Credit Unions in the USA

August 12, 2013 in Credit Unions

A recent article in the Los Angeles Times suggests that the major banks in the USA are feeling the heat from credit unions, who are providing a genuine alternative for customers who do not want to deal with
the larger banks.,0,1944326.story

The article says “Credit unions have been snatching customers from banks amid consumer frustration over rising fees and outrage over Wall Streets’ role in the financial crisis”.  Credit union membership has grown
significantly in the US since the global financial crisis, with a recent surge in membership partly as a result of Bank of America’s plan to impost a $5 monthly fee for debit cards which led consumer groups to launch a campaign to get customers of big banks to switch to smaller institutions.

In the USA, credit unions are exempt from paying Federal income taxes because they are not for profit businesses that operate for the benefit of their members.  The major banks are lobbying to have that exemption removed because they argue that it gives credit unions an unfair advantage.

In Australia, credit unions do not enjoy any regulatory or taxation exemptions, but rather
must compete on a level playing field with banks.  Despite this, Australia has a very successful
customer owned banking sector. Perhaps this is because the benefits of customer
owned banking are clear!

Organisations like Maleny Credit Union put their members first and can advocate strongly for a better and more balanced approach to banking.  They also have a vested interest in ensuring the communities that support them are thriving and engaged.

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