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Credit Union VS Major Bank
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Athens
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Nov 7, 2011, 03:49 PM
 
After reading a news story about protesting against the big banks by switching to credit unions I finally looked up what made them different. In the past I have always over looked them because they lacked features I liked with my major bank, like US Debit from my regular debit card. But after reading about how Credit Unions work I am now really thinking of switching most or all my banking to one. So who has used both and can tell of the difference in experiences?
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Thorzdad
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Nov 7, 2011, 04:08 PM
 
I've been with a credit union for over 25 years. I like it. It always has better car and personal loan rates than any of the big banks. The return on savings is about the same as you'd get at a big bank. Mine has online banking and bill pay, too. The only downside is that a credit union won't have very many branches or ATMs, compared to a BofA, for instance. But, most credit unions belong to national ATM systems and many of them reimburse your ATM fees up to a certain number per month.

If, on the other hand, you're looking for a financial institution that offers all sorts of complex and varied investment products, a CU may not be for you. Most offer a decent range of basic investment vehicles, but nothing like the big guys can offer. Which, frankly, might be a good thing for the average family.
     
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Nov 7, 2011, 04:20 PM
 
I use my credit union for almost everything; no fees, great service, good interest on checking, unlimited no fee transfers, a real no limit VISA with no interest, and it holds a much higher equity-capital ratio than any bank in my area. I use banks for services that my CU doesn't offer, but those are getting to be fewer and fewer. I talk with my CU about what services I need and usually they can work it out.
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Big Mac
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Nov 7, 2011, 04:24 PM
 
I've been considering closing my traditional "big bank" bank accounts and going with a combination of Schwab (which my family has always used) and a credit union. However, with a credit union the one thing I'm a little concerned about is whether or not they have comparable online access features. Online banking is very important to me. . .

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Nov 7, 2011, 04:24 PM
 
CUs are a much better way to go. I've been with mine for 3 years and wish I'd moved over sooner

And to slightly correct him on one point Thorzad made: if you join a CU that a member of the CU Service Center Network, you can go to any other participating branch (of which their are 4,000+ across all 50 states - even a iOS app to help you find the nearest one), you can use it like your local branch to make withdrawals, deposits, and payments. When I was in Denver visiting my Dad, I took a check he gave me for my B-Day and deposited it the same day. Just walked in and handed the teller the laminated card from my home CU with my acct. number, My Driver License, and the check and asked they put in checking, giving me $40 back in cash. within a minute the transaction was complete. no muss, no fuss, no fees or charges.

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Thorzdad
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Nov 7, 2011, 04:27 PM
 
Originally Posted by Big Mac View Post
...However, with a credit union the one thing I'm a little concerned about is whether or not they have comparable online access features. Online banking is very important to me. . .
You really just need to ask them. Most CUs have online banking. How extensive it is varies from CU to CU. Some are just as good as banks. Some smaller ones might just have online balance inquiry.
     
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Nov 7, 2011, 04:36 PM
 
Originally Posted by Big Mac View Post
I've been considering closing my traditional "big bank" bank accounts and going with a combination of Schwab (which my family has always used) and a credit union. However, with a credit union the one thing I'm a little concerned about is whether or not they have comparable online access features. Online banking is very important to me. . .
My CU has full online banking. I pay all my bills online through it and have complete online management. I also have direct deposit. The only time I ever go to a branch is when someone gives me a paper check, which is almost never.
What, me worry?
     
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Nov 7, 2011, 06:28 PM
 
     
Athens  (op)
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Nov 7, 2011, 10:13 PM
 
Im not worried about online banking, I was shocked to find my first to choices Vancity and Coast capital didn't support email interac yet. But I did find one that does and will be going in for a appointment on Thursday to discuss merging my 3 bank accounts at 3 banks into one setup with them.

The only thing I think I will miss is my ability to use my debit card for POS purchases in the US. Was nice not having to yank out cash at bank machines or bring US cash with me resulting in left cash when I got home.

I wonder if US and Canadian CU's have any kind of integration. Have any of you ever seen the Exchange logo on any machines?



