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Credit unions outperform banks

By David McMillin · Bankrate.com
Saturday, November 26, 2011
Posted: 10 am ET

Credit unions aren't just keeping up with banks. They seem to be outpacing them.

In the 2011 California Bank & Credit Union Survey conducted by Prime Performance, the Sacramento-based credit union Golden 1 topped the charts in each of the four surveyed areas for a total overall customer experience score of 79 percent.

Here's a look at the four major subjects in the survey, which were then tallied into a Prime Experience Index.

  • Satisfaction with service.
  • Likely to recommend.
  • Likely to come to the financial institution first for additional products or services.
  • Effective at meeting financial needs.

While Golden 1 certainly distinguished itself as the leader of the pack, other credit unions in the state weren't far behind. Here's a note from Jim Miller, Prime Performance president:

If we had ranked the "Other Credit Unions" category, it would have tied Golden 1 for first place. While Bank of the West and Union Bank have strong customer experience scores, overall, banks have work to do to catch up with their credit union competitors.

Responses certainly echo Miller's comments. Citibank, Chase and Bank of America trailed Golden 1's top score by more than 30 percentage points.

Now, I don't think too many readers will be shocked that credit union members are more satisfied with service or willing to recommend their institutions to others. Those seem to be two of the characteristics that have begun to separate the for-profit versus not-for-profit sides of personal finance. However, I do think it's important to recognize how well credit unions are doing in the other two areas.

For many account holders who remain on the big bank bandwagon, I think quite a few of them worry credit unions cannot provide convenient products, tools and account features. It's the old "bigger is better" mentality, and no matter how much steam a bank transfer movement can gain, it can be hard to overcome.

This survey seems to show that tide may finally be turning. Credit unions are no longer perceived as institutions that can only deliver good people-to-people service. They can also deliver competitive tools such as a shared branch network, the ATM Co-op, mobile banking and more.

What do you think? If you're a credit union member, did you have to overcome any initial negative perceptions to give your credit union a chance?

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5 Comments
JohnM.
December 03, 2011 at 8:11 am

If credit unions are honest they will eventually take over the cheating banks like Bank of America. Bank of America need to pay back the money they cheated people out of.

DCM California
December 02, 2011 at 8:51 pm

I had a federal credit union account some years ago. The experience was so bad I won't go back. Also when I was homeless and just got my ssi back i had to tool my walker all around town to a few places before I could even get an account. B of A did not discriminate and make sour faces like others did. They even gave me free checking with direct deposit and most of my bills are paid automatically online so I don't forget. They helped me set it up better after there were some holiday pay out change issues caused charges that they also happily reversed.

NYC Attorney
November 28, 2011 at 5:11 pm

I just switched from Citibank to a Federal Credit Union. So far, I am a month into it and have had no issues. My biggest concern was ATM access (I travel frequently) and mobile banking (I am always on the go, and like accessing my banking activity through my iPhone or iPad). So far, I really like it - the only snafu is that the features on Mobile Banking isn't as extensive as those from the big banks, and there is a 1-2 day time delay in how certain transactions are posted. I'm also limited to only withdrawing a certain amnt of cash each day from an ATM. All these little issues are trivial though, I simply plan ahead of when I need to access cash so I can avoid any ATM surcharge fees.

No complaints from me, and I will probably never go back to Citibank. I wasnt happy with being told I needed to keep $6,000 in my Checking account just to avoid monthly fees. :(

TDMitch
November 27, 2011 at 12:39 pm

I've happily banked with a credit union for over 15 years. I've financed two new-car purchases through them with loan rates that couldn't be matched by any other banks nor the car dealerships themselves-- with monthly payments automatic from my share checking to my car loan helping lower my overall interest rate. Savings rates and CD rates have historically been better than that of big banks, with far fewer fees charged for basic services. I've never had a problem using ATMs while overseas, and love that I can go to the ATM of another credit union in another state and not be charged a fee on either end of the transaction.
Two issues I encountered:
The credit union was SO flush with people's savings, but with interest rates so low, that those of us with savings over a certain amount were asked if we'd consider temporarily moving that savings into CDs or savings accounts to one of a few reputable online banks that had better savings returns. It was easy to do, so I obliged.
The second issue, and one I really don't like, is when they changed their ATM cards to ATM/Visa type debit cards. That makes it harder to protect my account than having an ATM card that is exclusively for use in ATMs, with a four digit pin. Yes, the Visa requires a pin for ATM transactions, but for debit card style purchases, many vendors don't check ID or signatures. I wanted to stick to my old ATM card, but my credit union couldn't do that.
They use a third-party organization through which to do home mortgages, and I haven't yet tried that.
Overall, I always advocate banking at credit unions over big banks.