(no subject)

[redbird]

Is joining a credit union an irrational way of handling the impulse to
hide my money under a mattress?

Comments

[ailsaek.livejournal.com]

We've got all our money in and our mortgage through a credit union. I have no idea what is going to happen now.

[r-ness.livejournal.com]

I don't think joining a credit union is irrational in the first place, so I'd say no. :)

[kightp.livejournal.com]

As a long-time credit union member, I'd say "no" to the "irrational" part, at least.

I'm really, really glad my own money is in a credit union right now instead of a bank. It may not be bullet-proof, it's locally controlled, owned by its depositors and federally insured.

[eleanor.livejournal.com]

Credit unions are stable and reputable institutions, and it's a perfectly sane thing to do. You'll also get a better night's sleep if your mattress isn't all lumpy and stuffed with bills. However, your money is insured up to $100,000 per bank per person, excluding joint accounts. This is to say that you and Cattitude could each have $100,000 in savings, for instance, and you can still have a joint checking account at the same bank. You can also each have $250,000 in retirement accounts at the same bank, and you're good. Of course, if you have that much money, there might be better things to do with it that are still relatively safe.

[papersky.livejournal.com]

I wouldn't feel too secure on that one in the US right now.

Insured is lovely as long as the insurers don't fail too.

[daharyn.livejournal.com]

It's insured by a gov't agency, the FDIC. If that fails, I think we'll have larger problems (of the "fleeing over the border in the night" sort). My bank failed/was taken over last week and I haven't had any problems accessing my money, despite my fears of same. (I am moving things to my union's credit union, though.)

[eleanor.livejournal.com]

I'm not talking AIG, but the FDIC, which was created in 1933 to prevent the bank failures of the great depression from ever happening again. It's true that it could fail, too, but if it got to that point, I think we'd be looking at a total failure of the government, and currency wouldn't be good, either. Of course, diamonds and gold have always been portable and easily convertible wealth, and if I worried about the FDIC, that's where I'd want my money.

[redbird]

If I were thinking in those terms, gold. Diamonds are propped up by a cartel and its ad campaigns, meaning they're not saleable for anything close to what you pay for them, and that value may not hold out much longer against cheap synthetics.

[baldanders.livejournal.com]

I gather it's an eminently rational response, and I wish it were an option open to me and Velma.

[gothgeekgirl.livejournal.com]

The rules for who can join a credit union have loosened considerably over the past 10 years. I'd check the membership requirements of those credit unions with offices near you.

[baldanders.livejournal.com]

Thanks, I will.

[redbird]

The one I'm considering has geographic eligibility (in this case, Harlem, Washington Heights, and Inwood); there might be one in Brooklyn that you're eligible for.

What prompted me to look again was not just the financial news, but an ad in the paper from a credit union that is also geographically defined, but their geography is anyone who is living, working, going to school, or doing business in Nassau or Suffolk County, given them a potential membership in the millions.

[mjlayman.livejournal.com]

My credit union serves everybody who lives, works, or goes to school in the county and the two cities in it. That's pretty open. You can probably find one if you look around a bit.

[ckd]

An institution beholden to its member-customers, instead of random stockholders? I'd say it's not only not irrational, it's well in the direction of rational.

Our accounts are split between a (local) credit union and a (non-local) bank owned by an inter-insurance exchange (similar to a mutual, but I suspect harder if not impossible to turn into a corporation).

[papersky.livejournal.com]

I have always banked with credit unions and/or mutual banks/building societies/caisse populaires. I just find them more ethical.

It seems worth noting that your bank is least likely of all US banks to fail, because it isn't centred in the US.

[fjm.livejournal.com]

We kept moving building societies to avoid de-mutualisation. By the end there was only the Abbey left.

[fivemack.livejournal.com]

Umm, aren't Nationwide the one remaining decent-sized mutual? I've just opened an account with them - as a shameless rate tart my money is in Halifax and Bradford & Bingley, and the attractions of the not-putting-in-on-slow-horses market are starting to show.

[fjm.livejournal.com]

I was in Reading. A limited set of choices.

[fjm.livejournal.com]

I would recommend splitting your resources between at least two credit unions.

[redbird]

It is remotely possible that there are two credit unions I am entitled to join, depending on the qualifications for membership in the Association of American Ukrainians that sponsors one on the Lower East Side.

[r-ness.livejournal.com]

You might well, actually. I'm actually eligible to join two. One from place of employment and one from place of residence.