WOW I didn't realize how popular Credit Unions where in both Canada and the US...
http://en.wikipedia.org/wiki/Credit_union#Canada
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Nov 7, 2011, 11:51 PM
 
I have worked for both banks and CUs, and I would take a credit union over a bank any day of the week. Cheaper/fewer fees, better loan rates, more personalized and less "cookie cutter" as far as qualifying for loans goes, and the service in general is usually more personal and responsive.
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Nov 8, 2011, 07:37 AM
 
With the variety of different organizations that can be called "banks," I find that credit unions are much more consistent and flexible. One of the major points in this area is that "membership" actually means "part ownership" with many CUs still referring to their savings accounts as "share" accounts, as in your savings represent ownership of shares in the credit union.

I've been a member of various credit unions for over 30 years because they have been where I needed financial services, and they have been much more "local" and less corporate. Just what I needed. I have financed our last 5 cars through my current credit union.

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Athens  (op)
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Nov 8, 2011, 02:25 PM
 
I've settled on these guys just because they offer Email Interac which my first 2 choices which are also the largest CU in BC don't offer lol

https://www.wscu.com/

I go in on Thursday to hear all the goodness they offer.
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Big Mac
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Nov 8, 2011, 04:32 PM
 
What is Email Interac Athens? An email support ticketing system?

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besson3c
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Nov 8, 2011, 05:17 PM
 
If everybody seems so unanimously in support of CUs (as I am too), I wonder why the big banks are still as big as they are? I realize my circle of friends and online acquaintances is a very small sample size, but...
     
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Nov 8, 2011, 05:26 PM
 
Originally Posted by besson3c View Post
If everybody seems so unanimously in support of CUs (as I am too), I wonder why the big banks are still as big as they are? I realize my circle of friends and online acquaintances is a very small sample size, but...
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Big Mac
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Nov 8, 2011, 05:28 PM
 
At least in the US many people used to bank with smaller regional banks, until those banks got swallowed up by the international giants. Now many are looking for alternatives to the giants, but switching financial providers is something most people probably don't like doing too much. As for why they chose banks over credit unions in the first place, I think there is often the perception that credit unions aren't as reliable or fully featured as banks, but that perception is definitely starting to change.

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Nov 8, 2011, 06:16 PM
 
Originally Posted by Big Mac View Post
What is Email Interac Athens? An email support ticketing system?
Here in Canada, Interac has a feature where you can send money "to" another person's email address, via your online banking. Provided that person has online banking that supports this feature (which means all our major banks and apparently some credit unions now), they get an email telling them they've been sent money, click on a link to sign into their online banking, accept the transfer, and the money gets sent from your account to theirs.

It's basically like Paypal, except it costs $1.50 to send amounts up to $1000 or more I believe. There may be total amount restrictions on it as well, at some banks. Anyway, it's awesome, and it's generally what everyone up here uses - I only use Paypal when I have to deal with you stone-age Americans.

Anyways, I'm with one of Canada's major banks, and I have trouble imagining that a credit union would offer superior services, but I also have a personal connection so I can take advantage of that. Athens, what advantages in particular have you found that credit unions can provide to you, in terms of saving you money?
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Big Mac
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Nov 8, 2011, 10:08 PM
 
Oh, that's pretty cool then. I would have chosen a better name though. Email Interac tells me nothing about it being a payment system. American banks have been starting to do the same things, but there's no national standard between them. There's Chase QuickPay for example, but it's limited to other Chase customers.

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Athens  (op)
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Nov 9, 2011, 01:29 AM
 
Originally Posted by Big Mac View Post
Oh, that's pretty cool then. I would have chosen a better name though. Email Interac tells me nothing about it being a payment system. American banks have been starting to do the same things, but there's no national standard between them. There's Chase QuickPay for example, but it's limited to other Chase customers.
Interac is our debit system. Every Canadian knows what Interac is so never thought about it. When you go to any bank machine and pull out money with your debit card its through Interac. When you do POS purchases at the store with debit cards its through Interac. Out debit cards are just that debit cards that debit our bank accounts. They are not both credit and debit cards like yours or check cards as I have herd them called. Anyways Online Interac is the ability to pay for purchases with your debit card from stores that accept and Email Interac is emailing money between people. My old place I had my bank account set to email rent every first of the money to my landlord. Current place is run by a dinosaur company, I had to actually order cheques for the first time in years. When I need to give a friend cash or some one owes me money most of the time we just use email. Last time I was in NY the friend i was with wanted to pick up a Sony Laptop. His CC was to full to support the purchase and because of the frees related to withdrawing that much cash (5.00 for every $200) I stuck it on my credit card. When we got back to the hotel he sent emailed me the $900 which takes about 30 minutes to process and I paid it to my Credit Card that same night.

