by: Henry Meier
By many measures these are both the best of times and worst of times for credit union membership. On the one hand credit union accounts exceeded the 100 million mark and there has been a sharp increase in members identifying credit unions as their primary financial institution in the aftermath of the Mortgage Meltdown; on the other hand membership declined in 2014 at credit unions with $500 million or less in assets and an estimated 85% of credit union members also have accounts with banks.
Two things are going on here: First, as I argued yesterday, the industry as a whole has not done a good enough job of distinguishing its brand from banks or of demonstrating the value of its brand.
A second reason is that it’s harder to switch financial institutions than it should be. More should be done to let consumers seamlessly dump their bank for better service. Our relatives in England are providing an example of how this might work and credit unions should push for adoption of a similar model in the U.S.
In 2011 a UK Government commission on banking reform proposed making it easier for consumers to switch banks. After an infrastructure investment of more than a billion dollars and some arm twisting a system started in 2013 under which It takes no more than seven business days to switch accounts to a new bank. Members choose when they want the transfer to take place and the switch is handled between the two banks.continue reading »