Actors Have Their Own Credit Union

Since it's Oscars week, a story in today's New York Daily News is especially timely. Actors Federal Credit Union in New York City focuses on the needs of--you guessed it--actors.

The credit union's first mortgage borrower was "Law & Order" star Jerry Orbach, who died in 2004. When he got a loan for a West Side brownstone in 1967, he had a role in "The Fantasticks," which became the longest-running off-Broadway show ever.

One credit union loan officer named Paul Cole is a former actor. When making a home loan, Cole doesn't just consider a potential borrower's credit history. He really knows his members:

"When a would-be borrower's main source of income is a play, Cole checks ticket sales, reads reviews and tunes into industry buzz to assess its chances for a continued run."

The story explains why this credit union is so focused on these thespians:

Because it's a credit union, it's a nonprofit owned by its members. Deposits fund the mortgages. It keeps its $35 million mortgage portfolio, rather than reselling the loans to investors, the common practice which contributed to the subprime mortgage mess.

Cole also explains his prudent due-diligence in making mortgage loans:

"We are determined to make our members homeowners, but we're not a charity," he said. "We must also protect our assets."

Click here for the complete story. That's a wrap!

Credit Unions = People

A scene on Capitol Hill in Washington, D.C., during one cold February morning warms my heart.

People, like me, lined the sidewalks to let lawmakers know warm-blooded Americans embody credit unions. "Purpose" is the difference between credit unions and banks.

People drive credit unions. Profits drive banks.

If the Word Fits, Wear It

I consider myself a life-long learner--or at least a person trying to improve my brain which otherwise went unfilled during elementary school daydreams. (“Little Guy? Little Guy? Hello…Earth to Little Guy.”)

Merriam-Webster emails me each morning a new “word of the day.” It’s like learning the dictionary one-word-at-a-time. Today’s word struck a credit union tone:

collegium • \kuh-LEG-ee-um\ • noun

: a group in which each member has approximately equal power and authority

Example Sentence:
Each paper published by the journal has been approved by a collegium of scientists.

Credit unions are not-for-profit, democratically controlled cooperatives, where each member gets an equal say--no matter how much money he or she has in the place.

So if the word fits, wear it.

Report: Credit Unions Are a Financial Services Haven

I thought the term "sub-prime" was some type of U.S.D.A. meat rating. That is until we all started hearing about "exotic loans," "teaser rates," and "mortgage meltdown." Ugh.

Perhaps I was unaware because my credit union shielded me from such nonsense--that's the word on the street, anyway. That's thestreet.com, which says "Credit Unions Give Banks a Run for Their Money." To quote:

"Credit unions are somewhat of a financial services safe haven in today's volatile consumer loan market. They avoided much of the sub-prime debacle by not offering the types of exotic loans and teaser rates that were widely available at the time."

Is that conclusion any surprise? Shouldn't be--since credit unions are ultimately only responsible to their owners, who collectively (and cooperatively) own the place.

TheStreet.com also pointedly notes that's in opposition to banks--which are responsible only to their shareholders.

TheStreet.com, in the posting titled "Credit Unions Give Banks a Run for Their Money," also points out how many credit unions are developing "innovative products to attract customers."

Among them: Credit cards, which the posting quotes Linda Sherry of Consumer Action as saying:

"You should be able to expect fairer terms from your credit union because [it] is owned by its membership, not a profit making entity. Not all credit union credit-card contracts contain arbitration clauses, for instance, which leaves members free to settle disputes through the court system, rather in front of someone who works for a private group often chosen by the bank."

Check it on TheStreet.com ...

Credit Union, Bank Difference on Magnet Board!

This little ditty is circulating on the Internets. It's from Young & Free--Common Wealth Credit Union in Canada. They apparently have a new under 25 spokesperson. Her name is Larissa.

Credit Unions Are Different; They Have 'Shares'

I like being a customer/member/owner of the institution where I borrow and stash my monetary fortune--what little I have, anyway.

