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#47536 - 12/09/02 03:23 PM Credit Union vs. Banks
teresa Offline
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teresa
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Maryland
I need some advice. I am currently candidating for an internal audit position with a credit union. I currently work for a state-chartered Fed member bank that was previously a national bank. I'm afraid I don't know a lot about credit unions. Anybody out there work for a credit union? Are they subject to the same regulatory laws? Help me please!

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#47537 - 12/09/02 04:04 PM Re: Credit Union vs. Banks
straw Offline
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I too recently made the transition from bank to credit union. I previously worked at a non-member state-chartered bank as well as a national bank.

I am getting a crash course in credit union regulations. Most are not that different. I have found Reg DD tolerance is greater for credit unions than banks.

Most everything else is similar. Big difference is what type of credit union? There are many more regs for a federally chartered credit union. My CU is not federally chartered, so the applicable rules are used as guidelines, rather than requirements.

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#47538 - 12/09/02 05:51 PM Re: Credit Union vs. Banks
KSherrell Offline
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Rules are usually more stringent for Banks than CU's, so if you have a good handle on Banks' rules you'll do just fine with a CU. CU’s are generally a lot smaller than banks, and as such operate a little looser…”Big” Credit Unions have 1 Billion assets… “small” “CU’s can have 100 million or less…

All the big Reg's apply. X, Z, CC..etc. The Federal Credit Union Act lays out rules for CU's and the NCUA has oversight.

Straw if correct about what kind of charter you have can make a big difference. State and Federal Charters can differ drastically on what CU’s Requirements can be. There are also some big concerns for CU's that you don’t have with banks, like Field of Membership and CUSO's

www.cuna.org has some info that you might find handy. Also each state has a Credit Union League that you can call and get really good info/help.

Good Luck

-Kevin

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#47539 - 12/09/02 08:21 PM Re: Credit Union vs. Banks
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Just don't go! I took a turn in the CU world and it's like functioning in a Mom & Pop store versus a Supermarket (banking), epspecially when it comes to regulations, etc. They are audited by the NCUA, normally have no business accounts, no business lending, no always no Federal or State tax. Once you make a switch, it may be difficult to get back to the banking world, so really give it some thought.

On the other hand, CU employee benefits are top notch due to the fact that if you don't pay tax it's a lot easier to make money. Good luck!

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#47540 - 12/10/02 01:16 PM Re: Credit Union vs. Banks
teresa Offline
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Maryland
I hadn't considered the impact of leaving the "banking" world on my career. Working at a bank the only thing you learn about credit unions is that they are evil because they pay no taxes!

I'm not sure yet about the comparison of benefits but I know the starting salary is a good 20% higher than what I am making now, which makes it worth looking into at least.

Thanks for your thoughts.

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#47541 - 12/10/02 01:20 PM Re: Credit Union vs. Banks
teresa Offline
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Maryland
Thanks for the website Kevin. It has a lot of good information about credit unions.

I had my interview yesterday. Boy has it been a long time since I've done that!

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#47542 - 12/10/02 04:25 PM Re: Credit Union vs. Banks
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20% is worth pursuing, but just know that a lot more is happening in the banking world, i.e., compliance/auditing, etc. but CU's have a better track record of taking care of the worker bees, e.g. mergers are not the norm, benefits tend to be better, it's really, really hard to cause a CU to go south (be taken over and closed), etc.

My personal opinion: working with a CU is like joining the Democrat Party, while most banks are run by Republicans. So, if you are already a Democrat you will do well to look at a CU for employment.

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#47543 - 12/10/02 06:21 PM Re: Credit Union vs. Banks
MackenzieS Offline
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Oklahoma
I went from banking to credit union and then back to banking. I never could grasp the concept and attitude of credit unions, however that is not why I left. I left because we had an automobile contract come in from a dealer and some of the information in the FED BOX was incorrect, so naturally it should go back to the dealer to correct...well the VP (a real vice president) told me to mark through it with a pen and "just fix it"!!!!!! I tried to explain Reg Z to them and that it would invalidate the contract and I refused to do it. Needless to say we parted ways shortly thereafter. I was always eager for the NCUA to perform their exams because I personally knew how many violations flowed through our department alone...amazingly we always came away unscathed. It is just a different world, and my benefits were not much different than they are now. This is only my experience and I know that I just worked with a bunch of idiots.....not all credit unions are the same. Good luck.

