topic Re: Guidelines for picking a Credit Union? in General Credit Topics

Guidelines for picking a Credit Union?

Anonymous — Mon, 27 Jun 2011 15:32:43 GMT

I am looking into joining a credit union. I've only ever used big-name banks before, so I'm not sure what the differences are between CUs and banks.

When shopping around for a CU, what sort of questions should I be asking to be able to properly compare my options? What things should I try to avoid?

Thanks!

Re: Guidelines for picking a Credit Union?

llecs — Mon, 27 Jun 2011 19:08:13 GMT

CUs generally have lower fees and don't tend to nickle and dime you like some major banks do. Their customer service is typically much better than a bank. CUs typically have membership requirements to join and is usually based on demographics or employer groups or member groups. They are usually pretty good about clarifying who can join right on their website. You usually have to pay $$$ and they'll take that money and put it into a "share" account. In other words, you own a small percentage of that CU with your entry $$$ (usually $5 minimum). You then can open any account you want after joining based on approval, credit, etc. Most will pull your CR, though you can often use that same inquiry to apply for anything else (e.g. checking, savings, CC, whatever). Some CUs will check Chex. YMMV. IMO, when looking for a CU, I personally look at their CC limits (usually on their website) and look at their banking products and other benefits.

Re: Guidelines for picking a Credit Union?

Anonymous — Mon, 27 Jun 2011 23:57:54 GMT

@llecs wrote:
CUs generally have lower fees and don't tend to nickle and dime you like some major banks do. Their customer service is typically much better than a bank. CUs typically have membership requirements to join and is usually based on demographics or employer groups or member groups. They are usually pretty good about clarifying who can join right on their website. You usually have to pay $$$ and they'll take that money and put it into a "share" account. In other words, you own a small percentage of that CU with your entry $$$ (usually $5 minimum). You then can open any account you want after joining based on approval, credit, etc. Most will pull your CR, though you can often use that same inquiry to apply for anything else (e.g. checking, savings, CC, whatever). Some CUs will check Chex. YMMV. IMO, when looking for a CU, I personally look at their CC limits (usually on their website) and look at their banking products and other benefits.

Are there any particular CUs known for not pulling credit first?

Thanks llecs! Makes much more sense now.

Re: Guidelines for picking a Credit Union?

Anonymous — Tue, 28 Jun 2011 03:36:46 GMT

One difference to pay attention to if you have more than a couple dollars on deposit is that not all credit unions' deposits are federally insured.

All federally-chartered credit unions, and many/most state-chartered credit unions, are insured by the National Credit Union Administration (NCUA) -- which is the credit union equivalent of the FDIC.

Some state-chartered credit unions are not covered by NCUA insurance. I believe most of the remaining credit unions are insured by a private insurer called American Share Insurance. Not to make this more confusing, but American Share Insurance also provides additional insurace for deposits at NCUA member credit unions called "Excess Share Insurance" -- that comes into effect after NCUA limits are exhausted.

Re: Guidelines for picking a Credit Union?

Anonymous — Tue, 28 Jun 2011 04:43:34 GMT

@Anonymous wrote:
One difference to pay attention to if you have more than a couple dollars on deposit is that not all credit unions' deposits are federally insured.

All federally-chartered credit unions, and many/most state-chartered credit unions, are insured by the National Credit Union Administration (NCUA) -- which is the credit union equivalent of the FDIC.

Some state-chartered credit unions are not covered by NCUA insurance. I believe most of the remaining credit unions are insured by a private insurer called American Share Insurance. Not to make this more confusing, but American Share Insurance also provides additional insurace for deposits at NCUA member credit unions called "Excess Share Insurance" -- that comes into effect after NCUA limits are exhausted.

That is very good to know! It's one of those things that not only I, but probably many others, fail to notice.

Re: Guidelines for picking a Credit Union?

Anonymous — Tue, 28 Jun 2011 04:46:05 GMT

@llecs wrote:
CUs generally have lower fees and don't tend to nickle and dime you like some major banks do. Their customer service is typically much better than a bank. CUs typically have membership requirements to join and is usually based on demographics or employer groups or member groups. They are usually pretty good about clarifying who can join right on their website. You usually have to pay $$$ and they'll take that money and put it into a "share" account. In other words, you own a small percentage of that CU with your entry $$$ (usually $5 minimum). You then can open any account you want after joining based on approval, credit, etc. Most will pull your CR, though you can often use that same inquiry to apply for anything else (e.g. checking, savings, CC, whatever). Some CUs will check Chex. YMMV. IMO, when looking for a CU, I personally look at their CC limits (usually on their website) and look at their banking products and other benefits.

