Wednesday, September 08, 2010

Credit Unions: Better for the Environment and You

After discovering that my big bank uses my money to fund mountaintop removal coal mining, I learned that moving to a credit union would be a big improvement.  Upon looking for a credit union, I found that I did not need to reinvent the wheel.  One positive response to recent economic woes in the US has been a massive movement of money away from big banks and into credit unions.  This movement in turn resulted in much online information that can help others change their banking.

Reasons to Switch
1. Environment: The Federal Credit Union Act created the credit union system in the US and limited the types of investments credit unions are allowed to make.  These include loans to members, and other safe, conservative, primarily government-backed investments.  This means your money will not be destroying wilderness.  (View the Act at www.ncua.gov, site of the federal agency that charters and supervises federal credit unions.  The list of allowed investments is in section 1757, 107, #7 of the Act.)

Credit unions are set up, under the same Act, as non-profit co-operative organizations whose purpose is to serve the financial needs of their member-owners.  Co-ops, as  democratically governed organizations usually rooted in a particular community, are also more likely to make decisions that foster that local community and support their environment.   Big corporate banks, on the other hand, may have a branch in your community, but their expertise and their loyalty lie elsewhere.  

The two big banks I deal with are not unique, but typical.  Many large banks finance destructive projects.  For example, Canadian tar sands oil extraction is financed by HSBC, ING, TD Bank, Wells Fargo, and other sources.  This huge project destroys boreal forest, producing scarring of the earth visible from space.  Mountaintop removal coal mining in Appalachia is financed by Bank of America, Citi, Goldman Sachs, Wells Fargo, and others.  Visit BankTrack for more on big banks' effects on people and the earth.
   
2. Your money: Credit unions use money mainly to offer their member-owners higher interest rates on savings and charge lower rates on loans, on average, than banks.  Choose a good credit union, and you'll benefit both yourself and the earth.

Research 
Two well-known sources have called for abandoning the big banks.  Each has a group of inter-linked articles online offering both inspiration and how-to's.  Green America's "Break Up With Your Bank" and Huffington Post's "Move Your Money" campaigns were motivated by widespread anger at the big banks' big bailouts, well informed by careful research, and further supported by stories from individuals who changed their own banking.  For those considering a move to a credit union, looking at both series would be helpful. 
Credit unions had an exclusionist reputation in the past,  as most were dedicated to serving only the employees of a single company or members of a particular trade.  However, over the last ten years many credit unions have broadened their scope of membership.  Today they welcome new members.  It is possible to find one you are eligible to join.

Find a Credit Union
A quick search for a credit union turns up a number of possibilities in the NYC area. For instance: 
  1. Members of the Park Slope Food Co-op (PSFC) may join the Peoples Alliance Federal Credit Union (PAFCU). PAFCU is located at 67 Hanson Place, within walking distance of PSFC.  PSFC members voted at the July General Meeting to approve PSFC's joining PAFCU.  Once PSFC has joined this credit union, all PSFC members and employees are also eligible to join PAFCU.   Sometime in September, PSFC will hold sessions in the meeting room at which interested members can join PAFCU.  Watch for further news on this.

  2. The Municipal Credit Union, with branches in all five boroughs, serves not only city employees but also health care professionals (private or public) working in NYS and several other unexpected categories of people.

  3. The Lower East Side Federal Credit Union serves people with various ties to Manhattan's Lower East Side, but also anyone living within the five boroughs with a household income of less than $38,000.

  4. If you do not find a convenient credit union you are eligible for, look at Montauk Federal Credit Union, on 26th Street in Manhattan.  It is an "open charter" credit union.  All are eligible to join, regardless of job affiliation, neighborhood, etc.  One can bank here from a distance, by direct deposit, online banking, and ATM.

This is merely a sample of metro area credit unions. For additional options, try the Credit Union National Association's "7 Ways to Find a Credit Union".  You may also call their New York hotline [800 342-9835 x8108] to speak with someone who will help you find a credit union.  Or visit the National Credit Union Administration.

Consider Your Needs
Think about banking services you use and check your prospective credit union for those features.  Look at insurance, ATMs, and interest rates.  Accounts at most credit unions are insured by NCUSIF up to $250,000.  A majority of credit unions offer ATM cards and many participate in networks allowing free use of many machines.  Interest rates at a particular credit union may or may not beat the big banks.  If you don't find a single credit union that offers all you need, consider what some others have done  --  keep a small amount in a bank (e.g., for immediate cash access) and put most of your money in a credit union.

Make the Change
Do a good deed for both the environment and yourself.  Find a credit union that will work for you, take your money there, and get it out of the big banks.


*This article appears in the 9/9/10 issue of the Linewaiters' Gazette.
Photo by Patrick Hoesly

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