The credit unions' products vary, but generally they are loans of $300 to $1,000 with an annual percentage rate of up to 18 percent. Unlike payday loans, in which borrowers sign over part of their next paycheck for the cash advance, the credit unions' new products have longer terms, from thirty days to a year.

Vann, 43 and a former clerical worker who is pursuing a career in TV production, got a $500 six-month loan from the Treasury's credit union in January, at a 16 percent annual percentage rate. The money cleared her payday debt and put her on her feet. Now she has a checking account with the credit union.

"Credit unions were created to offer credit to people with modest means," said Leslie Parrish, a senior researcher at the Center for Responsible Lending. "So, historically, it's very much in keeping with their mission."

It's like stamping out weeds and watching adorable kittens grow in their place.

Credit Unions Slowly Fill Void As Payday Lenders Leave D.C. [The Washington Post]
PREVIOUSLY: Payday Loans Die In DC
RELATED: How To Find And Join A Credit Union
(Photo: Dr. Hemmert)

For a few years I worked as an "Information Specialist" at the FDIC's call center (877-275-3342). Despite being the lone point of contact between the agency and the public (not to mention being one of the few federal agencies that employs a live call center staff), the minimal call volume only requires a small crew. But it's a tremendously helpful place to get basic referral information if you're having trouble with your bank, lender, or finance company.

Now, the call center's main function is to explain deposit insurance and transfer certain calls to regional offices. They don't know the ins-and-outs of bank regulations or what your bank is or is not allowed to do. However, they have a ton of phone numbers & addresses that they can give you, specifically for the agencies that regulate banks & credit unions (Federal Reserve Board, Office of Thrift Supervision, Office of the Comptroller of the Currency, and the National Credit Union Association).

They can also give you contact info for the different credit bureaus if you're trying to clean up a case of identity theft or are working to patch up your credit. If your issue is with a lender or a finance company that is not part of a bank, they can give you contact info for the state agency that might handle such complaints.

FYI, be prepared to articulate your issue in writing. Bank regulators, credit bureaus, and State AG offices won't even begin to think about addressing an issue unless they have a request in writing, be it via online inquiry (if available) or snail mail. While the FDIC call center won't accept complaints and can't really tell you how to go about resolving an issue, they can point you in the right direction and get you started.

Also, while a little dense, the FDIC's website (fdic.gov) has a wealth of searchable info and a pretty cool database where you can trace the succession of failed/merged banks, if you're trying to track down an old, forgotten savings account.

Hope this helps. Love the site. Keep fightin' the good fight!

Yours,
Anon.

My adjustable rate mortgage with Verity Credit Union is due to reset next month. As part of the note there is an option to convert to a fixed rate. The calculation of this fixed rate is clearly defined as equal to Fannie Mae's required net yield for a 30 year fixed rate covered by an applicable 60-day mandatory delivery commitment plus five-eighths of one percentage point, rounded to the nearest five-eighths of one percentage point. So take the Fannie Mae 30 year 60 day rate add 5/8ths and round to the nearest eighth. The note said the note holder got to decide the day of the rate but Verity was nice enough to let me pick which day I wanted as long as I gave them 15 days notice before the reset date. I patiently watched the rates every day and fortunately right before I was to give them notice rates were steadily declining...

I called to verify everything but was given a conversion rate which was 1/8th higher than I expected. I quickly double checked my math and found no mistake. I started asking questions, like where did they get the Fannie Mae rate which was rounded up to the nearest 1/8th. The lady did not know where the rate came from just that her rate sheet said what it said. I then went above her to a supervisor and posed the question why was the rate being rounded up to the nearest 1/8th when the Fannie Mae rates are not rounded at all. She was puzzled as well and asked for the website that was publishing the daily rates I was seeing and told me she would look into this.

The next day I got a call telling me that they had redone their procedures/policies and from now on would be calculating their conversion rates how I was doing it. Oddly enough I was apparently the first person to ever question or notice this discrepancy. In the end we are only talking about $15 a month difference but the lesson here is to always do your research and only work with quality establishments.

The daily Fannie Mae rate can be found online here.

According to WLKY, this advice could have been of use to an 18-year-old woman who accidentally deposited a bag of meth along with a check in a Washington ATM. A bank employee found the drugs and called the police.

And yes, it was a credit union.

Woman Accused Of Depositing Meth At Bank [WKLY]
(Photo:Todd Kravos)

That's a lady who is finally digging herself out of a payday loan hole with the help of a "non-profit" payday loan. At one point, Truckey was paying $600 a month in finance charges alone. Now she has a new loan through GoodMoney, operated by local credit union. The new loan's APR is only 252%, about half what she was paying before.

