I started working on this blog post three days ago, and the economic reality keeps changing.
First, I’m not happy with the banking situation, but it’s a piece of news unrelated to the mortgage bailout that sticks in my craw today. From the Seattle Times via the Neatorama blog, we learn that Alan H. Fishman, the 17-day’s CEO of the failed Washington Mutual bank ” is eligible for $19.1 million in compensation.”
Even if doesn’t get that, or declines it, my question is how does his work merit it, and how much of it will the American people eventually pay? The system is broken, and I won’t support it. In the mean time, my own bank, Wachovia, failed and has been bought by Citigroup.
I’m getting just disgusted and am opting out. My way out is by changing my financial services to a credit union: a cooperatively-owned financial institution answerable to its members. I’m looking for one that meets my needs for a good online user experience, and — because membership is not universal — one that I’m eligible to join.
I’ll keep you posted, and thanks to J.T. for the lead.
I just joined a local credit union last week to start shifting money away from WAMU. I noticed that the guidelines for credit union membership seem to have broadened. Often it’s more than just an employee group, but includes locals, as well as people who work locally or (oddly enough) go to worship services locally.
Several D.C. credit unions allow people who live, work, study or worship in Washington, D.C. (or sometimes surrounding counties) to join. One such is the Treasury Department FCU, which would be a delicious irony. (They’ll even let you join if you “regularly conduct business” in Washington.)
I would advise some caution when dealing with very large credit unions. Some of these effectively function as large regional banks, tend to be unresponsive to the public, have huge and apathetic membership bases, and exploit their non-profit status as a way to aggresively expand branches and advertising (instead of returning those dividends to their membership, or offering lower loan rates).
This kind of behavior is what led to the demise of most mutual banks in most states (except Mass.), and to changes in the regulations governing mutual banks and their tax status. Mutual banks were a legal predecessor to the credit unions, and based their business model off the example of mutual insurance companies (where the company was a non-profit owned by policy holders). When the mutual banks grew too large and aggresive, they turned their eyes away from economic empowerment of their members, and towards ambitious programs of expanding their market share. Today I see very large credit unions duplicating this pattern.
@Derek. I wish we had that problem in this area, at least to spark some competition. All of the credit unions I can join have one or two branches and poor hours, which is why I initially didn’t join one. (But I bank mainly by Internet now, if I can help it.)
I use a local credit union, and have been very happy with them. We shopped around for our mortgage, too, and ended up going with them for that as well. They treat us like individuals, not the sum of our numbers (income, credit score, etc.). When I went overseas and was worried about a mortgage payment, my credit union promised to keep an eye on my account for me and notify me if it got low enough that my mortgage payment deduction would bounce. Now that’s service!
I’ve used credit unions almost exclusively for 25 years. I’ve no bad experiences to report, and some very good ones. My few experiences with banks in that time have almost all left me reminders of why I don’t use them.
As with all institutions that are based on membership… it’s important to keep the members tied into what’s going on and not allow the executive board become independent–or they start acting like corporate execs…
My CU has expanded in recent years, though no one would mistake it for a big bank. I love it, and so far (member for almost a decade) no problems. When I have taken out loans, I almost always deal with the same person and it feels so much more comfortable and respectful than my experience with banks. Fortunately, while I don’t have a nearby branch, I can use the ATMs of a certain ubiquitous grocery chain for free, and because CU’s often cooperate between themselves, the local branch of another local CU allows me to transact business as if I were a member there.
For an exciting alternative to credit unions, take a look at common good banks (http://commongoodbank.com)