[daharyn.livejournal.com]

Seems quite rational to me, but hey, my perspective may be skewed by my own worrywart qualities and recent experiences.

[mactavish.livejournal.com]

No more irrational than putting it in the mattress. (I was thinking jar in the closet, myself.)

[xiphias.livejournal.com]

It is irrational to bank with a for-profit bank instead of with a credit union in the first place, if you have a choice.

I can't imagine a rational reason to choose a for-profit bank over a credit union.

So, no, it's not irrational to switch to a credit union. It's irrational NOT to switch to a credit union, regardless of the health of the financial markets.

[volund.livejournal.com]

Perhaps not.

As I don't know where you bank, I don't know how (un)exposed your bank is.

AFAIK, my bank (Commerce) is probably OK. It's not one or part of one of the new Big 3 (BofA, Citi, JPMorganChase) who I understand now have 30% of all depositors in the country between them. Before it's current merger, it didn't do a lot of mortgages that I know of, and it's credit card business seemed limited to already existing customers. And the bank it's merged into is a Canadian "Big 5" bank (TD) that didn't fool with that subprime garbage at all, at all, at all.

[redbird]

HSBC, which among other things owns a large part of Hong Kong. They bought the bank that bought the bank that bought my nice little savings and loan. What they have going for them is convenience, in particular lots of ATMs (but while I was able to get money without a fee in London, Hay-on-Wye, and Hong Kong, they don't have branches in Montreal or Boston, which are actually more relevant).

[erik]

I'd say not at all.
Or if not a credit union, a small local bank. The sort of bank too small to have been playing in the mortgage funds market. My bank has two branches and is doing just fine.

[gothgeekgirl.livejournal.com]

I echo the rest of the satisfied credit union members here, and also note that credit unions are insured by a different agency, the NCUA (http://www.ncua.gov/).

[kijjohnson.livejournal.com]

Actually, I am having this exact discussion with myself.

[bibliotrope.livejournal.com]

Credit unions are good things, not irrational at all.

I have a savings account, my Christmas Club account, and my car loan at the credit union. The money is taken directly out of my paycheck (and the car payment made automatically!), so I think about it less. And it has a larger rate of interest on the savings and a smaller rate on the loan than I could get at commercial banks.

I do have my checking account and another, smaller savings account at the commercial bank nearest where I work (and a couple of Certificates of Deposit at yet another bank where I used to have my checking; I've just never bothered to move the CDs). This sounds less convenient -- it probably is -- and maybe irrational, but I'm less tempted to take money out of the CU, while it's available when I do need it.

[nolly.livejournal.com]

I've been using a local credit union almost exclusively for about 10 years now. I"m not a financial expert, but it seems like a good choice to me.

not as confident as I used to be

[webbob.livejournal.com]

Given the overall state of lax regulation in banking, I'm less confident in Credit Unions than I used to be. Some of the recent randomly-named credit unions that seem to have sprung up in the last seven years or so make me nervous. And some of the established credit unions might have been devoured from the inside by financial vermin and not noticed.

However, assuming that your credit union is doing what it's really made for and holding deposits from some members and making loans with that money to other members, you're safe except for a direct bank run.

In spite of the fact that I mostly hate "It's a Wonderful Life" these days, the scenes of the near loss and rescue of the Bailey Savings and Loan are a good cartoon of banking en large. Frank Capra made a more realistic *ahem* picture earlier in his career, which starred Walter Huston with a similar run-on-a-bank situation. In the earlier picture, "An American Madness," (I think) Huston saves the bank in the few hours available to him when the doors can be closed and withdrawals prevented.

Anyway, if the bank's monetary base is mostly you and your fellow members AND you think that they have enough fellow-feeling to avoid the run on the credit union, you're good. If you think that they might take a "Devil take the hindmost" attitude, stashing some money in a mattress would be slightly better than leaving it where it is at some point.

With respect to Jo, the FDIC deal seems like a lead-pipe cinch: the people responsible for insuring deposits are the one who own the printing presses in the Mint. Keeping money in a mattress is only likely to help until pre-Crash currency is outlawed, but I suppose that having a stash of it might let you buy a little more stuff on the eBlackMarket.

Credit unions are about taking the "will cooperate" in the Prisoner's Dilemna. There's power in a union, but power to harm. (Which is also a lyric from the forthcoming Billy Bragg/Kate Bush duet album.)

[editrx.livejournal.com]

Elric and I have had our joint account in a French-Canadian credit union up here in NH since we moved here (La Casse Saint-Marie -- St. Mary's), though it is its American cousin branch. We've been very happy with them -- we get better, and more personal, service than from the larger banks.

