Posted by Christopher Stevenson
In a recent conversation with my three-year old son, he noted that he and I were both wearing flip-flops. Putting my foot next to his, I asked him whose sandal was bigger. He said, "Mine."
"Oh, yeah? How do you figure?" I asked.
"Mine's size large."
True enough. My son has a good thing going with his child's size-large flip flops (big news for a three-year old), but he made the claim of having a bigger sandal without considering the competition (my adult-size 11). It's much the way credit unions boast better rates and consumer satisfaction levels than banks. Is it true? Sometimes, but are the boasting CUs really considering what's going on in the industry before claiming superior rates and service?
I did a quick comparison between my credit union and bankers' rates on Bankrate.com. It wasn't a detailed analysis, but a typical online check like I would do if I were shopping for auto rates or looking for a place to open an account for my kids. Quick summary...my CU blows the competition out of the water on new auto loans; there's no comparison. But my savings account earns less than 1 percent; compare that to the 29 banks on bankrate.com that offer savings accounts with 4 percent or higher.
All right, but how do we do with member satisfaction? Credit unions are still tops, but the gap is closing. A 2005 American Bankers survey shows that 71 percent of credit union members are very satisfied (down from 73 percent in 2004), while 63 percent of bank customers are very satisfied (up from 58 percent in 2004). And institutions like Commerce Bank and Downey Savings consistently receive top ratings for their service. In other words, bankers' service isn't as bad as we'd like to think.
Here's the long and the short of it. As a whole, credit unions offer great rates and service (just take a look at the research done at the University of Wisconsin-Whitewater and the recent study done by the Filene Research Institute). CUs have set the standard for service and provide fair competition to the banks, which benefits all consumers, even those that aren't CU members. But the fact is, credit unions work in a tough market, disruptors abound, and we're not always top dog when it comes to rates and service anymore. The time for generic "credit unions offer better rates and service" statements has passed. Look around, see what your competitors are doing, and figure out what you do better than anyone else. Find out what differentiates your credit union from other financial service providers (including other CUs), then tell everyone about it.
