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Fear anger prompt flight to Seattle CUs safety
SEATTLE (2/5/09)--Members are moving into Seattle's credit unions to find a safe haven for two reasons: fear and anger (Crosscut.com Feb. 4). A wave of credit union memberships arrived on the heels of fear when Washington Mutual, which was based in Seattle, collapsed. Another wave arrived when consumers became angry about Wall Street financiers' actions in the financial system turmoil. Boeing Employees CU (BECU) told Puget Sound Business Journal the credit union experienced a 50% increase in membership growth during the last half of September, the article reported. "The ways in which credit unions differ from banks are especially appealing right now," said Crosscut.com. "Credit unions are less vulnerable than commercial banks to market swings, and they don't pay mega-bonuses to executives or fly bigwigs around in corporate jets." It also noted they're not involved in subprime lending and are less likely to inflate appraisals; deposits are federally insured up to $250,000 and they're more familiar, which is comforting in economic turmoil. John Annaloro, president of the Washington Credit Union League, added that membership is increasing because credit unions concentrate on consumer loans, credit cards and residential mortgages, are jointly promoting sales with automobile dealers. And Whatcom Education CU said credit unions remain strong because members and boards aren't driven by profit. Instead they are driven by a sense of community, good service and other intangibles. They also are limited in risk-taking. Despite the growth, the article said, credit unions are preparing for harder financial times ahead, setting aside funds for future loan and lease losses. To view the entire article, use the link.
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