Interac
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Athens  (op)
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Nov 9, 2011, 01:47 AM
 
Originally Posted by ShortcutToMoncton View Post
Athens, what advantages in particular have you found that credit unions can provide to you, in terms of saving you money?
Originally I ignored Credit Unions and it was because they lacked stuff like online banking or email interac or US bank machine ability and POS. Whats nice about Washington State is I can use my debit card at POS in most places in Washington so I don't even have to pull out US cash for things.

I started looking at what Credit Unions was as part of the Occupy Protests another group has formed for switching to Credit Unions as a form of protest against wall street and the big banks. Now personally I don't have a grip with our banks per say because they are in a different ball park of the US banks but I still decided to look into credit unions.

I like what I see. I wish I had looked at them before. I like how its community based. Every member is a share owner and can vote on things. I like how instead of being profit driving to make some one else rich they instead offer lower fees and some even pay you back out of the profits. The one im looking at donates its profits to the community instead of pay outs to members. Im ok with that and I like that. So what started out as interest for a way to protest a system I don't like very much turned into a interest and a like of the concept. The hard part is finding a Credit Union that works for me. The features and options vary greatly between them. IE 2 of the biggest in BC, Vancity and Cost Capital don't support Email Interac. Westminster does.

Switching is a pain but if I can get everything I have which is with 3 banks into one, and for cheaper prices its worth it. The bonus is the profits they make also help the community. That isn't that bad. I just don't know about closing all my regular bank accounts down. I will probably keep my Scotia Visa for the scene points. And because the Credit Union bank cards are not as US friendly.
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Athens  (op)
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Nov 9, 2011, 01:49 AM
 
PS im on heavy pain killers at this moment, I appologise for broken language and I am not in a state of mind to fix it. Think I will just go to bed. night all.
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Nov 9, 2011, 02:11 AM
 
Been using a Credit Union for a few years and since the bail out, exclusively. I don't like my tax dollars bailing out an irresponsible business model only so they can continue doing the same crap.
     
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Nov 10, 2011, 01:35 PM
 
Originally Posted by besson3c View Post
If everybody seems so unanimously in support of CUs (as I am too), I wonder why the big banks are still as big as they are? I realize my circle of friends and online acquaintances is a very small sample size, but...
I've never been with a credit union, because their options were never as robust for my preferences as big banks and other financial institutions.

1) People talk about fees but I keep enough money in the account that all my fees are waived anyway. So going to a credit union offers no advantage in that regard. Furthermore, my bank account offers stuff like free personalized cheques, free CAD$ and US$ bank drafts and money orders/certified cheques, and free 1% cash back Visa Gold (with free car rental insurance). I also get a free safety deposit box but I've never actually bothered with that.

2) My bank has branches everywhere in Canada so it's really convenient. I can go just about anywhere in Canada and take my money out for free. Unlimited transactions with no transaction fee from my bank ATMs. Banks that support my bank card are everywhere in the US too, albeit with some transaction fees. Going overseas with my bank card is OK too, although harder.

3) I got my current mortgage from a big bank, a different one, because the rate was much better than what anyone else was offering, including credit unions.

4) I got my previous mortgage from a small lender because they had the best rate. That small lender was not a credit union, but was a dedicated mortgage lender that actually was owned by yet another big bank.

5) I had opened a Citizens Bank of Canada high interest savings account, only to see it close a few months later. They were operated by Vancity, a credit union. That definitely doesn't inspire confidence, and Vancity is a large credit union too.

6) I have an unsecured line of credit with an online bank. Their rate was the best at the time, and it's still better than most personal loan rates so if I were to need an unsecured loan, I'd just use my line of credit. However, I do neither, because I have a home equity line of credit at prime + 0.5, which is better than I'd be getting for any unsecured personal loan and is better than the rate for my unsecured line of credit. So, I haven't gotten an unsecured personal loan or used my unsecured line of credit in years.

7) I do use email funds transfers, but admittedly I don't do it very often.

BTW, my home branch is in Western Canada, and I got the account back in the 80s. I haven't lived in Western Canada for any length of time since the 90s, but my home branch is still there. I've been doing everything online or at local branches in Toronto ever since.
( Last edited by Eug; Nov 10, 2011 at 01:54 PM. )
     
besson3c
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Nov 10, 2011, 01:55 PM
 
Yeah, but you're in Canada which has a much healthier banking system than ours...
     