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#47544 - 12/10/02 07:01 PM Re: Credit Union vs. Banks
teresa Offline
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Maryland
Oh no, there are idiots at credit unions too?????

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#47545 - 12/10/02 07:08 PM Re: Credit Union vs. Banks
KSherrell Offline
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CU's are a strange animals. One of big differences is that their Board of Directors are volunteers, and 99% have no idea about banking.

I know of one CU BoD's that thought they could vote to ignore the TILA.

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#47546 - 12/10/02 07:11 PM Re: Credit Union vs. Banks
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My experience was very similar especially the “I never could grasp the concept and attitude of credit unions” part. Most CU’s are run like Mom & Pop stores with very little review by the NCUA. Any banker that goes to a CU had better be prepared for a culture shock, much worse than going from a big bank to independent banking.

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#47547 - 12/10/02 07:24 PM Re: Credit Union vs. Banks
Don_Narup Offline

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How can they do everything a bank does, provide services to anyone that walks in the door, not pay taxes and escape CRA?
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#47548 - 12/10/02 07:36 PM Re: Credit Union vs. Banks
Skittles Offline
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I would assume that's because their clientele is supposed to be segregated in some way - like Ford Credit Union or the Teacher's Credit Unions.
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#47549 - 12/10/02 07:36 PM Re: Credit Union vs. Banks
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They have the votes and can generate voter turnout, big time!

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#47550 - 12/10/02 07:46 PM Re: Credit Union vs. Banks
Bartman Offline
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Springfield
Grist speaks the truth re: culture shock.

During my last round of post-merger interviewing, I entertained an offer to serve as director of marketing for a local CU. Seems like every product the CEO mentioned, I ended up asking "...and you don't charge a fee for that, either??"
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#47551 - 12/10/02 07:58 PM Re: Credit Union vs. Banks
MackenzieS Offline
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Oklahoma
Don't get me wrong, everyone has idiots at their establishment...yes, bank's do too. I just can't explain it in words what the mentality is, the best I can relate it too is that they kind of shoot from the hip and feel like they can make up rules as they go and ignore the ones they choose. And let me preface this with saying that my experience occurred even before I was in compliance, if that tells you how obvious the right vs. wrong was. Bank's are so heavily regulated and require strict internal controls otherwise you get written up by your regulator, I don't know anything about NCUA examiners but there never was the "aura" about the examiners coming into the CU like there is when the FDIC or state comes into the bank. Now we spend tons of mantime making sure our i's are dotted and t's are crossed before an examination, and with the CU that never occurred. Weird.

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#47552 - 12/10/02 07:58 PM Re: Credit Union vs. Banks
Dan Persfull Offline
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OK, I've stayed out of this as long as I could. I worked for a CU for 3 years prior to coming to work here.

This is my first RANT, so be warned.

They most definitely have a different outlook on how they conduct business. If you are a compliance person, be prepared for a big shock when you go into the CU arena. If I had a dollar for every time I heard "Well, we are doing this in the spirit of the regulation, therefore the NCUA won't site us for the violation." I'd be retired. I never saw the NCUA in the 3 years I worked at this CU.

The people at CUs are great to work with and they definitely believe in customer service, doesn't matter how many regs you bend or violate.

Also, don't make any suggestions that will increase fee income. When you mention charging the "members" a fee for this or that service you become Mr. Scrooge. Give up on thinking how to increase income for the CU. If they do accept an income generating idea, the profits will go back to the members, not the employees, in either reduced loan rates or increased deposit rates. (Kind of defeats the purpose of generating the income.)

I, like others have mentioned, never could buy into their mentality. Also, not only do their BODs not know anything about Banking, probably 85% of the employee base doesn't know any thing about banking. Not their fault though, they've never been taught anything different.

I came back to the bank basically for the same reason you're considering going to the CU. My benefits at the Bank are better and I also came at a 20% increase in pay.

CUs are not bad, they just do things differently and after being in banking for a number of years it will be hard to adjust your thinking.

Why did I go to a CU. Went through a downsizing in 97. Were no local bank jobs at the time. Why did I leave, money and to get back into the real world.

End of rant and my apologies to the CU participants here on BOL that may have taken offense. None was intended.
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#47553 - 12/10/02 08:12 PM Re: Credit Union vs. Banks
teresa Offline
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Maryland
Whoa!!! Now I'm really having second thoughts. At one point during my interview yesterday I wanted to tell them that about the only thing I knew about credit unions is that bankers are taught (and encouraged) to hate them. But, I didn't think that would go over too well.

