MADISON, Wis. (4/9/13)--"People are really waking up to the powers of credit unions," Paul Gentile, Credit Union National Association executive vice president, strategic communications and engagement, said during an appearance Sunday on MSNBC's Your Business.
"Last year two million people opened accounts at credit unions," Gentile said. "There's a credit union for everyone."
Gentile directed viewers to aSmarterChoice.org to find a credit union they are eligible to join.
Gentile explained the structural difference between credit unions and banks. "As a credit union member, you're an owner of that institution," he said. "Unlike banks we don't have shareholders to please. We don't have to drive big profits. It's a different model; it's a cooperative model. We're not-for-profit financial cooperatives."
Through that cooperative structure, credit unions can offer lower rates on products and services than banks can, Gentile said. And they are lending. While banks tightened credit during the recent recession, credit unions increased lending, he added.
Credit unions also continued lending to their small-business members, Gentile said. "Our average business loan is about $215,000," Gentile said. "A lot of times those are loans the banks just don't want to touch," he added. "They're just not profitable enough for them. But we'll do those loans."
Among the reasons credit unions make those loans is because they know their members better than banks know their customers, Gentile said. "We will take more time with them and understand the fundamentals about what is driving the need for credit and liquidity," Gentile said. "At banks they run a risk score before even talking to you. We have lots of stories where people have been turned down by banks and they get a small $60,000 loan [from a credit union] that has turned into a big business."
CUNA and credit unions are urging Congress to pass legislation to raise credit unions' member business lending cap (MBL) to 27.5% of total assets, up from 12.25%. Doing so would generate $14.5 billion available for MBLs--and increase jobs by 158,000 in the first year without costing the taxpayer, according to statistics from CUNA.