I also like to look at their online banking facilities if you think it's something that you will be using. Especially useful if you will end up depositing checks is a remote capture service where you can scan your checks for deposit. Also look for ATM coverage and fees.

My favorites: Alliant CU, Navy Federal & PenFed.

Re: Guidelines for picking a Credit Union?

Anonymous — Tue, 28 Jun 2011 04:52:55 GMT

@Anonymous wrote:
+1

I also like to look at their online banking facilities if you think it's something that you will be using. Especially useful if you will end up depositing checks is a remote capture service where you can scan your checks for deposit. Also look for ATM coverage and fees.

My favorites: Alliant CU, Navy Federal & PenFed.

Thanks for the recommendations O6. I would give anything to be able to join Navy Fed -- heard so many good things about them! (Plus I <3 the AF.) Oh well. I will look into the other ones.

Re: Guidelines for picking a Credit Union?

Anonymous — Tue, 28 Jun 2011 14:11:40 GMT

I like Alliant as well. We've been with them for two years.

Our local CU was just as generous on CC limits (they're both at $10K) and had lower APR's, and far better rates and much faster approvals on auto loans. We looked at getting our home refi'd through Alliant, but found a much better deal through National (or whatever it was - now PNC).

We have another local CU that we've worked with for years, but their interest rates, constant hard pulls, denials on CC's, and unfavorable rates on our mortgage app has caused us to leave them behind.

CU's vary a lot; as do banks. You're wise to look into what they can do for you.

Re: Guidelines for picking a Credit Union?

Anonymous — Tue, 28 Jun 2011 16:54:24 GMT

I just wanted to add that you might find these links helpful, in the Credit Union Database on the NCUA (National Credit Union Administration) website. There's a wealth of information that might help point you in the right direction.

Re: Guidelines for picking a Credit Union?

nomoore — Tue, 28 Jun 2011 17:47:07 GMT

Being insured by the NCUA (governmenet) is not nessarily a great thing. The NCUA has to insure everyone, even the ones that are not financially secure. They can't pick and choose who they insure like American Share Insurance can. ASI reviews the financials for all the CUs they insure to make sure they are sound before they accept an app for insurance. So there is a higher chance that they are pretty financially secure. Also, a CU insured by ASI often covers more accounts and covers more money in those accounts. The NCUA covers $250,000 per "member". The CU I work for considered converting to ASI and if we had converted it would have provided the members with $xxx,xxx (sorry I don't remember the figures but it was at least $250,000) per account type that they had, thus $xxx,xxx for each type of checking, each type of savings, each type of money market, etc. If you are going to put a LOT of money in a CU then you might be better insured with a credit union that uses ASI.

Re: Guidelines for picking a Credit Union?

Anonymous — Tue, 28 Jun 2011 17:51:00 GMT

Hey nomoore - welcome! I see you've been around for awhile - thanks for posting!

Re: Guidelines for picking a Credit Union?

Anonymous — Tue, 28 Jun 2011 17:53:21 GMT

@nomoore wrote:
Being insured by the NCUA (governmenet) is not nessarily a great thing. The NCUA has to insure everyone, even the ones that are not financially secure. They can't pick and choose who they insure like American Share Insurance can. ASI reviews the financials for all the CUs they insure to make sure they are sound before they accept an app for insurance. So there is a higher chance that they are pretty financially secure. Also, a CU insured by ASI often covers more accounts and covers more money in those accounts. The NCUA covers $250,000 per "member". The CU I work for considered converting to ASI and if we had converted it would have provided the members with $xxx,xxx (sorry I don't remember the figures but it was at least $250,000) per account type that they had, thus $xxx,xxx for each type of checking, each type of savings, each type of money market, etc. If you are going to put a LOT of money in a CU then you might be better insured with a credit union that uses ASI.

For all intents and purposes, NCUA's National Credit Union Share Insurance Fund should be considered guaranteed by the federal government up to the cap of $250,000 per account. Since the NCUSIF is backed by the full faith and credit of the U.S. federal government, if they can't cover the insured account we're all in real big trouble.

Now, there are CUs out there that layer ASI's Excess Share Insurance on top of the NCUSIF, which would insure your deposits beyond $250K per account.

