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The U.S. now has more confirmed coronavirus cases than any other country. Despite the pandemic, Election 2020 continues and states are making changes.

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Big Bank Scandals, Fines Drive More in MI to Credit Unions

Credit union memberships have surged in the past year, according to recent data. (ronnieb/morguefile)
Credit union memberships have surged in the past year, according to recent data. (ronnieb/morguefile)
October 3, 2016

TRAVERSE CITY, Mich. – Another round of scandals in the banking world has many in Michigan rethinking their accounts.

Credit union membership in the state now stands at close to 5 million – or roughly half the population – with one of the highest membership gains in recent history in the last year, according to the Michigan Credit Union League.

Philip Heinlen, CEO of Northwest Consumers Federal Credit Union in Traverse City, says people are bound to look for alternatives to big banks after headlines like the recent Wells Fargo scandal. Bank workers issued credit cards without customers' consent to meet company sales goals.

"They all have such unrealistic expectations of what growth should look like that they put goals on people that are unachievable,” Heinlen points out. “Honestly, if you help people do what they're trying to get accomplished, they come back and ask for more."

Wells Fargo was fined $185 million for the fake accounts, including a $100 million penalty from the Consumer Financial Protection Bureau, the largest the agency has ever issued.

The scandal has reignited a firestorm of criticism of Wall Street banks that began during the 2008 financial crisis and taxpayers' bailout.

Heinlen maintains more people in Michigan and across the nation are turning to not-for-profit financial cooperatives in part because of a desire to feel more genuinely connected to their communities.

He says a backlash against the overwhelming role of technology and automation is also part of their frustration.

"We might think that's what they want,” Heinlen states. “We want to steer them to that because it's easier.

“The 88-year-old probably doesn't want to go online at all. That 18-year-old still wants to know you're here. They'll walk through the front door knowing, 'You know what, I can go in and they're going to take care of me, because they know who I am.'"

Just last week, Wells Fargo agreed to pay an additional $24 million to settle allegations that it mistreated members of the military, including illegally repossessing vehicles.

Federal Reserve chair Janet Yellen has promised greater scrutiny of big banks, and to remove some of the regulatory red tape faced by credit unions and community banks.

Mona Shand, Public News Service - MI