By: Stephanie Marie Adames, Puma Press Staff Writer
“We have a right to make profit,” said Brian Moynihan, CEO of Bank of America to CNN when defending the recent announcement to add more fees to customers’ accounts. Banks may have a legal right to make profit, but the moral right of their actions seems to be in question as consumers continue to speak out against the increase of fees.
Across the nation, Americans have been speaking out against the outrageous profits of Wall Street-controlled banks and corporations.
Rachel Pierson, a former student at Paradise Valley Community College, expressed her frustration by saying, “Every company wants to make money and profit, but when you start nickel and diming the little guy to further pad very full pockets, it becomes financial rape...”
Consumers who are fed up with the increasing fees that banks place on their accounts should consider moving their business to a credit union. Having worked for credit unions for several years, I vividly see the contrast between large banks and credit unions. Credit unions are nonprofit with one purpose, to help people. I have always been an advocate for credit unions and encourage people to invest their money where profit is not the driving force of business.
Mark Wolff, Senior Vice President of The Credit Union National Association said, “In the credit union world, we say our motivation is service, not profit.”
Credit unions pride themselves on quality service and their independence from stockholders. CUNA recently stated that credit union members save more than $6.7 billion a year in lower fees. Credit unions are also rated higher then banks in consumer trust and satisfaction by Forrester Research and American Customer Satisfaction Index.
Bill Cheney, President and CEO of the CUNA said, “We want consumers to know they can fight back against big banks by saying ‘no’ to more fees. They should give credit unions a close look and take advantage of credit unions’ emphasis on service over profits...”
The Move Your Money Project and Occupy Your Bank Account are two independent campaigns that have been created to encourage people, who are upset with economic injustice, to move their money out of major banks and into credit unions.
The Move Your Money Project’s website accuses Congress of doing little to change the “Too Big to Fail” financial institutions and encourages consumers to take matters into their own hands. Credit unions are one of their suggested alternatives.
The Occupy Your Bank Account, a group on Facebook, calls consumers to move their money to nonprofit credit unions by Nov. 5 to send a clear message to banks, that conscientious consumers do not agree with their practices.
Credit unions may look like a bank on the outside by cashing checks, offering savings accounts and operating during normal banking hours, but they are, in fact, a lot different from the banks that were investigated for misusing federal bailout money and constantly increasing fees to profit shareholders.
How Credit Unions Work
Credit unions are structured by a democratic system. Instead of customers, credit unions have members. When opening an account, members will contribute a small sum of money. This money will stay in their savings account and is seen as their share of the credit union. Each member has one vote that is used to elect new board members. Unlike banks that have selected shareholders whose primary interest is profit, credit unions have a board of volunteers who work to be the voice of the members. They work together to help structure and approve new policies. Because credit unions are nonprofit, any additional revenue that is made goes back to the member in the form of lower interest rates, discounts and improved services.
History of Credit Unions
Credit unions were created in the 1800s as a cooperative in Germany. In 1850, Herman Schulze-Delitzsch addressed the need for credit. He organized the first cooperative credit society, which was known as the People’s Bank. This later led to Raiffeisen Heddesorf’s goal to provide credit to farmers. He formed the Heddesorf Credit Union in 1864 to help German farmers purchase equipment and livestock for farming needs.
Through the years, the credit cooperative spread as the need to deposit money increased. In the 1970s, the National Credit Union Administration became an independent federal agency that insured the deposits of credit union members. To this day, credit unions stand by the idea of people helping people and continue their practices of being nonprofit financial institutions.