Re: Guidelines for picking a Credit Union?

nomoore — Wed, 29 Jun 2011 18:12:31 GMT

@Anonymous wrote:
@nomoore wrote:
Being insured by the NCUA (governmenet) is not nessarily a great thing. The NCUA has to insure everyone, even the ones that are not financially secure. They can't pick and choose who they insure like American Share Insurance can. ASI reviews the financials for all the CUs they insure to make sure they are sound before they accept an app for insurance. So there is a higher chance that they are pretty financially secure. Also, a CU insured by ASI often covers more accounts and covers more money in those accounts. The NCUA covers $250,000 per "member". The CU I work for considered converting to ASI and if we had converted it would have provided the members with $xxx,xxx (sorry I don't remember the figures but it was at least $250,000) per account type that they had, thus $xxx,xxx for each type of checking, each type of savings, each type of money market, etc. If you are going to put a LOT of money in a CU then you might be better insured with a credit union that uses ASI.
For all intents and purposes, NCUA's National Credit Union Share Insurance Fund should be considered guaranteed by the federal government up to the cap of $250,000 per account. Since the NCUSIF is backed by the full faith and credit of the U.S. federal government, if they can't cover the insured account we're all in real big trouble.

Now, there are CUs out there that layer ASI's Excess Share Insurance on top of the NCUSIF, which would insure your deposits beyond $250K per account.

"Backed by the full faith and credit of the U.S. federal government" doesn't mean much to me when I see the NCUA charge all its remaining insurees an extra Premium on top of their normal premiums to refill the NCUSIF to make up for all the failed credit unions from the bad economy we've had. They have done this the last 2 years in a row.

2009

2010

I can't say ASI or other insurance providers are immune to this but if you compare the history of the NCUA to the history of ASI you will see that the NCUA has charged these premiums much more often. And it's not like we're comparing a third rate insurance company to a first rate company. ASI has been around for a LONG time and if they had a habit of not paying up then they wouldnt be around. It's not like car insurance were some people just get the cheapest and hope it pays if they need it because they can't afford better. To switch away from NCUA you have to get the approval of the CU members. That means you have to do your research and give some VERY good reasons to switch because "Backed by the full faith and credit of the U.S. federal government" means a lot to a lot of people.

I don't understand why people put so much faith in the government though. It's our own taxpayer dollars that pay for it. Sure the government could print up a lot of money and hand it out except that would cause the value of the dollar to decrease which would be detrimental to the economy. When a CU fails for whatever reason, no matter who is insuring it, the remaining insurees pay, just like any auto, home, or life insurance. This is the way that is most logical for it to work and the way it DOES work. I mean would you want to pay the government extra taxes or have your money devalued because some stupid CU managers somewhere didn't do their job and made bad decisions on loans? There's plenty of other ways that has already affected our economy without asking the government to devalue our dollar or to charge everyone extra taxes.

There are plenty of things to look for when choosing a credit union. But don't limit yourself to only those that are insured by the NCUA just because it is "backed by the U.S. federal government".

Re: Guidelines for picking a Credit Union?

Gray — Sun, 03 Jul 2011 06:51:52 GMT

We opened up an account with Navy Federal in the spring of 2010. Just checking and savings. No hard pull.

Last January, we opened up just a couple savings accounts with PenFed. They did a hard pull. You can join PenFed, by the way, simply by paying a one-time nominal membership fee. https://netmember4.penfed.org/NetMember/Forms/OpenAccounts/Eligibility.aspx (choose "none of the above")

We've been "banking" members of USAA since 1997 (credit cards since 1993). Anyone can join them for checking, savings, credit cards, life insurance, investments, etc. Just not auto/property insurance. I'm less enthusiastic about USAA than I was in the past, but they're pretty good.

Last May or so, we opened up a MMA and CD accounts with Ally. No hard pull.

If I was making recommendations to people for new accounts, and it was checking, savings, debit card, mma, and CDs, I'd say Ally.

Re: Guidelines for picking a Credit Union?

MarineVietVet — Sat, 02 Jul 2011 21:50:12 GMT

I'm a little late to the discussion but I think you should look into local CU's also and not just the Big Boys. I can actually walk into mine if the need arrives and talk face to face with someone. That means a lot to me.

Plus my LO at the CU will give me my EX FICO right over the phone just by asking. I would suspect that the national CU's probably don't have that policy.

From a BK years ago to:
EX - 3/11 pulled by lender- 835, EQ - 2/11-816, TU - 2/11-782

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".