With 17 institutions in the Las Vegas Valley and nearly 30 in the state, credit unions continue to grow in Nevada and across the country. “Nearly a third of Americans now belong to credit unions,” said Tony Mook, president and CEO of Las Vegas’ Cumorah Credit Union and chairman of the Nevada Credit Union League. “Each credit union has a niche it tries to serve, and serve well. The growth of credit unions is a trend, and as a group, we’re striving for cooperative campaigns to grow memberships.” Through September 2003, Mook said credit unions account for $3.8 billion in nationwide assets and have loaned out nearly $2.5 billion to their members.
Financial institutions made up of members with a mutual bond – usually a similar profession, religion or school – credit unions have existed in America since 1908, and Nevada now has nearly 450,000 credit union members.
Originally created to fill a needed service, credit unions follow three basic guiding principles: (1) only people who are credit union members can borrow from the establishment; (2) loans should be made for “prudent and productive” purposes; and (3) a person’s character and desire to repay would be considered more important than an individual’s ability to repay.
With credos like “people helping people” and “judging by character”, credit unions are a great way for people to build credit for the first time or reestablish good credit, according to Mook. “Poor credit is a problem for lots of people these days,” he said, “and we can help get the individual back on the right track.”
Every credit union is unique in its service offerings, based on its members’ needs. Offering one-on-one, personalized customer service, credit unions generally provide low rates on loans and credit cards, as well as reduced fees and low rates on savings deposits. Unlike banks, credit unions are member organizations with officials elected by the members. Credit unions operate as non-profit organizations, and as such, they are not taxed like banks are. This gives them a competitive edge in pricing services.
However, credit unions also face several drawbacks. Being membership-oriented, credit unions have a limited customer base, and thus limited locations for branches and ATMs. Those limitations can become an inconvenience for consumers. Unlike credit unions, bank customers are generally willing to pay for the added convenience of multiple amenities and locations, while credit union members are not.
With technological advances in personal Internet banking and other areas, Mook said credit unions are beginning to use technology to their advantage by expanding and offering more convenient services. “We’re looking into new ways and improved services to attract members,” he said. “Several credit unions now offer Internet home banking and a co-op ATM network, allowing members from different credit unions to use each other’s ATMs.”
Where many credit unions once only specialized in automobile loans, several are now offering additional services, including home mortgages. “[Credit unions] are adjusting to their members’ needs,” Mook said.
Growth is the goal of every organization, business or company. Credit unions are no different, and are trying a variety of ways to increase interest in membership. “Credit unions have opened more fields of membership during the last five years or so, and that helps growth,” he said. “Today, several residential communities are even forming their own credit unions.”
The California Credit Union League, which serves credit unions in both California and Nevada, helps credit unions of all sizes combine individual strengths and offers their members a broad range of sophisticated financial services. “Networking and sharing ideas, successes and failures among credit unions is an important part of our growth,” Mook said.