BIRMINGHAM, Ala. (8/17/09)--Birmingham, Ala.-area credit unions were rated higher than their banking counterparts, according to recent reports from two Florida-based rating agencies. Fourteen of 39 metro Birmingham, Ala.-area credit unions received five stars, the highest rating. Thirteen credit unions received four stars, which indicates excellent or sound financial performance (The Birmingham News Aug. 14). Of the 27 area banks, two received five-star ratings and four received four-star ratings. Of the 39 credit unions, four received one or zero stars, while 11 of the 27 area banks received zero or one star. The ratings were issued by Bankrate.com and Bauer Financial. Credit unions are faring better than banks because they are avoiding risky residential loans, John Kottmeyer, Samford University economics professor, told the newspaper. Greg McBride, Bankrate.com senior research analyst, said Birmingham credit unions are performing better than others nationally. However, Birmingham credit unions are not immune to the nation’s economic troubles. Many credit unions are being hurt by loan defaults triggered by job loss. The jobless rate in Birmingham has doubled to 10.1% as of June, McBride added. Credit card, personal loan and small-business loan defaults also could hurt the nation’s financial institutions, and even credit unions won’t be immune, Kottmeyer added.