Credit unions, which as a group weathered the financial crisis better than banks, have been expanding their range of products and offerings recently. Today, credit unions offer much more than just ordinary deposit accounts and loans. A growing number are rolling out student and small business loans, mobile banking and even reward programs. This trend is happening even as banks are curtailing perks like debit rewards, and tightening standards for lending.
Dan Egan, president of the Massachusetts Credit Union League, tells WalletPop that credit unions are more on the cutting edge in terms of services than most people realize. For instance, the service that's now been popularized by some big banks in which you take a photo of a check to electronically deposit it was started by a credit union a full year and a half ago, Egan says. They did it to make it more convenient for customers who didn't live close enough to a credit union branch to physically deposit a check.
In addition, more credit unions are developing the technology to allow customers to bank online from a desktop computer, or via a mobile application on their smartphones. Again, these high-tech programs help credit unions -- which may only have a handful of branches -- compete with banks that have a larger physical footprint and more branches. As this article notes, a growing number of credit unions are embracing branch-sharing programs that give customers access to financial services at a greater number of locations.
Another area in which credit unions are expanding is student loans. "A lot of credit unions are now switching to student loan programs because there's pent up demand for that," Egan says. "The cost of education is growing demand for student loans."
Credit unions' move into small business lending is significant not only for the companies that secure the loans but for the economy as a whole, Egan says. "With the difficult economy, small businesses had difficulty getting access to capital. Credit unions were asked more and more to produce small business loans and they have," he says. Small businesses suffered when banks curtailed their lending, and many small business owners today are forced to use credit cards to fund their enterprises, which is a risky undertaking. Egan calls this a "growing trend."
Finally, Egan notes, "Credit unions are reestablishing in many cases their commitment to free checking," even as banks pull back on these kinds of account-holder benefits. Some credit unions, according to this article, are even rolling out reward programs similar to ones banks are currently discontinuing. Members can use competitors' ATMs for free, get reduced rates for loans and even accrue rewards points they can redeem for goodies like merchandise rewards.
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