Thursday, November 5, 2009

“Bailouts are for Boats”

If I have a good grasp on my readers, I think I can say with some certainty that majority of you fall into two categories: 1. You use a local credit union as your primary financial institution. Or 2. You use a “Mega Bank” for your banking needs.

I know, very insightful.

Community financial service providers are really trying to leverage the current insanity of the financial system to grow their businesses. What a better time to start advertising campaigns then when your competition is making a fool out of themselves, right? North Coast Credit Union in Bellingham, Washington is advertising using the slogan “Bailouts are for Boats” – very catchy.

You have heard me say it before, I believe all people have the same underlying desire. To have personal service from a professional who is more of a teacher and less of a sales person.

This desire didn’t come from a new found knowledge of phrases like credit default swap, collateralized debt obligation or subprime mortgage. The underlying urge to return to community  was there well before the economy took a tumble, the tumble was just the catalyst to start changing.

A lot of people are drawn to the “Mega Bank” because of a perception that it is just more convenient. “They have 50,000 ATM’s across the country, they have online banking on my phone, they let me print a picture of my pet iguana on my debit card and if that wasn’t enough, last time I was in their branch they offered me some rolling luggage for filling out a credit card application.”

True Story:

I have not had a need to physically go to a branch or an ATM in probably 3 years until last month. All I need is my debit card and online banking! Last month, my wife and I went to our annual Labor Day  family reunion in Minneapolis, Kansas. Yes you heard me right, not Minnesota, Kansas – population 1000.  In Minneapolis cash is still king and checks are still accepted, we haven’t carried checks since 1995.

We needed cash to pay for everything but like I said earlier, I haven’t been to an ATM in 3 years, so I never have cash. I desperately needed $50 to get through the weekend!

So you are probably saying to yourself, well Andrew, if I had been there I would have just whipped out my Wells Fargo debit card and gone to the local ATM (which is probably 1 of the 50,000 they own). Here’s the catch, there are no ATM’s in Minneapolis and the bank is not open on the weekends – a lot of good that 50,000 ATM network would have done! I was just out of luck, it didn’t matter if I banked with Gallup Federal Credit Union or Wells Fargo, neither could help me.

“It’s easier to get a divorce than to change your checking account” Texas banker Edward Speed said in an interview with The New York Times. change

I get it, change is hard! But I like to think that in this case, change is worth it.

I really want to stimulate some discussion here (literally, please post your thoughts in the comments section below). Given all that has taken place over the last 2 years, what makes you believe in a local credit union? If you still bank with a “Mega Bank” why haven’t you switched? What would make it easier to switch?


  1. I bank with a mega bank. Have been since I moved to this city and because some relatives here said it was a good bank to be with. I have no complaints, but I have always been interested in having at least a savings account at a credit union, but ever since (I can't remember the dates) the time there was that scandal with credit unions, I haven't pursued that.

    I haven't read all of your blog yet, maybe you address that later, but could you explain what the advantages/benefits are to banking with a credit union over a regular bank are?

  2. Are you reading The Financial Brand? I was the only person on earth who wrote about North Coast's "Bailout" campaign:

    If not, please swing by and subscribe. You can find all the stories that the New York Times used to write the article you must have seen the other day, "Small Banks Move In As Giants Falter." No joke, every
    single campaign mentioned in that NYT article was sourced from They even pulled the artwork of the 1st Bank plane banner from my site!

  3. @Mcdougalby: Thanks for commenting! I need to write a full post on credit union benefits but what it really comes down to is ownership. A CU is owned by its members and it is a nonprofit. That means that the members (depositors) have control of the credit union's destiny and ultimately the profits! Way different than a bank that is owned by shareholders, their objective is stock price increase, not customer value. More to come on this for sure!

    @Jeffry Pilcher: I checked out The Financial Brand - Cool site! Thanks for following my blog; I'll be sure to reciprocate.

  4. I think I'm somewhere in the middle as I currently bank (at least for 45 more days or so before Great Western takes over) Tier One who was a regional bank. I suppose I never switched because I did not know what the difference was, and my perception was that it cost money to join (whether or not that is true). However, I am looking into CU's at the moment.