Customers have money "on deposit" at the bank. I own "shares" at my credit union. Banks pay interest. Credit unions pay dividends.

Most deposits and shares are insured by the federal government, as explained in this story in thestreet.com.

Oooh, I feel so riiiich when I get dividends!

Credit Unions Have a Different Atmosphere

Credit unions, by offering lower service fees and better interest rates than banks, have carved out a niche for themselves in the financial services industry, according to a Nov. 26 article in a Delaware Business Journal.

While some credit unions may not have as expansive branch networks as banks, credit unions have an advantage in offering smaller, more consumer friendly options, the article said.

"It's a different atmosphere," said Patrick Mahaney, president/CEO of the Delaware Credit Union League, referring to the facts that unlike banks, credit unions are non-profits, have no shareholders, and have boards of directors composed of unpaid volunteers from the credit unions' membership.

Today Show: Credit Unions Best for Small Savers

Financial editor Jean Chatzky, on the Oct. 22 Today Show and in her MSNBC.com column, says credit unions are the best place to go if a consumer is a small saver or a car-loan borrower.

Chatzky, who is an editor-at-large for Money magazine, analyzes the "best banks for your buck." She says:

Credit unions are like not-for-profit banks. They have an even smaller, more individual presence than small banks. Some have a system of branches, some do not. But they're known for charging lower fees and offering higher rates of interest than banks. The catch is that you have to be a member to get a good deal.

Read--and watch--the segment online. Click here.

Credit union's motivation revealed during CEO interview

Credit unions exist to serve the financial needs of their members--there is no investor profit motive, no CEO stock options, and no sellout for big investor gains. It's all about member demands for products and services.

This point is reinforced in an Oct. 7 newspaper interview with a long-time Midwestern credit union CEO. The Dubuque, Iowa Telegraph Herald Executive Editor Brian Cooper asks Dupaco Credit Union CEO Bob Hoefer about the credit union's successful strategy:

TH: What's the next big thing coming?

BH: Brian, I have to tell you, whatever the members want is what we're going to try to do. I have no magic wand.

Share draft checking accounts. ATM cards. Home loans. Small business loans. Trust services. All guided by the members' desire.

It's a long interview, which you can read in its entirety here.

You shop locally--why not bank locally too?

Scanning the Internet over this morning's coffee, my mouth salivated at the mention of zucchini pancakes in a story in today's San Francisco Chronicle. But what really got my tummy growling was the story's buy-local perspective on belonging to a credit union:

While she flipped the zucchini pancakes, she laid out her best argument, "I say to people: So you shop at a farmer's market. You use alternative fuel or bike or take public transportation. But you still bank at Bank of America?" She laughed at the paradox of the small- is-beautiful crowd supporting a global corporation.

And for dessert:

"With banks, it's a business and all your money goes to make someone you don't know rich -- but with credit unions, all the money goes back into the community," Jessica explained. "It's people banding together to share the abundance."

Read Radical banking: You shop locally -- why not bank locally too?

Taxing credit unions would make economy worse, says publication

Credit unions provide a vital balance wheel for America's lending economy and can help soften the blow of a credit crunch. Ending their tax exemption is "almost sure to make things worse," said a columnist in the National Review Online Monday.

A senior fellow at the Competitive Enterprise Institute, discussed a Treasury Department report that includes a proposal to tax credit unions $19 billion over the next decade. He said that taxing credit unions would affect the economy. He writes:

Not only would the 90 million or so Americans who belong to credit unions end up paying this tax directly, but the tax would likely ripple through the economy, restricting already tight access to credit, and making just about everything a bit more expensive.

Wow! That would take a bite from my wallet! Read the entire column here.

Biz Journal: 'Banks chase wealth, credit unions follow mission'

Though bankers claim that credit unions have left their mission "people helping people" behind, the Aug. 13, 2007 edition of the Hartford Business Journal reported that isn't the case. According to data compiled by the Journal credit unions are more likely than banks to open branches in areas where people have middle to moderate income levels. Too bad this little story gem is by subscription only!