Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
IMotley FoolI analysis Fin crisis hit banks harder than CUs
NEW YORK (11/28/11)--An analysis of the number of failures by financial institution type conducted by The Motley Fool backs up credit unions' argument that credit unions fared better than commercial banks during the 2008 financial crisis and the sluggish economy since.

The Motley Fool looked at commercial banks insured by the Federal Deposit Insurance Corp. (FDIC) and at credit unions insured by the National Credit Union Administration. Its conclusion: "While negatively affected by the crisis, credit unions did not experience the sort of radical departure from their baseline rate that banks did," said the Fool (Nov. 22).

The Motley Fool is a well-known website that offers advice and analysis on money and finances.

It noted that a key narrative of the recent Bank Transfer Day events was "to pit normally sleepy credit unions against the big banking industry. Credit union skeptics are quick to point out the fact that credit unions hardly went unscathed during the 2008 financial crisis, yet credit union advocates argue that their institutions fared better than commercial banks." 

The Fool asked if credit unions' claims were backed by numbers, and concluded they were. In 2008, the rate of commercial bank failures (0.60%) was almost triple that of credit unions (0.23%), said the publication.  In 2010, banks' failure rate increased to 1.86%, nearly  five times the credit union rate of 0.40%.

"While the sluggish economy seems to have also negatively affected credit unions, they experienced nowhere near the surge of failures seen in the commercial banking sector," said the Fool.

The publication noted a similar pattern for "problematic" institutions.
Other Resources

RSS print
News Now LiveWire
.@SenatorBegich says @TheNCUA risk-based cap. plan attempts 2 solve problem that does not exist, at expense of those served by CUs. Watch NN
45 minutes ago
Target wants stay of discovery in class action suits in data security breach; plaintiffs disagree that it's needed http://t.co/GHqz2S4u5g
1 hours ago
New HUD Sec'y Julian Castro gets warm send-off from San Antonio's @alamofcu MT Thanks for all the hard work. http://t.co/peb8x4GSRq
1 hours ago
.@CUANYtweets initiates call to action to Gov. Cuomo to sign state-chartered #creditunion FOM bill
1 hours ago
.@MountainAmerica #creditunion CEO helps TV audience understand credit scores #NewsNow http://t.co/makbsIIdzn
1 hours ago