Credit unions are appropriate for some consumers.
Most High Net Worth individuals and definitely all large companies tend to bank with the big banks. The Fortune 500 banks with the big banks. Small
credit unions do not have the capacity to handle the needs of larger companies.
You have to remember - Big banks like Chase and Bank of America are really a hodge podge of acquisitions of other banks. It is only recently that
these big banks have attempted to consolidate computer systems, and get their work force all on the same page as far as operations is concerned.
The mega-banks have trillions - yes trillions -- of dollars in Assets, and hundreds of billions of dollars in deposits. They earn fee income from
multiple sources, not just Consumers. In fact, these big mega-banks have a wide, diversified platform of products and services - everything from
credit cards to mortgages to international wires to sophisticated treasury platforms.
So, let's say you move your deposits over to a community bank or a credit union. What about your mortgage? How about your car loan? What about that
jet ski loan or boat loan? Credit cards? Investments? Chances are, you still have some tie in to the big banks in some form or fashion.
And, guess what? If you work at a large or even medium-sized company, chances are your company banks with a mega-bank.
Your electric bill? When you send in your electric bill, that check gets deposited at a big bank. Rent payment? Big bank. Water bill? Taxes? You
get the idea. Whenever you write a check, it's pretty certain that those funds will eventually hit a big mega-bank at some point in the transaction,
in some form or fashion.
Pay for the movie with a credit card? The movie theater just paid 2-3% to, yes, a mega-bank that owns the credit card processing company.
You are going to be hard pressed to remove big banks from the equation of your daily life. Every payment you make - credit card or debit card or
check -- will ultimately be run through a big bank.
Well, what about that local community bank? Or credit union? Guess what? Many of these smaller banks rely on the big banks for funding, credit card
processing, etc. Small banks look to big banks for funding on participation loans. Even the small banks are tied to the big banks in some form or
edit on 9-7-2012 by CookieMonster09 because: (no reason given)