Not your father's credit union (surviving socialism)

MarketWatch ^ | 11-17-08 | Jennifer Openshaw

[RKBA Democrat]

My recent article on the advantages of credit unions versus traditional banks and savings institutions generated a lot of reader interest. One of the interested readers was Benson Porter, a former Washington Mutual executive, now chief executive of Addison Avenue Federal Credit Union.

In a recent interview, Porter reinforced some of the differences between credit unions and their banking counterparts, many of which were captured in my previous article. See related column.

Then he shared several important ways credit unions are breaking old molds and evolving faster than some may realize:

Practically anyone can join. In the old days, most credit unions were organized around one or a select few employers. You had to be an employee to be eligible. By law, today, you still have to belong to something, but that's gotten a lot easier. For instance, you can become an Addison Avenue member simply by joining the non-profit Financial Fitness Association. The membership fee is $5.

[RKBA Democrat]

Credit unions are insured by the NCUA under terms that are essentially the same as those for banks by FDIC.

While credit unions do fail from time to time, the impact is not as dramatic as it is has been with the banks. Credit unions are usually smaller and more conservatively managed. They also are not subject to the Community Reinvestment Act, which is the underlying cause of a lot of the subprime (garbage) lending that banks did.