That's still a pretty crappy number, and it begs the question, does it really cost that much to lend money? 12 states disagree and have usury laws that prohibit payday lending. There's also an important book would-be payday debtors should read, called, "Don't Buy Stuff You Can't Afford."

Nonprofit Payday Loans? Yes, to Mixed Reviews [NYT]

Alana from the BC credit union quickly responded:

"Thank you very much for bringing this matter to our attention. I can understand your frustration of being misdirected by us. We were unaware of any problems with the ATM mapping feature on our website, and upon receiving your email have been in contact with our technology partners to ensure that all mapping errors are corrected as quickly as possible. The specific information you have provided us with has definitely helped us narrow down where the issue exists, and we truly appreciate the time you have taken to send us this information."

Paula surely didn't expect to receive a call a few days later, this time from a local courier bearing a pie.

Humble Pie [Mommy Musings]

(Photo: Betsssssy)

Boom: well the best thing would have been for my parents to keep the account open
Boom: because the bank would have to make up for the checks being frauds
Benpopken: really? that's interesting and counter-intuitive. In fact, it goes against everything I've ever heard.
Boom: very much so but when explained you can understand how the bank would be hands off when the account is closed
Boom: you lose the help you get from the bank in fraud investigation
Boom: When the account is open the bank would send NSF info to my parents - my parents were able to take that to the court and refute the check was not theirs.
Boom: When the account was closed the bank just refused the info and my parents never got any information to go to the court about the checks
Boom: My parents didn't know what checks had bounced and who those checks were made out to
Benpopken: so how did you guys stop the check writer? police sting?
Benpopken: when did they find out it was your sister?
Boom: they tracked how and when the checks were written
Boom: found one place where she bought some audio stuff for her car and they met her when she came to pick up the car
Benpopken: they being your parents?
Boom: police
Benpopken: ah
Boom: sadly enough the judge was WAY TOO easy on her - she had problems with drugs, and had written hot checks before
Boom: she spent one night in jail and had to take a class about check writing
Benpopken: proly coulda used a good hard lesson
Boom: and I am sure a good amount of community service
Boom: since then my parents are raising her 2 children
Boom: hard - I am one of 5 children and my parents only had 1 bad one :-p
Boom: goes back to nature or nurture questions
Benpopken: so they really had to use lawyers? they couldn't just send a letter that said hey, someone stole our checkbook?
Boom: well they sent the first letters by themselves - It must be because of the large amount lost due to the checks
Boom: they were getting hassled and they didn't want to have credit problems
Benpopken: then the companies said we don't care, we're going to sue you?
Boom: my parents worked harder to cut them off at the pass
Boom: got the lawyer involved to show them they were serious about it before there were even more problems happening
Benpopken: ah i see
Boom: smart idea - better safe then sorry if they actually had to go to court the costs would have been 10x
Benpopken: guess so
Benpopken: unfortunate costs, on many fronts
Benpopken: What bank was this?
Boom: it was a credit union
Benpopken: do you remember which credit union?
Boom: shell federal
Boom: but I would bet national chains would be just a hands off with closed accounts
Boom: I think the best thing is to warn people about the possibility
Boom: closing the account may be the best thing in some situations... but people should think about what they are doing before they just close the account - remember that an open account provides bank protection
Benpopken: right, as long as you realize that until the perp is caught, you just have to weather the storm of bounced checks and whatnot
Benpopken: and a month later, the money will be back
Benpopken: in the meantime, take all money out of the account and open a new one
Benpopken: and put your money there
Boom: yeah, that would be best - leave the account open but move the money out
Boom: have the bank reject all checks
Benpopken: and call the cops

Leaving your account open seems rather odd, but apparently it leaves you less open to liability??

So, by this advice, when your checkbook is stolen:

Report the fraudulent activity to the bank.
Ask the bank to freeze your account. Tell them which checks you still have outstanding, so they know to let those pass
Remove all remaining funds, minus the amount for any outstanding checks, and put them in a new account in a new bank.
File a police report.

If you do all this quickly, everything should clear in your favor, eventually. — BEN POPKEN

•Consider A Credit Union For Financing. "Get a pre-approved loan through a credit union, most of the time they will approve you up to a certain amount and give you a check that can be used at the dealership of your choice, which turns you into a cash buyer, you already know how much your payment will be a month, and it makes it so you have one less thing to negotiate with the dealer about."

