Better Than A Mattress

I know that some people think of me as a decisive go-getter, but when it comes to the outside world, nothing could be further from the truth. Case in point: My protracted extrication from Chase.

I opened my first bank account, I believe, when I was nine; my father took me to American Savings and I got a little passbook and put my $10 in. American Savings was bought and turned into Washington Mutual, and I kept my account there, primarily because I didn’t really want to go to the effort of moving it. I haven’t even gone to the effort of taking my father’s name off my bank account, and it actually comes in quite handy sometimes.

When Washington Mutual failed and Chase took over, I began to feel a bit…restless. I’m not a big fan of Chase, and I thought that the time might finally have come to start banking somewhere else. This, of course, requires effort, and thus I kept putting it off, even as Chase increasingly pissed me off. One by one, they changed all of the things about Washington Mutual that I’d liked (for example, WaMu used to give me access to my credit score, Chase doesn’t). The interest rates on my accounts declined to basically nothing, and I actually ended up opening a savings at the Credit Union and sticking most of my money in there, since they offered better rates (given that my account there is currently earning .5%, I wouldn’t say that the rate is terrific, but it’s better than Chase). I was reluctant, however, to switch over to the Credit Union totally.

The last straw came a few weeks ago, when Chase charged me an exorbitant fee for receiving an overseas wire transfer. I huffed and puffed about it and stomped around the house for a few weeks, and then I mustered up the energy to go into the Credit Union and add a checking to my profile. Once that went through, I waited for all my pending transactions with Chase to clear, and them marched in to the Fort Bragg branch and closed out all my accounts. (Yes, I like to make Statements, but my scheme was undermined by the total lack of interest from the bank staff in why I was closing my account. You’d think they’d want to know why I was taking all my money away, but no. More frightening? They didn’t ask for ID. I could have been, you know, anyone, coming in to clean out s.e. smith’s bank accounts.)

Credit unions are interesting things; they’ve actually done pretty well in the recession, in part because they tend to stick with very conservative financial practices. In addition, they focus on doing business locally. I actually find a lot of things to like about the credit union model, not least of which is the personal service. Now, don’t get me wrong, the staff at the local Chase branch are generally perfectly nice people. But the staff at the Credit Union, I don’t know, it’s a little hard to describe. They go the extra mile, I guess, and, honestly, the services at the Credit Union are much better.

Better interest. Better ways of arranging my accounts. No fees for receiving wire transfers. Focus on lending within the community, and lending wisely. Better banking policies in general. There really are a lot of reasons to switch to a credit union. The not for profit model also makes a big difference, for me, because it totally changes their approach to handling funds and customers. And I like the thought that the funds I deposit stay local, and help other credit union members.

Most communities have a credit union or two, and not just closed unions only available to certain people; I think that, like many people, I thought credit unions were only for firefighters and school teachers and so forth. And, yes, there are credit unions focused on specific trades (which I also think is really excellent, for a variety of reasons), but there are also credit unions which are open to anyone who wants to join. Historically, the major disadvantage with credit unions, and the reason I was reluctant to switch, was that it was difficult to access accounts while traveling. Now, I think that’s not such a big issue.

Now that I’m a more active credit union member, I’ve started following news items related to credit unions a bit more closely, although I always kept a bit of a weather eye on them because it’s a topic of interest for me. And what I think is interesting is that pressure is being put on credit unions by the government, which is telling them that they need to lend more. Indeed, the government seems to be suggesting that credit unions somehow owe something to the rest of society, and that they should make loans, even risky ones, to free up the credit market.

Understandably, credit unions are resisting this, arguing that the reason they are doing well is because, well, they are smaller, and also because they tend to have better policies. Why should credit unions put themselves on a limb to bail everyone else out? Why should credit unions be forced to clean up after the banks which made unwise loans? What, indeed, do credit unions owe the rest of the country? Sure, credit unions have a vested interest in a healthy economy as well, but I don’t think that means that they need to plunge into questionable lending practices to revive the economy or anything.

Instead, I think the banks could take some lessons from credit unions. Maybe we don’t actually need such a free credit market. Maybe we should be taking note, here, and recognizing that Americans were carrying too much debt, and bad debt, and that it’s time to live a little more closely within our means. Already, I see the problems which brought about the financial crisis repeating themselves, and it makes me wonder how much the banking industry learned.