Some borrowers who are looking for trustworthy lenders are simply swayed by news out of the financial sector, news that documented at a rash of bank failures and subsequent efforts by banks to remain solvent by raising fees on customers and cracking down on customers who owe them money.
As banks and larger lending institutions have lost the trust of customers, a movement began to push those customers toward credit unions that say they are more customer-friendly and offer a better alternative to those who have debt. Credit unions say they charge lower fees than banks have fewer fees altogether. Those two differences in policy allow credit union customers to have a lower debt, all things being equal.
Of course, the only way someone can parlay a credit union into personal benefits is to belong to one. In some places, it can be difficult to be a credit union member.
Many credit unions are affiliated with churches, employers or other local or national groups. You must fall within that field of membership to join, although there are some national credit unions that accept members.
Credit Unions and Customer Service on Loan Contracts
It’s not just the highly publicized bonuses of national banking executives that are driving consumers toward local credit unions. Reports from The Wall Street Journal and others show that credit unions often outperform banks in customer service, giving borrowers or other customers more time at the counter and more individual attention.
It’s this kind of local touch that gives credit unions part of their contemporary appeal, and it’s particularly important in lending, where tough, impersonal lenders or aggressive, punitive lender actions can lead to a lot of stress and fear on the part of the borrower.
More of today’s American consumers have heard about some of the bad situations that others have gotten into with stringent or even disreputable lenders, and are looking for a place where their voice will be heard, and where they will be able to better negotiate any issues with a loan after it has been taken out.
More Advantages of Credit Union Lending
Loans from credit unions sometimes come with less stringent eligibility requirements, such as a good credit report. Other reasons why borrowers may want to partner up with credit unions are enumerated by the American Credit Union Mortgage Association, an organization pushing for more credit union involvement in American lending.
ACUMA mentions “consistent underwriting standards” and “a high level of trust” and major reasons for consumers to seek out a credit union for a loan. All of this speaks to the idea that credit unions can be more lenient and more communicative when it comes to dealing with existing debt.
Borrowers can evaluate the specific policies of local credit unions to understand whether one of these institutions will be a desirable lender.
About The Author
Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].
- McMillin, D. "Credit unions safer than banks?" Bankrate.com. (2012, February 25). Retrieved from: http://www.bankrate.com/financing/banking/credit-unions-safer-than-banks/
- McMillin, D. "Credit unions outperform banks." Bankrate.com. (2011, Nov. 26). Retrieved from: http://www.bankrate.com/financing/banking/credit-unions-outperform-banks/
- Kim, J. "Credit Unions: A Better Bet Than Banks?" The Wall Street Journal. (2010, June 5). Retrieved from: http://online.wsj.com/article/SB10001424052748704515704575283092306576952.html
- Bread, W. "7 Ways Credit Unions Are Better Than Banks." (U/S/ News and World Reports. (2011, Nov. 14). Retrieved from: http://money.usnews.com/money/blogs/my-money/2011/11/14/7-ways-credit-unions-are-better-than-banks