The good news is that I'm not really in the market for a new job, I was just seeing what was available and this came up. So its OK if things don't work out.

I'm not sure what the board's banking background is but the ones that participated in the interview really quizzed me on several different regulations. When I asked if they currently had a compliance officer I was told "yes, but we can always delegate it somewhere else." I kind of got the impression that it would be with whoever took the job!

I've really appreciated everyone's input and advice.

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#47554 - 12/10/02 08:41 PM Re: Credit Union vs. Banks
DawgFan Offline
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In reply to:

But, I didn't think that would go over too well.





Yeah, you're probably right . I have heard that the NCUA is not NEARLY as "tight fisted" when it comes to regulatory guidance. I have never worked for a credit union, but based on comments from those of you who have, it seems to me that the way CUs are set up lends them to the kind of mentality we have been discussing here. Just an observation.
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#47555 - 12/10/02 08:51 PM Re: Credit Union vs. Banks
NancyF Offline
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PA

Many large credit unions are like banks, except for the obvious differences. The credit unions described here seem to be the smaller ones and you would find many of the same "cultural" differences between big and small banks.

During my years in public accounting, clients included both community banks and credit unions. The credit unions were considerably smaller than the community banks and yes, I found the mentality of both employees, management and Board members to be different. But, I don't think that one can really generalize. It does depend on the specific bank OR credit union.

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#47556 - 12/10/02 08:51 PM Re: Credit Union vs. Banks
Dan Persfull Offline
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In reply to:

I'm not sure what the board's banking background is but the ones that participated in the interview really quizzed me on several different regulations.


That's a good sign. My rant wasn't to imply that all Credit Unions sluff off the regs, there are definitely banks that do the same, but they are usually under a MOU or a C&D, I've never seen nor heard of a CU being under a MOU or a C&D.

Each Credit Union operates differently just as each Bank does. However, you will see a whole different attitude at the CUs, and they're not all bad attitudes just different.

My rant also wasn't intended to dissuade you from considering the CU. Only you can make the decision that is right for you. So weigh your options, the pros and cons and good luck in what ever you decide.
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#47557 - 12/10/02 09:05 PM Re: Credit Union vs. Banks
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Well, my brief experience in the CU world included an examination by the NCUA - it was a $200 million CU and in walks one NCUA examiner who completed the entire exam spending most of his time talking to me about other job opportunities.

The directors are primarily interested in attending trips in vacation type places, have no investment, have no clue. CU's are really employee coops that are not taxed, have no shareholder demands - it's a simple life, but you end up wondering what's the point!

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#47558 - 12/10/02 09:30 PM Re: Credit Union vs. Banks
MackenzieS Offline
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Oklahoma

In reply to:

Also, don't make any suggestions that will increase fee income. When you mention charging the "members" a fee for this or that service you become Mr. Scrooge. Give up on thinking how to increase income for the CU. If they do accept an income generating idea, the profits will go back to the members, not the employees, in either reduced loan rates or increased deposit rates.



I have an Uncle that is the President of a credit union in my same state and when our bank began searching for ideas for increasing non-interest income, I struck up a conversation with him about overdraft protection programs and offering debit cards (this was some time back), and I tell you what, he nearly fainted at the thought! "Overdraft protection was just a scheme created by banks to rob their customers of more money and debit cards were a necessary evil but we would never charge a customer a monthly fee for the convenience or for a one time setup fee." Needless to say I don't broach the Banking/CU relationship with him anymore. I was surprised at the reaction, but then again, he has been a Credit Union employee for a long time...raised in that environment. I too am not here to dissuade anyone's opinion on employment decisions, these are my pent up aggressions talking and they have been pent up for many years. Credit Unions probably have better consumer customer service than any bank that I have worked for, but thats about the best I can do.

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#47559 - 12/10/02 09:39 PM Re: Credit Union vs. Banks
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CU's do have good "member" service, but if banks were not taxed there would be a lot more people running around providing customer service. The point is that CU do give back to members, e.g. higher dividends than bank interest, lower loan rates, etc. but it's no a level playing field and not the way business is conducted, generally, in America.

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#47560 - 12/10/02 10:03 PM Re: Credit Union vs. Banks
MackenzieS Offline
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If it walks like a duck and quacks like a duck it should be taxed like a duck.

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