Credit Unions v Banks...

[East Sun]

Are Credit Unions safer than Banks?'
Does anybody know? Or is it impossible to know? Probably, as we can't know the future.

I know you're saying, go to a Credit Union and ask about a lot of things, like insurance coverage etc. But employees often don't know about the policies of the establishment.

If you call the company they will probably paint their company in a very good light. If the SHTF they may "inherit" your money, same as banks might.

I'm curious, thats all. I dont have money to loose but don't want to end up pennyless.

[Satori]

Posted by East Sun (here)
Are Credit Unions safer than Banks?'
Does anybody know? Or is it impossible to know? Probably, as we can't know the future.

I know you're saying, go to a Credit Union and ask about a lot of things, like insurance coverage etc. But employees often don't know about the policies of the establishment.

If you call the company they will probably paint their company in a very good light. If the SHTF they may "inherit" your money, same as banks might.

I'm curious, thats all. I dont have money to loose but don't want to end up pennyless.

In the USA the primary distinction between a CU and a national bank is that CU are state chartered, local institutions and CU’s depositors, as well as management, are also members of the CU and live in the community. CU members have certain voting rights and some nominal control over certain CU policies and practices. CUs are subject to federal regulation but also state regulation. Depending on the politics of the state and economic soundness of the state, that can be a good thing. Unlike national banks, CUs do not have shareholders to whom a national bank is beholding. CU deposits are FDIC insured, as are national banks.

Many years ago I switched to a CU. Glad I did.

[Brigantia]

It's similar regulation for consumer protection regarding a credit union in the UK for anyone interested, from the FCA website:

"Credit unions are dual-regulated, which means that they are regulated by the Financial Conduct Authority (FCA) and by the Prudential Regulation Authority (PRA)."

[norman]

But, I was shocked in about 1995 in a small town in Mid Wales, where I had been persuaded to join a credit union by an enthusiastic friend, to be told by one of the people running it that they actually intended to keep the money in a BANK !

And even now, think about it. The world is going to hell in a hand basket and the money has to be kept safe somehow. Ok, things are more digital now than they were in 1993, but where's it all going to be kept safe ?

I haven't yet heard of a credit union hiring a private army.

[Satori]

Posted by norman (here)
But, I was shocked in about 1995 in a small town in Mid Wales, where I had been persuaded to join a credit union by an enthusiastic friend, to be told by one of the people running it that they actually intended to keep the money in a BANK !

And even now, think about it. The world is going to hell in a hand basket and the money has to be kept safe somehow. Ok, things are more digital now than they were in 1993, but where's it all going to be kept safe ?

I haven't yet heard of a credit union hiring a private army.

I did not address the question of “safe”. In this global financial system, I’m not sure that when it comes to any form of financial institution available to the common, “safe” has any meaning. Further we can’t eat or drink “money”, which today is mostly digital, that is, weightless photons in the electro magnetic ether. Useful commodities in your physical possession are safer. So, I believe people should take as much money as one can afford and obtain items that will enable one to increase the chances of survival of one’s self and loved ones.

[Denise/Dizi]

Sadly, I have been a member of a credit union for a few decades now... And I have noticed that while in the beginning, it did seems to be a bit more autonomous with its reguations, more recently it has begun being controlled in many ways that it was not prior... Like many banks in America, they track large deposits, withdrawls, and such, and now the Credit Unions are falling suit as well...

Most people make more than that in a week, given the cost of living, so that means someone, outside of their credit union is tracking every penny they deposit and spend...

Typically using a credit union tends to support your local community, as the locals borrow money from the other members, and as a result that revenue stays in the local area. It's a win win really... And they loan based upon those who are storing their funds in there, and how much is in the accounts at any given time..

At this point I don't know if there is really anything safe as far as peering eyes, and security... But I wish you luck in finding these answers for yourself. I would recommend going into your local credit union and seeing what they offer as they're really independent banking institutions, and it can vary from union to union.

[pyrangello]

If you were to find a credit union that is localized in one area or state, typically their balance sheets are far more better , meaning less leveraged than the big banks who write hundreds of mortgages, then bundle and sell them again and again. These are called credit default swaps. The liability comes when liabilities are heavier than assets and if there is a run on a bank or a slew of mortgages that went bad the bank that sold the loan bundle has to cover the monies to stay within a certain asset vs debt ratio to be a viable bank in the feds eyes. Take wells fargo, i beleive i heard anumber that was truly unbelieveable of credit default swap bundled loans sold to the tune of something over 50 trillion. It was a riculous amount but that gives you an idea how far stretched some of these major banks are. The money is rolling when times are good, but when it gets bad look out.

[TravelerJim]

I am a big fan of credit unions and have been for a long time. The service is better and the fees are lower, in my experience.

That said, the credit unions use the same system, I think from the CUNA. They ostensibly do this for cost savings so they do not have to develop their own systems, but in the end it would make it easier to control and monitor the activities of credit union account holders just as with the larger banks.

[T Smith]

Posted by Satori (here)
CU deposits are FDIC insured, as are national banks.

Technically, Credit Unions are NCUA insured, not FDIC. But yes. This covers the same federal insurance as FDIC up to $250,000.00