LONDON (8/11/14)--Banks are leaving poor Americans behind, but those neglected consumers can find a willing financial institution in credit unions, said a recent article in The Guardian about recent credit union growth.
Credit Union National Association interim Chief Economist Mike Schenk was cited by the British publication that part of the reason credit unions have performed well recently--with membership climbing 2.9% this year and overall memberships topping 100 million this month--is that banks are ratcheting up fees and charges.
The Guardian in its Aug. 8 article takes it even further.
"Many Americans are not banks' ideal customers, not enough money, not enough transactions, and they are punished for it with a barrage of fees," the article said. "In some cases, they are denied bank accounts altogether."
When bank fees disproportionately hurt those who don't have any reserve income, or when banks levy fees for not having enough money in the first place, or when banks charge service fees simply to maintain a checking account, for many Americans, banks simply aren't a financially viable option, the article said.
But that's where credit unions can step in.
Nearly three-quarters of the largest credit unions in the United States offer free checking to members, according to Bankrate's 2014 Credit Union Checking survey, The Guardian reported.
At banks, only 38% offer free checking accounts.
"Banks are in the business of making money," the article said. "Poor Americans are not a good bet for them, they have too little money. It's not the consumers who are turning their back on the banks. It's the banks who did it first.
"Left out in the cold, they go to the one place that welcomes whatever little amounts of money they have: credit unions."