The State of Credit Unions
In a world free of debit card fees
While some national banks are testing monthly debit card fees in select markets, others are setting up to implement them at various times throughout the fall. Traditional banks charging debit card fees are receiving a backlash from their customers.
This isn’t helping the debate against Wall Street for the economic woes of the last two years. Regardless of what side of the argument you agree with, credit unions would argue that it’s just not worth it. They would rather keep money in the pocketbooks of members.
“As a not-for-profit, member-owned, community-based credit union, we answer to our members, not to shareholders or Wall Street,” said Debra Schwartz, president and CEO of Mission Federal Credit Union. “One of the many benefits of credit unions is that we are able to pass those savings onto our members in the form of lower or no fees.”
Debit cards are considered to be more secure than cash and checks, oftentimes offering customers additional protection on their purchases.
“We see this as a benefit for our customers and SDCCU,” said Teresa Halleck, president and CEO of San Diego County Credit Union. “One of the big bank CEOs recently stated that the job of a traditional bank is to make a profit for its shareholders. Unfortunately, this is not in the best interest of the customer. SDCCU’s focus is to offer low-fees and competitive rates to help our customers succeed financially.”
So, why doesn’t every bank think this way?
Credit unions are member-owned financial institutions who share a mission of “people helping people” and financial education, explained Mission Fed’s Schwartz. This sets credit unions apart from for-profit financial institutions from both a member and community impact standpoint.
SDCCU’s Halleck agrees: “Unlike most other financial institutions, credit unions do not issue stock or pay dividends to outside stockholders. Instead, earnings are returned to members in the form of lower loan rates, higher dividends on deposits and lower fees.”
And the big bank versus credit union difference doesn’t stop there.
“SDCCU makes a difference in the community by supporting more than 75 nonprofit organizations, including many health and human service agencies,” said Halleck. “These nonprofits provide much-needed services and enhance the quality of life for hundreds of thousands of Southern Californians each year.”
But, each credit union has their passion areas.
Mission Fed supports hundreds of local educational nonprofits, including raising $40,000 each year to benefit local Alzheimer’s patients and families, earning them the prestigious 2011 Reagan-Thal Legacy Advocacy Award.
This is where credit unions really shine — their community impact.
Mission Federal Credit Union has several notable programs, highlighting its award-winning community partnerships. For example: the Mission 4 R Schools donation program which donated more than $15,000 in the past two years to more than 300 local schools; its Mission 2 $ave Credit Union, the only on-site banking or credit union in-school program at 29 local schools, with 1,415 student participants, who have collectively saved more than $192,000 in the past two years. Additionally, Mission Fed hosts an annual “I’m Thankful for My Teacher” student-to-teacher campaign with Cox and Junior Achievement, which has delivered 17,000 personalized and heartwarming thank you cards to teachers over the past three years.
“Perhaps our most unique and highest impact financial education campaign is our first-ever Mission Fed Student Credit Union Shop at Junior Achievement BizTown,” said Neville Billimoria, senior vice president and chief advocacy officer for Mission Federal Credit Union. “The ‘mini-Mission Fed branch’ serves an incredible 12,000 local fifth grade students each year with a six-week in-class business skills and financial education training curriculum, in addition to the unmatched real life experience on-site at BizTown ‘running’ the businesses and government of San Diego for a day.”
SDCCU sponsors the annual San Diego County Credit Union Poinsettia Bowl.
“This event gives back to the community by raising funds for the Make-A-Wish Foundation of San Diego,” said Halleck. “In 2010, SDCCU was able to present the Make-A-Wish Foundation of San Diego with a donation of $53,000. We are proud to have this unique charitable relationship with the Make-A-Wish Foundation of San Diego and the San Diego Bowl Game Association.”
Recently, 22-year-old Molly Kathpole of Washington, D.C., and a Bank of America customer, started a petition drive against the $5 a month fee. She has already attracted more than 200,000 signatures. She was interviewed by CNN’s Erin Burnett on her show “OutFront” and vowed to switch to a credit union.
There’s something to be said for keeping money in our community and in the hands of its members — San Diegans.