UnBankingUnBelievable

 Have you seen these crazy new loan rates at the credit union?

Yowzah!

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Tiffany and I have a fascination with these two personal finance radio personalities, Dave Ramsey and Clark Howard.

Tiff and Dave are like BFF…or maybe it’s just that she reads his books and listens to his radio show all the time.

Clark and I go way back…or maybe it’s just that I’ve listened to his radio show my entire life (thanks Dad!).

So, if you couldn’t tell already, we are big fans! Dave will tell you how to get out of debt and Clark will tell how to save a buck.

I was listening to Clark this afternoon when a caller called in about looking for a credit union. He was tired of the crazy fees that his bank was charging.  He heard Clark talking about how different credit unions are than banks and he wondered how to find a credit union that would work for him. Clark was more than happy to help.

Did I mention that Clark and Dave STRONGLY recommend credit unions to their listeners?

Oh, well then, I’ll tell you now. Clark and Dave STRONGLY recommend credit unions to their listeners. They are big fans of the credit union world because we are not-for-profit and NOT owned by stockholders.

Clark even mentioned that in the coming years the ‘giant monster mega banks’ (that’s his affectionate term for them) will have to find more and more ways to charge fees to their customers to make more and more money.

Credit unions have lower loan rates and fewer fees because we don’t have stockholders to please.  It’s just that simple.

So, I’m glad I got to hear that caller on the Clark Howard Show today. It reminded me that my money is safe in a place that isn’t trying to nickel and dime me to please their stockholders.

If you know of anyone that is tired of their bank, tell them about NWGACU. And if they live far away, tell them to check out www.findacreditunion.com.

If you are interested in tuning in to personal finance radio, you can hear Dave on WLAQ (1410 AM) from 3-5 every weekday, and you can hear Clark on WRGA (1470 AM) from 1-3 every weekday.

On July 9, the Wall Street Journal Blogs quoted Pope Benedict XVI as saying:

“If love is wise, it can find ways of working in accordance with provident and just expediency, as is illustrated in significant ways by much of the experience of credit unions.”

Man, what an endorsement!

The Pope is originally from Germany, and it just so happens that credit unions originated in Germany in 1849.  The mayor of a small German town formed a credit society so that citizens could help themselves, rather than rely on the local land barons. Three years later, this credit society became a credit union…and the rest is history.

And in case you need a dictionary.com refresher, by saying “provident” and “expediency”,  the Pope is referring to the economical, advantageous, and unselfish nature of credit unions.

I don’t think we’ll see the Pope endorsing banks anytime soon.

…want to know: What product or service do you wish that NWGACU offered?

(No, we’re not joking! We really want to know!)

Credit unions are 100 years old this year! I want to say ‘happy anniversary’ and give you a little history about credit unions as a whole and how we fit into the picture.

Here is a little history:

The credit union movement was founded by innovative leaders who strongly believed that the banking industry was not serving the people as it should. Financial services were too costly and the power to influence decisions was kept in the hands of the highest depositors. This spurred an international grassroots movement started by a handful of forward-thinking individuals. Here is a timeline of how credit unions came to be and some highlights of NWGACU when we moved onto the scene.

The result of this movement was credit unions: not-for-profit, member-owned financial cooperatives that are overseen by a volunteer Board of Directors. Because the members are the owners, there are no stockholders to pay, and each member elects the Board of Directors with an equal vote, regardless of the size of his or her account.

Thanks to the pioneering spirit of leaders before us, Northwest Georgia Credit Union is able to offer this fresh, “people helping people” approach to money, with emphasis placed on your financial health, not your potential profitability.

So, happy 100 years credit unions! We are thankful to be a part of such a movement.

And just for fun, here are some interesting things I learned in my research of  the history of NWGACU:

• The first Annual Meeting was held the Courthouse Annex in 1962 and the shares balance was $513.80, loans balance was $485.33, and membership was up to 29 people.
• This was our first logo:
• In 1967 the interest rate on a personal loan was 1% and on an automobile was 3/4 of 1% (their words, not mine).
• Between 1961 and 1971 share draft dividends were usually 5%.

Wow, times have changed!

Does a better rate on a loan really help lower monthly payments that much? Does it really matter where I get my loan? How much difference could there be in a few points?

Check this out:

It’s a fact. Loan interest rates are usually lower at a credit union than at a bank, which translates into smaller monthly payments for you and your family. Take a look at these national loan rate averages:

      Source: Datatrac, March 2008

 Using these same loan interest rate averages, check out how the credit union monthly payments compare to bank monthly payments:

These rates are just averages! If your interest rates are higher, you could potentially save even more by borrowing at Northwest Georgia Credit Union instead of a bank. In fact, between better loan and deposit rates and lower fees, credit union membership confers a real financial benefit to consumers, to the tune of about $240 a year per member household.*

 *Source: Credit Union National Association

A few points can make a big difference! Educate yourself before you go searching for a loan and save money by getting the best rate you can find!

