Credit Unions Cash In On Bank’s Troubles
Monday, March 5, 2012
California Credit Unions added 212,000 new customers last year, mirroring a national trend. That happened after a couple of years of no growth for the non profit banking organizations.
SAN DIEGO Banks have been bludgeoned by bad publicity linked to soaring fees, the foreclosure crisis and occupy protests. Nationally credit unions have added 1.3 million customers in the past year. That's twice the pace from the year before. The Credit Union Industry is confident the new customers will stay at credit unions for two reasons.
"People are frustrated enough to make a change and secondly we're doing our best to demonstrate that once they come to a credit union they won't have that feeling of frustration, so we hope to be able to build on that trend," said Henry Kertman of the California Credit Union League.
California Bankers acknowledge that credit unions have taken advantage of the current environment.
"That doesn't necessarily mean that bank customers are fleeing in mass numbers to credit unions," said Beth Mills of the California Banking Association.
Banks still dominate the financial scene, according to Mills. For profit banks hold nearly $13 trillion in assets compared to just under a trillion in credit union vaults. Bankers see the current turmoil as a symbol of what's going on in the economy.
"Banks really often times are a reflection of the community, and the businesses and the customers that live in those communities. So when our communities struggle, banks struggle as well," said Mills.
Consumer advocates say more bank fees are coming as large financial institutions try to replace revenue cuts by reforms put in place after the financial crisis.
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