"I'm from the credit union and I'm here to help you"

[captainsblog]

If anything productive has come out of the whole Occupy: movement, it would likely be the impetus given to many United Statesians to get their shekels out of Too Big To Fail banks and into smaller community institutions, particularly credit unions. I just finished reading a post from angledge about just how hard it can be to break those electronic ties that bind us to our big behemoths; it ended happily, with her not only getting her stupid B of A-hole charges reversed, but talking a fellow customer into moving down the street to the local credit union with her.

On the whole, I see the switch effort as a good thing. I've been a card-carrying member of the Cornell WhateveritisnowNotFederal Credit Union since 1980, back when you had to be an employee to get in. They've always been tolerant of my sometimes decade-long absences, have a useful (if somewhat over-security-conscious) website I can use remotely, and in person are good people.

But do not fuck with them. Or, pretty much, any other credit union in the country.

Most consumer bankruptcy lawyers will tell you that credit unions are the meanest, most relentless and least flexible of any creditors. Most of them will sue you sooner, settle less often, and come after you with a vengeance if you dare to file a petition on one of their debts.  Or, in one recent experience, not on one of their debts.

Meet N. (As in "not their real name.") N came to me a little over a year ago in a bad spot; a spouse had died, leaving two intertwined businesses to be unwound with little hope of them ever recovering (N's son has been trying to eke out a living running a business out of one of them, and recently had five bullets shot into the wall of the building in a typical gangsta drive-by). Both companies had to file bankruptcy, and, in time, so did N.  Fairly simple case, debts discharged, no assets to be turned over to creditors.

Ah, but. One morning, I get a call. FUFCU, as we will call them, had sent a notice saying it was canceling N's debit card, was rejecting payment of their pre-authorized debits, and would refuse and ignore anything coming in or going out except for paper checks, which apparently would violate the Uniform Commercial Code if they did so.  Now that might be a righteous stance to take if N had taken them down in the course of the proceeding, but they'd done no such thing. FU was not a creditor, did not receive a notice from the court, and was only named in the paperwork at all because N had accounts there. As in N's money, not theirs. Didn't matter. FU is so indignant about the very idea of BK that they will shame and shun any member who goes through the process, and it actively searches the records of just-filed cases to be sure none of its "members" slip through the cracks.

It took about a week, but N found an even smaller credit union (the kind that used to operate out of single rooms in church basements or factory maintenance sheds) that signed up the business, issued a new card, and helped N move all the pre-authorized debits over there. They've since built an even more extensive not-a-banking relationship with N, and they are now my go-to guys in that community for anyone I hear of with that problem.  I've since learned that the total shutdown practice is common among credit unions, which take personal bankruptcies as a personal affront, allegedly because they know you in a way a bank doesn't.

Don't be fooled by the bigger ones. They are just as monied, lobbyist-heavy and corporate as the banks you're seeing protesters in front of. Credit unions got some incredible gimmes in the last changes to the Bankruptcy Code, exempting their debts from some onerous requirements now imposed on everybody else. If you want a rule of thumb? If you see or hear an ad for a credit union, don't go to that one. Find one with the smallest "field of membership" you can qualify for, and be sure they have NCUA insurance (the credit-union equivalent of the FDIC, and far more solvent than the latter).  And if yours is swallowed up by one of the bigger corporater ones? Move.

Comments

[angledge.livejournal.com]

Great, now I'm worried that we've joined an evil credit union.

[captainsblog.livejournal.com]

No, you probably haven't. Even if you did, though? You can do something about it.

Ask. Investigate. Participate. Unlike banks, you're a member; you can do that:) The old guard may resist it, but with all these new members coming in, it's as good a time as any to get THEM together and pay the change forward.

[bill_sheehan.livejournal.com]

Interesting. I just received notification last night that my credit union with one office in the town center has just been engulfed and devoured (no, no, no - we MERGED!) by a much larger entity that has swallowed up town credit unions in a dozen other Massachusetts communities.

My other bank is USAA, which is a national bank, but darned nice people.

[thediva-laments.livejournal.com]

We're USAA also and we like them very much.

[snowy-owlet.livejournal.com]

Huh, interesting. Definitely makes me want to find out more about the TX State Employees CU.

[captainsblog.livejournal.com]

I'm encouraged by just the fact that they call themselves what they are. It's when credit unions start going with made-up marketing names that they start to turn into Satanic spawn. (One local one went from Xerox Federal Credit Union to Xceed, supposedly to de-emphasize the connection to the original employer but more likely because some guru told them they needed to envision their mission with more feedback and (BINGO!))

(Edited for preposition trouble.)

[digitalemur.livejournal.com]

I use UMass Five College FCU, and while they don't provide competitive versions of some programs, like my state-backed mortgage program, they _do_ seem to provide competitive alternatives to my corporate hometown bank.

It's funny, though, even my credit union has been sending me letters about blah blah this is the new way we're handling your overdraft fees, and by the way why haven't you opted into overdraft protection yet? BECAUSE I DON'T WANT IT YOU JERKS.

But I've been around the overdraft "protection" block a few times so I'm onto them.

Now I just need to get around to getting the rest of my money out of HSBC, whose online savings was once competitive, but now doesn't beat the tools my FCU can provide. Hmm. Another financial project for the new year?

[audacian.livejournal.com]

Yikes, I had no idea. I've had generally good service with SEFCU, except for the time when I dared try to apply for a mortgage with them. They have an online process which I completed, and nobody ever called me. When I called them I left messages on the supposed VM box of the "mortgage" person who got back to tell me that their origination fee is something like $3000. I ended up getting my loan through a mortgage farm for $900. I wouldn't mind paying more for good service (although whether I'd pay THAT much more, IDK) but that was ridiculous.