Time for the third part in our series on what the big stinking deal is about credit unions. The last part of the series of will appear next week. Want to know the last big stinking deal? You’ll have to wait! In the meantime:

Lesson Three: Democratic Control

Lest you think this is going to turn into a conversation about politics, let me clear this up. Every member-owner of a credit union receives one vote when electing the Board of Directors. At a bank, you can only elect the Board of Directors if you are a stockholder, and even if you are a stockholder, the number of votes you receive depends on how large your shares are.

The Board of Directors is important. Really important. They oversee the credit union management and provide guidance on the overall strategic direction of the credit union. When necessary, they prevent credit union management from doing something unwise, thus protecting your interest in the credit union.  Electing the Board is kind of like a small scale election of the President; voting on the right candidate makes all the difference in how well things run. (Somehow, politics weaseled its way in.)

Even more important is that the Board of Directors at a credit union is made up of members who volunteer to serve. Banks have to pay their Boards, and their Directors may not even be customers. Unlike a bank, this means that a credit union Board not only has little possibility for ulterior motives in decision making, but they also make decisions that are wise for members because they are members themselves!

What’s the Big Stinking Deal?

You have a say in how a credit union operates. Banks can’t offer that.

It’s a big bad world out there. I realize this every time I do these things:

• Read the news
• Drive in Atlanta
• Eat too much dessert and see the number on the scale go up. Dang it.

We realize that the world can be a tough nut to crack, which is exactly why NWGACU has fraud alert service for your debit card. The best part is that you don’t have to do anything. If you have a debit card at NWGACU (and you use it), your card transactions are being continually monitored for unusual and suspicious activity. If something looks funny, our fraud alert service will give you a call to verify that funny little transaction to make sure that no bad guys have compromised your card. Sometimes a live person will call you. Sometimes an automated message will call you. Either way, the fraud alert service will verify your identity with the last 4 digits of your social before discussing anything about your strange/mysterious/unusual/funky transaction. Of course, if you ever travel overseas, give us a call so we don’t worry when you suddenly have transactions in Kyrgyzstan. (Yes, people, that’s a real country.)

Welcome back to our series on what the big stinking deal is about credit unions. In Part One of What’s the Big Stinking Deal, we talked about why member-ownership is so important, and why it’s better than being a bank customer. In Part Two, we discuss (drumroll, please)…

Lesson Two: Not-For-Profit

You’re probably thinking, I don’t get it. Why would a credit union stay in business if it wasn’t for profit?

Good question, young grasshopper.

Both banks and credit unions earn income through loan interest rates and fees, and the profit is what is leftover after expenses are paid. The difference is where the profit goes. At a bank, the profit goes to stockholders because, well, they own the place. At a credit union, the profit goes to the members because, well, you own the place.  Profit is given back to members in the form of dividends (interest) on deposit accounts, reduced rates on loans, free or inexpensive services, and lower fees. The “not-for” portion of “profit” means that our purpose for existence is not earning money– it’s helping people with their personal finances without ripping them off.

What’s the Big Stinking Deal?

Stuff is usually cheaper at a credit union. Because you have a hand in the ownership, you reap the financial rewards.

For real.

I love credit unions. I mean, really love them. In fact, I didn’t know how much I loved them until I realized how much I didn’t miss my bank. I’ve been a credit union person since 2004, and there’s no turning back. Now, lucky me gets to spend my days spreading the credit union message and sharing how credit unions (particularly NWGACU) are the best option out there. 

In my galavanting around town sharing the happy news, I sometimes (umm, all the time) come across people who don’t really know that credit unions and banks are different. Occasionally, I even come across people who think credit unions are somehow related to credit bureaus. Unfortunately, the name “credit union” isn’t entirely clear about our line of business, and unfortunately, our industry hasn’t done the best job educating the public on the difference.  So, I’m clearing the air with this series on what the big stinking deal is about credit unions. Why are we so good? What’s the difference?

Lesson One: Member-Ownership

Banks are owned by stockholders, and they have customers. 

Credit unions are owned by their members.

At any institution, the owners make decisions that provide the maximum benefit to themselves. This is a good thing. Otherwise, there would be no incentive for any business to exist.

The problem at a bank, however, is that the bank isn’t necessarily owned by customers. The owners (stockholders) are motivated to make profit from their shares, but what is profitable may not be in the best interest of the customer.

At a credit union, the owners are the members. Members’ shares (their accounts) are their portion of ownership. So, member-owners are actually acting in the best interest of themselves when they do owner-like things, such as voting for the Board of Directors.

What’s the Big Stinking Deal?

Bottom line? Member-ownership changes how you are treated. The employees of a credit union realize that they are serving people who have influence and power. You’d put your best foot forward when your boss walked in the room too, wouldn’t you?

This says it all.