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Nov 10, 2011, 02:03 PM
 
Are you suggesting that credit unions in the US are innately healthier than big banks in the US? Cuz if you think that I'm not sure I'd agree.

To me, a credit union in some ways is arguably just a small bank with some organizational differences. They'd be great if they were truly cheaper to borrow from, but in my case the best rates have always been from non-credit union lenders, and I find dealing with the big banks simply is more convenient.

ie. In my case big banks are more convenient and are not necessarily more expensive (and often are cheaper), so I just don't see the advantage to going with a credit union. The choice of a credit union here would be more of a philosophical choice than anything, cuz it sure wouldn't save me any money.
     
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Nov 10, 2011, 02:23 PM
 
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Athens  (op)
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Nov 10, 2011, 03:01 PM
 
Originally Posted by Eug View Post
Are you suggesting that credit unions in the US are innately healthier than big banks in the US? Cuz if you think that I'm not sure I'd agree.

To me, a credit union in some ways is arguably just a small bank with some organizational differences. They'd be great if they were truly cheaper to borrow from, but in my case the best rates have always been from non-credit union lenders, and I find dealing with the big banks simply is more convenient.

ie. In my case big banks are more convenient and are not necessarily more expensive (and often are cheaper), so I just don't see the advantage to going with a credit union. The choice of a credit union here would be more of a philosophical choice than anything, cuz it sure wouldn't save me any money.
Thats the reason I'm looking at switching is for philosophical reasons. But at the same time I am liking what I see as well. If I get everything I am asking for I will be saving money in the switch. My appointment is in a few hours. VanCity was originally my first choice before i found them to limited.
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besson3c
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Nov 10, 2011, 03:11 PM
 
Originally Posted by Eug View Post
Are you suggesting that credit unions in the US are innately healthier than big banks in the US? Cuz if you think that I'm not sure I'd agree.

To me, a credit union in some ways is arguably just a small bank with some organizational differences. They'd be great if they were truly cheaper to borrow from, but in my case the best rates have always been from non-credit union lenders, and I find dealing with the big banks simply is more convenient.

ie. In my case big banks are more convenient and are not necessarily more expensive (and often are cheaper), so I just don't see the advantage to going with a credit union. The choice of a credit union here would be more of a philosophical choice than anything, cuz it sure wouldn't save me any money.

There are also philosophical risks in terms of risk assessment, debt, and investment strategy. Credit Unions tend to be far more conservative.
     
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Nov 10, 2011, 03:45 PM
 
Originally Posted by besson3c View Post
There are also philosophical risks in terms of risk assessment, debt, and investment strategy. Credit Unions tend to be far more conservative.
Well the one time I got an account with an online bank run by a credit union, they closed it a few months later. It turns out their aggressive approach to winning new customers and their online business plan simply was unsustainable. They were offering much higher interest rates than the big banks.

So here, the big banks had the more conservative approach, despite being much, much larger.
     
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Nov 10, 2011, 03:53 PM
 
Originally Posted by Eug View Post
Well the one time I got an account with an online bank run by a credit union, they closed it a few months later. It turns out their aggressive approach to winning new customers and their online business plan simply was unsustainable. They were offering much higher interest rates than the big banks.

So here, the big banks had the more conservative approach, despite being much, much larger.

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Eug
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Nov 10, 2011, 04:04 PM
 
Yes, I guess I am, but my point here is that being a credit union doesn't make it inherently safer. The investment strategies they adopt may be safer, or they may be more aggressive. It really depends on the individual organization. Not all banks are the same, and not all credit unions are the same.

Ultimately, I don't really care that much, because all my deposits with big banks are insured up to $100000. Interestingly credit union accounts are not insured by the CDIC, but they are usually insured by other organizations.

So, I go where I get the best rates and the best services, and so far for me that's been with the banks, not credit unions.
     
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Nov 10, 2011, 04:26 PM
 
Originally Posted by Eug View Post
Are you suggesting that credit unions in the US are innately healthier than big banks in the US?
FDIC insurance makes this mostly unimportant for the average depositor. If you've got more than 100k in cash you can afford to maintain multiple accounts at multiple banks. So the issue is macroeconomic heath.

Originally Posted by beb View Post
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Nov 10, 2011, 04:38 PM
 
Originally Posted by BLAZE_MkIV View Post
FDIC insurance makes this mostly unimportant for the average depositor. If you've got more than 100k in cash you can afford to maintain multiple accounts at multiple banks.
I agree, which is why I don't really care where my money sits, as long as it's safe and convenient, and the institution provides the services I want at good rates.

