CHICAGO (10/24/11)--The Credit Union National Association (CUNA) helped Chicago Tribune
columnist Gregory Karp choose the "champs" in a contest between big banks against credit unions and other smaller institutions.
Karp turned to Mike Schenk, CUNA vice president of economics and statistics, as well as a senior financial analyst at Bankrate.com
, a financial editor at Consumer Reports
, and a personal finance analyst for MoneyRates.com
to provide information to help him judge the champs in nine banking areas.
Noting that the Occupy Wall Street movement has "renewed sour feelings toward big financial institutions that were deemed too big to fail" and that "received bailout loans from Joe and Jane taxpayer," Karp wrote that "small banks, online banks and credit unions are taking the opportunity to put up their dukes and take a few swings at megabanks while they're still punchy from the bad publicity."
Here's how he called the game.
- Fees. "This is an early knockdown and a round won by small banks, online banks and credit unions. Three-quarters of large credit unions offered free checking accounts, with no strings attached. Just 45% of banks did. Karp reported.
- ATM access. Big banks have an advantage, "but smaller competitors today are able to join ATM networks that allow customers to use a variety of teller machines without charge."
- Branch networks. Some credit unions have sharing agreements, but big banks have nationwide networks.
- Customer service. Credit unions are especially known for personal service--"a huge comeback round for the little guys."
- Ownership. "Nonprofit credit unions, specifically, win this round." Karp pointed consumers to asmarterchoice.org to find out how to join a credit union. Schenk noted that credit unions "take what the stockholders would have gotten and then give it back to our members (in the form of consumer friendly products and services)".
- Financial products. Credit unions and smaller banks have expanded their lines but a large bank may offer more options.
- Technology. Having advanced offerings such as mobile banking and person-to-person payments are "largely the domain of large banks" although credit unions and small banks offer online account access and perhaps electronic bill paying.
- Rates. Credit unions and smaller institutions pay higher rates on savings and offer lower-rate loans. But compare rates.
- Safety. This is a draw because both bank and credit union deposits have federal insurance up to $250,000.
Karp advises that "if you're angry about fees and bailouts, or you like personalized service and generally better rates, seek out a community bank or credit union." For technology, breadth of products and convenient ATM/branches, a bigger bank might be better.
The article also appeared on WGNradio.com
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