I have my business account and personal account with a bank, though -- and I'm thinking hard about moving them. Though, my bank is rooted in Canada (TD Bank -- Toronto Dominion). How that may be of help in this crisis since it's an American manifestation of a Canadian banking entity, I don't know. It may not mean anything at all, which may mean I'll move everything to St. Mary's. I need to do some more research.

All in all, I'd say credit unions are very helpful. However, be aware that the FDIC has been in trouble for decades -- this isn't really anything new. If the FDIC fails, we're all in deep shit.

[pir-anha.livejournal.com]

credit unions are by and large a good thing; i've always had money in a local CU; i like the more personal service, and the principle of the thing as opposed to a commercial bank.

but as others said, your savings in your bank are FDIC insured, and if the FDIC fails we're probably all up shit creek without a paddle.

my irrational thoughts don't go to hiding my money under a blanket, but to buying gold.

[mjlayman.livejournal.com]

The Mint has stopped making gold coins because of the run on them.

[pir-anha.livejournal.com]

interesting. i didn't know that.

fortunately i am not in the US, nor limited to buying US gold coins.

[r-ness.livejournal.com]

My understanding is that the US Mint is saying it's a temporary pause, not a permanent stoppage. Whether this is true or not is open to question, although they've restarted before and are likely to be interested in profiting from the increased demand.

I do find it ironic that the South African Mint still produces Krugerrands.

[pir-anha.livejournal.com]

yeah, and it turns out it's only for the buffalo gold, since the high demand has made them run out. apparently earlier this year they ran out of eagle coins too (but have restarted selling them).

why do you find it ironic that SA still produces krugerrands? i don't know much about them, other than that they're the first market-value bullion coin that's also legal tender, and were produced to promote SA gold.

[r-ness.livejournal.com]

Paul Kruger is on the Krugerrand. I think it's amusing that the ANC government is striking coins with a hero of the Boer resistance on them, rather than change the design.

Then again, I suppose it's all about reconciliation, and history (and perhaps marketing). I don't mind his being on the coins--and having roads and streets named after him and other heroes of the old regime--but the irony is certainly there.

[pir-anha.livejournal.com]

oh yes, of course. sorry, i had a *huh* moment there; i was focussed on the "still produces" with a much narrower time frame.

i think it's something the ANC would probably like to do away with, but can't really afford to. there's been quite the uproar about changing street names. and the coin bears his name, is world-famous, and much desired; that would be a real marketing blow, i agree.

[fivemack.livejournal.com]

I have irrational thoughts of buying gold from time to time, but I can't find any reasonable solutions for *selling* gold. If I have a six-ounce lump of gold, painted matt green and kept on my mantelpiece between the tantalum and the bismuth, and gold is worth £500 the ounce, I have no idea where I can take the gold and exchange it for £2900 or more.

gold

[pir-anha.livejournal.com]

*heh*. oh, nuggets are pretty easy to sell, and they tend to be worth more than bullion. jewellers, mineral dealers, and specialty gold dealers buy/sell them. of course this didn't do people any good during the great depression because possession of gold became proscribed (though i guess that wouldn't happen again because our currencies are no longer tied to the gold standard).

i was thinking coins though because they're even more liquid.

[don-fitch.livejournal.com]

What Webbob said.

Credit Unions are partly run under Federal Regulations (which have been gradually, but probably not excessively, relaxed over the past decade or so) and partly under policies established by their Board of Directors (or whatever), so there's some possibility of unsound practices.

My CU used to be limited to Los Angeles County Employees (active & retired), but there seems to have been a merger & expansion so it now admits any "Government employees". I keep about half my money there, and feel ... reasonably comfortable about it, even though the Federal Insurance wouldn't quite cover the total. The other half is in (*sigh*) WaMu -- about which I'm less comfortable, but not worrying since I decided (years ago) that Worry is a waste of time & energy. Pushing 80, I figure that if there is a Big Economic Collapse, the only thing for me to do is to try to cope & survive for a while. A younger person's mileage would, probably, be different.

I do note that the interest I'm getting from CDs at both places is slightly less than the published Inflation Rate, so I'm actually becoming a bit poorer day-by-day, despite being better-off than perhaps half of the American populace.

[mjlayman.livejournal.com]

Bankrate.com (http://www.bankrate.com) was mentioned on ML last night as a good way to check credit unions and banks.