Credit Unions Set Themselves Up as Alternatives to Big Banks
Thursday, October 20, 2016
SPOKANE, Wash. -- Thursday is International Credit Union Day, and the case for these kinds of institutions has grown stronger with customers as scandal continues to rock one of the country's biggest banks.
Credit unions have become the alternative to big-name financial institutions for nearly half of Washingtonians and six million members in the Northwest. Troy Stang, president and CEO of the Northwest Credit Union Association, said the member-owned, not-for-profit structure of credit unions gives them an advantage over other financial institutions.
"You don't have to look too far to understand credit unions are accountable right to the member that they serve,” Stang said; "not to Wall Street, not to profit-hungry stockholders, but rather the consumer that they're serving, that's walking in their doors, coming into their online channels day in and day out."
Last week, Wells Fargo CEO John Stumpf stepped down in response to a scandal in which it was revealed that bank staff had met sales quotas by opening new accounts without customers' knowledge. Regulators have fined the bank $185 million and many cities and states have decided to no long do business with them.
To celebrate International Credit Union Day, 19 area credit unions will come together in Spokane to build a children's playground.
Traci McGlathery, community relations manager with the Spokane credit union STCU, said her institution supports other nonprofits as well.
"We give back in giving to nonprofits and other causes of our time because we want to, not because we're compelled to,” McGlathery said, “because we don't receive a tax benefit from those donations."
Stang said that credit unions reach out to the community as a part of their mission, sometimes by providing financial literacy education that could potentially help avoid the next financial disaster.
"I always wonder if everybody in our country had a good understanding of astute financial behavior, starting with their own wallet, would our nation have experienced the most recent recession that we did?” he said. "And we're taking that responsibility seriously."
Federal Reserve chair Janet Yellen has promised to implement greater scrutiny of big banks and to remove some of the regulatory red tape credit unions and community banks face.
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