's not like credit unions are taking over the industry. Credit unions lay claim to only a small portion of the U.S. financial services market – about 6.3 percent of the total assets of banks and thrifts." Unfortunately, credit union progress in expanding product line and accessibility is not enough for the disenfranchised bank customer quoted in the article. He indicated he likely will move his business to a local community bank rather than a credit union. -

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