Updated 10/21/2008 06:48 PM
Credit unions increase in popularity
ROCHESTER, N.Y. -- These days, a bank's loss could be a credit union's gain.
"I think the services are very good. I enjoy it very much. People who work here are very friendly and very accommodating,” said Alfred St. John, a credit union member.
St. John became a member of Summit Federal Credit Union in Rochester long before the banking industry took a hit. Because of the financial crisis, more and more people are turning to credit unions as an alternative to banks.
"What we are finding is that we have been talking about credit unions for a long time, that they are a great financial alternative and I think the message is finally starting to hit home," said Michael Lanotte of the Credit Union Association of New York.
The Credit Union Association of New York says despite the economic downturn, credit unions are stable and safe, mainly because, unlike banks, they are not-for-profits owned by their members.
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"Our motive is to take care of our members, not to make a profit off of them that I think is a big differentiator when it comes to service," said Mike Vadala of Summit Federal Credit Union.
Summit is one 476 credit unions in New York State. They have more than four million members with $43 billion in deposits. Credit unions avoided the biggest problem that lead to financial crisis - sub-prime lending. Vadala says credit unions did not put people in mortgages they could not afford.
"We want to put somebody in a loan they'll be able to pay over the life of the loan. They'll be able to buy the home, stay in the home and that's important to us," Vadala said.
Also, credit unions have not been impacted by the credit crunch. While many banks have stopped loaning money or made it more difficult to get a loan, credit unions continue to loan money without any problems. Vadala says all industries could probably learn a lesson from what happened in the banking industry. Make decisions that serve you in the long haul, not just the short term.
For St. John, it's the personal hometown connection that made him bank on a credit union.
"Anything that's a part of the community is really a good thing," St. John said.