So the issue is macroeconomic heath.
Well, I don't see how credit unions necessarily improve macroeconomic health. Canada is dominated by big banks and has a relatively healthy banking system. In a country with banking problems, moving everyone to credit unions isn't gonna solve everything.
     
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Nov 10, 2011, 04:45 PM
 
It's not supposed to be a solution, it's supposed to make big banks earn our money.
     
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Nov 10, 2011, 05:12 PM
 
Originally Posted by Eug View Post
I agree, which is why I don't really care where my money sits, as long as it's safe and convenient, and the institution provides the services I want at good rates.


Well, I don't see how credit unions necessarily improve macroeconomic health. Canada is dominated by big banks and has a relatively healthy banking system. In a country with banking problems, moving everyone to credit unions isn't gonna solve everything.
Actually this isn't true. I was shocked in my research about Credit unions that Canada has the highest per capital usage of Credit Unions in North America. In British Columbia, 46 credit unions with assets of $48 billion, serve 1.7 million people alone. Out of a province of 4.5 Million that is a big part of the population. Our banks appear big because we only have a few major national ones. The US banking sector is comprised of many private banks. If the Royal Bank and Bmo had been allowed to merge in 1998 it would have been bigger then the biggest US banks and been one of the largest in the World. Our banking is consolidated to 6 major banks so it appears they are big. But when you factor in all the credit unions in the country combined it makes the big 6 seem a lot smaller.

At the end of the day, if I am paying less I am happy. I like the idea of the credit union profits going back into the community.
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Eug
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Nov 10, 2011, 06:49 PM
 
Originally Posted by besson3c View Post
It's not supposed to be a solution, it's supposed to make big banks earn our money.
But some are. So far I've had better rates, better services, and more convenience with the big banks. In contrast, I've been less than impressed with the credit unions around here. Like I said, I don't really care where my money sits as long as my money is insured. The one time I went with a credit union, they had to shut themselves down because they overreached themselves.

Furthermore, "personalized service" is a very nebulous term and both credit unions and banks can provide great... or lousy... personalized service. With my main bank, I used to just email them, and they do everything over email. Run out of cheques? I'd email them "Please send me 50 cheques starting at number xx" and two weeks later they'd be in my mailbox. Nowadays they prefer not doing things over email, but luckily they have online options.

For my current mortgage, I found the big bank mortgage rep. on a hot deals forum. We got in touch via private messaging on the forum and then he answered my questions over email, then by phone, and then in person at the branch. I don't think I've ever had more personalized service anywhere. I continue to maintain contact with him via email and/or phone when necessary.

Now, I will say that I have more funds than average that I keep in my accounts which may be why some banks might be more friendly to me than some others. It might be true if I couldn't take advantage of waived fees I might be more inclined to go with some credit unions which offer lower fees. However, when I was a student, I still was with the big banks, because they offered very generous student accounts, many other lenders wouldn't match. eg. Near-prime unsecured 5-digit $ loans.

Originally Posted by Athens View Post
Actually this isn't true. I was shocked in my research about Credit unions that Canada has the highest per capital usage of Credit Unions in North America. In British Columbia, 46 credit unions with assets of $48 billion, serve 1.7 million people alone. Out of a province of 4.5 Million that is a big part of the population. Our banks appear big because we only have a few major national ones.
? 1.7 / 4.5 is about a third, and that's in aggregate. Furthermore, Vancity is the biggest credit union in Canada AFAIK, which likely makes BC a bit credit union heavy compared to some other provinces. And they're the ones that screwed up with their Citizen's Bank of Canada, having to close all those accounts they opened up just a few months prior in their overeagerness to expand.

Vancity only has assets of about $15 billion. Nothing to sneeze at, but not exact huge either. OTOH, Royal Bank for instance has assets of about $750 billion. That's fifty times the size of Vancity. So like I said, Canada is dominated by big banks.
( Last edited by Eug; Nov 11, 2011 at 01:46 PM. Reason: billion not million)
     
Athens  (op)
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Nov 11, 2011, 02:18 AM
 
750 Million :O

You are comparing one to one which isn't fair when comparing banking as whole. Desjardins alone has 172 Billion in assets making it the 6th largest bank in Canada. Add to that 400 other Credit Unions. Vancity has 12 Billion in Assets.
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Nov 11, 2011, 01:56 PM
 
Originally Posted by Athens View Post
750 Million :O

You are comparing one to one which isn't fair when comparing banking as whole. Desjardins alone has 172 Billion in assets making it the 6th largest bank in Canada. Add to that 400 other Credit Unions. Vancity has 12 Billion in Assets.
Huh? Since when is this about fairness? These are bullet points about banking in Canada.

