The evolving banking scene: A guide to covering credit unions
Credit unions are shoring up a stronger asset base, more members and are in a prime position to snag market share from banks in the next few years. It’s an industry business journalists shouldn’t neglect as the banking scene evolves.
Credit unions are financial institutions that are similar to banks. They offer savings and checking accounts, mortgage products, auto loans and other financial products to account holders. But unlike banks, credit unions are not driven by profit. Instead, they are owned and operated by their members to create affordable credit in the community and to foster local economic development.
Business journalists – including banking journalists, personal finance reporters, technology reporters and even community reporters – can find a wealth of timely and interesting stories in the credit union industry. The media rarely covers the credit union industry in-depth, so reporters who spend some time here will likely find their stories – local, state or national – can be standouts.
The nation’s 7,386 credit unions reported a 12.8 percent increase in total investments, a 4.2 percent increase in total assets, a 0.6 percent increase in members and a 0.1 percent increase in employees in the second quarter of this year compared to a year prior, according to data from Callahan & Associates, a D.C.-based credit union consulting firm. These cooperatives grapple with many of the same economic struggles as banks do, including the impacts from mounting foreclosures and soaring unemployment, but credit unions are trying to leverage financial woes to their advantage.
For example, credit unions and smaller community banks have the advantage of keeping debit swipe fee revenue streams over larger banks with recently capped swipe fees. So, credit unions are promoting the fact that they don’t feel pressure to charge checking account fees and can more easily keep their rewards programs. Several credit unions have even launched anti-bank marketing campaigns, encouraging consumers to “ditch your bank” because of fees.
Personal finance reporters should follow those cost-of-banking trends for consumers. Story options include analyzing credit card rates and rewards programs, looking at checking account yields or reviewing mortgage product offerings. Sample some credit union product offerings in your areas. Then use resources such as bankrate.com , cardratings.com or nerdwallet.com to give context to your analysis. Are credit unions offering better deals than banks in your areas? Do they tend to offer higher yields on checking accounts or offer more free checking? Why or why not?
Journalists on the banking beat should monitor how credit unions’ financials compare with banks’ financials as the economy eases out of a recession and as new regulations take hold. Will credit unions continue to shore up more members? Will banks find a new way to preserve their revenue? Will they keep their lion’s share of the banking market or is the market in your area turning toward credit unions?
Just as journalists on bank beats turn to the Federal Deposit Insurance Corporation for information on banks, they can turn to the National Credit Union Administration, a federal regulatory body for credit unions, for financial filings. Financial information for individual credit unions is found on their quarterly 5300 call reports. Reporters can also reach out to consulting firms or analysts for more context on financial reports.
Technology reporters can follow how credit unions, which are traditionally slower than banks to adapt new technology because of their smaller budgets, are now stampeding toward mobile banking and streamlined loan approval processes, especially for mortgages. Other credit unions are automating their branches or ramping up social media efforts.
The credit union industry houses a plethora of stories for real estate reporters, too. How are foreclosures impacting credit unions? How are credit unions working with homeowners to prevent foreclosures? How are credit unions helping members refinance as interest rates hover in record low territory? What innovative mortgage products do credit unions offer to first time homebuyers, or for longtime homeowners looking to tap equity with reverse mortgages?
Savvy community journalists, covering topics from municipal governments to neighborhood events, should also find a slew of stories if they connect with their local credit unions. Many states are only recently starting to allow credit unions to accept municipal government funds. Does your local government keep its deposits in a credit union? Does it want to? Why or why not?
Credit unions often have a very active community voice, often holding food drives, contributing to schools or offering scholarships or sponsoring local events. What kind of budget do the credit unions in your region have for their annual community outreach. Are they improving those efforts or cutting back? Why?
No matter the size and scope of your beat, the credit union industry likely holds a story worth reporting. For more tips on digging inside credit unions, don’t miss the two-part video series below from videographer Brianne Aiken.
Credit Union National Assoc., the industry’s largest trade group, can be another useful source of data and information for reporters. The web site is wwww.cuna.org. Another site, http://www.aSmarterChoice.org, has basic information and an online locator tool to help consumers learn about credit unions and find one they are eligible to join.