Anyways, my original point was that the Canadian system is dominated by big banks, and that's absolutely true. Between the big 5, they have about $2.6 trillion in assets. If you try to claim that Canada's banking system isn't dominated by the big banks, you're either just fooling yourself, or else trying to mislead.

Now, like I said there's nothing wrong with wanting to go with a credit union, but that doesn't mean the big banks don't dominate.
     
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Nov 11, 2011, 07:30 PM
 
This thread seems to be a false dichotomy. You can keep accounts open at both, in fact it's advantageous to have alternatives at the ready in case of the unexpected. I have accounts at like 30 different banks and credit unions. I have only ever had to close 2 to avoid inactivity fees (Citi and Key). There is no reason not to try them out ad nauseam until you stumble across one that tickles your fancy.
     
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Nov 12, 2011, 02:06 PM
 
Despite our "best banking system in the world" claims we still gave banks a similar bailout to the US, I believe. Sooooo....
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Athens  (op)
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Nov 12, 2011, 04:13 PM
 
Our banks never got any bail out.

@Eug

If you compare any one major bank like Royal vs any one credit union like Vancity its no contest at all. But its not a true statement to say our banking system is dominated by the big 5 when your comparing "Regular Banks" vs "Credit Unions" since we have over 400 credit unions.

Yes the regular banks are still larger then all the credit unions, but its not a landslide victory. The credit unions are a very large chunk of our banking system.

@uncle Skeleton I wouldn't say its a false dichotomy (and I had to look up what that was). On the surface at the end of the day they are the same, but under the hood the way they operate are very different.

40,000 join credit unions in bank-dumping protests - Nov. 8, 2011

Apparently 40 000 people joined Credit Unions on Move your Money day. When I was asked what made me consider a Credit Union when I signed up at Westminster Savings, I said it was partly the protests against the big banks that made me look into it. She said that day alone she had 4 other people open up accounts for the same reason.

At the end of the day though it really is the concept of community sharing of the profits, the programs that Credit Unions sponsor that made switching a good reason. The closing down of my regular bank accounts are more about the protest while the joining a credit union is more of a philosophical reason.
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Nov 12, 2011, 04:19 PM
 
What I meant was that you don't have to choose, you can do both. Use the best features of each, ignore the rest. It's not like choosing a religion, it's more like choosing crunchy or smooth peanut butter. If you can't decide, then just get both and move on with your life.
     
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Nov 12, 2011, 04:37 PM
 
Originally Posted by Athens View Post
Our banks never got any bail out.
Perhaps not in the strict sense of the word...I'm surprised you of all people aren't in on the "we bailed out our banks too but it's all hush-hush" theory
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Nov 12, 2011, 04:48 PM
 
Originally Posted by Uncle Skeleton View Post
What I meant was that you don't have to choose, you can do both. Use the best features of each, ignore the rest. It's not like choosing a religion, it's more like choosing crunchy or smooth peanut butter. If you can't decide, then just get both and move on with your life.
Ah ok that make sense.


Originally Posted by ShortcutToMoncton View Post
Perhaps not in the strict sense of the word...I'm surprised you of all people aren't in on the "we bailed out our banks too but it's all hush-hush" theory
Can you elaborate?
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Nov 12, 2011, 08:54 PM
 
No. You can presumably use google as well as the rest of us - go ahead. It's pretty irrelevant to this thread on credit unions vs. major banks, and I don't wish to derail.
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Nov 12, 2011, 11:32 PM
 
Originally Posted by Athens View Post
If you compare any one major bank like Royal vs any one credit union like Vancity its no contest at all. But its not a true statement to say our banking system is dominated by the big 5 when your comparing "Regular Banks" vs "Credit Unions" since we have over 400 credit unions.

Yes the regular banks are still larger then all the credit unions, but its not a landslide victory. The credit unions are a very large chunk of our banking system.
The credit unions are not insignificant, but the Canadian system is dominated by big banks. That's just the reality of the Canadian system, whether you like it or not.

Put it this way... The desktop world is dominated by Windows PCs. That's a simple fact. However, that doesn't mean we can't like Macs. Same with big banks vs. credit unions. Big banks dominate here in Canada, but there's nothing wrong with using or liking a credit union.

Originally Posted by Uncle Skeleton View Post
This thread seems to be a false dichotomy. You can keep accounts open at both, in fact it's advantageous to have alternatives at the ready in case of the unexpected. I have accounts at like 30 different banks and credit unions. I have only ever had to close 2 to avoid inactivity fees (Citi and Key). There is no reason not to try them out ad nauseam until you stumble across one that tickles your fancy.
Not much advantage to have 30 different accounts at different banks and credit unions, unless you have $100000 in each of them.

In fact, I think that'd be a complete headache.
     
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Nov 13, 2011, 01:51 PM
 
Originally Posted by Eug View Post
Not much advantage to have 30 different accounts at different banks and credit unions, unless you have $100000 in each of them.

In fact, I think that'd be a complete headache.
Turns out it's not. I was only showing that there's no impediment to opening new accounts, as someone like me can go way overboard with no ill effects. The point isn't that you can have 30, it's that you can easily go through 30 until you find what works best. Then keep as few as you want.
( Last edited by Uncle Skeleton; Nov 13, 2011 at 03:53 PM. )
     
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Nov 21, 2011, 02:47 AM
 
I work as an assistant manager for a Credit Union and here are some things I want to bring to the table with my knowledge and experience.

Most financial institutions want the full relationship, i.e. checking, savings, direct deposit, debit cards, loans, etc. They have started charging checking account fees if you don't have a certain dollar amount in the account or if you don't have direct deposit or both. This really started becoming the norm after the US congress passed the law of the debit card interchange earlier this year. Banks are losing out on billions of dollars from merchants that have to pay them when a customer swipes their debit card to purchase something. They're trying to offset some of that lost income so they can retain profit for their shareholders. When word got out that B of A, Chase, Citi and Wells Fargo were testing monthly fees on customers for just using a debit card, the consumers had enough and pushed back by changing their accounts on Bank Transfer Day back on Nov 7.

Some tidbits about my credit union...

- It's a full fledged financial institution. We have pretty much everything a big time bank has, including all types of loans, credit cards, investments, insurance, bill pay, online banking, etc.
- Checking is free. No minimum qualifications needed.
- Deposit and loan rates are just as comparable, if not better than a big bank.
- You can us over 28,000 ATMs nationwide (including any other credit union ATM and 7-11 ATMs) without getting charged.
- There are what we called "Shared Branches" that can do transactions for you if you're travelling out of state. Go to CU Service Centers Shared Branching - Your Credit Union, Multiplied! and just type in a city and state you're travelling in.
- Your deposits are insured by the NCUA up to $250K, which is just as safe as the FDIC for banks


Here's the thing. If you don't maintain the minimum qualifications to keep your account from getting feed, you're going to be paying for it and will likely be frustrated with the financial institution you're doing business with. As Eug said, he's got an account with his bank that he's completely happy with. He does what he needs to maintain the minimum from getting feed and he knows his money is safely insured. As long as you can sustain that and be happy with the service, why not do business with them, especially if it's convenient for you?

You have to look at from the eyes of a consumer benefiting from the relationship. Regardless if it's a bank or credit union, how are you going to benefit from the relationship?
     
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Nov 21, 2011, 01:43 PM
 
Originally Posted by KCrosbie View Post
Most financial institutions want the full relationship, i.e. checking, savings, direct deposit, debit cards, loans, etc.
I've long wondered, why do they want this? Are they trying to profile us and profit from the "full picture" of our complete financial psychology? In the same vein of asking "how are you going to benefit from the relationship," I am left wondering how does having the "full relationship" benefit the bank, in and of itself.
     
Athens  (op)
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Nov 21, 2011, 03:04 PM
 
They just want all your business. They make money off of most of it.

Savings account, your money in the bank as a loanable source. More savings the bank holds on to the more money they have that can be loaned out. Direct Deposits, they charge a fee to the depositor, thats more income, debit cards they make on transaction charges charged to retailers (at least in Canada I assume its the same in the US) its why you will some times see min purchase requirement for debit. Loans, again they are making money off ya.

Its no different then how the cable companies give you a better price for bundling services like TV, Internet, Phone together. I wouldn't be surprised if profiling is another reason too.
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