• Selling Kias is about volume. "Most salesmen don't make squat selling new cars alone, it is all about volume, at the Kia dealership we made $100 per new car from the dealership with Kia offering an incentive called "Kia Cash" where you would call a number after a car had been registered with corporate as being sold and you could "win" anywhere from $25- $500 for each sale you made. Our dealer would also offer weekly "spiff's" where you would get an extra X dollars for every car sold if the dealer sold Y number of cars, or on a weekend if you sold more than three you would get a compound bonus where ever car would be worth 50 bucks more to you than the last one 1st one 50, second car 100 etc.."

• At Carl's Kia Dealership there was a time limit for each customer. "The way we made money pretty much meant that we weren't going to spend anymore time with a customer than necessary. The manager's had an unofficial time limit, if you were with a customer for more than an hour without closing in on a sale, they would either step in or send in a Closer to make the deal go. If we spent more than two hours with a customer they had better be making a bulk deal because it really wasn't worth the time invested."

• Kia dealerships can be sort of sleazy. "Kia markets their cars as a lower cost alternative to Japanese cars and as a result most dealership's aim their marketing at high credit risk customers, because of this,the dealerships can be pretty sleazy to deal with because they know that most people who look at Kia's have been turned away from every other new car lot in town. If you were to wander in to a Kia dealership I would pretty much expect every high pressure trick in the book to be thrown at you."

• Stay away from big chain dealerships. "I would recommend staying away from chain dealerships, auto malls, and anyplace billing itself as "THE BIGGEST (insert brand here) DEALER IN THE REGION!!!" because they are going to be high volume which means that the sales team doesn't have any particular reason to keep you as a return customer. Employee turnover at chain dealerships can be extremely high, especially for positions like management and finance, which can be the most cut-throat positions in the dealership. Not uncommon to see a new sales manager every week or two at some of these places. Small family owned dealerships that have a good reputation in the community are disappearing but they are the way to go."

•Try A Vehicle Buying Service. "Most credit unions also have a vehicle buying service, where an independent party will find a vehicle of your choice and get you a price that is usually right around invoice. I don't think most people could go to a dealership and get the same results that buying services do, and it can save you a lot of time if you know what you want in a car."

• If you're happy, let the dealer bribe you with free gas. "Customer satisfaction surveys are a joke, at the dealer I worked for we would bribe customers with free gas if they let us fill out their surveys when they come in the mail." Sketchy, but hey. It's free gas.

Thanks for the tips, Carl! According to Consumer Reports, Credit Unions can be a good place to get a low interest rate.:

"Because they are nonprofit, their operating costs are fairly low and their lending rates can be quite competitive. Many people belong to credit unions just to take advantage of the convenient loan policies."

Once they get pre-approval "members can essentially shop as a cash customer and that's what we instruct them to do," says Larry Jones, vice president of marketing at ORNL Federal Credit Union in Tennessee.

"Pre-approval is a way you're sure you're going to get the loan," said Ellis Waller, product manager for automotive lines with the Credit Union National Association.

"You can go into the dealership with money in hand at a rate you know is attractive. When you say you have the financing, the dealer won't try to convince you their 2.9 percent financing is better. It's almost always better to take the rebate and finance with the credit union."

There is a clear advantage for the credit union, too. Fewer members end up with dealer financing.

For more info about financing and credit unions:

Credit unions get up to speed for online car shopping [Bankrate]

Where to shop for an auto loan [Consumer Reports]

If you work in the car sales business and want to offer some helpful tips to our readers, write to us at tips [at] consumerist [dot[ com.

(Photo: Ian Muttoo)

Credit unions rock, but how do you join them?

The law that established credit unions required that they target specific populations — like employees of a certain company, members of associations, or tradespeople. (Thank FDR.) So while a bank will take just about anyone's money, a credit union has to see if you're eligible to join first. If you're not in the targeted group, then your money's no good there.

If you want to see which groups you're eligible to join, visit How to Join a Credit Union. You could be eligible on the basis of your job, your church, your college, your zip code, your religion, or other fun demographic features. There may be multiple credit unions you qualify for, so comparison-shop. — MARK ASHLEY

(Photo: Edu-Tourist)

A restaurant chain with a store in Mesa offers to accept Mexican pesos for pizza and receives threats at its Texas headquarters.The state's largest credit union is bracing for similar fallout as it begins marketing savings accounts to undocumented immigrants.

Officials at Desert Schools Credit Union say the potential reward - thousands of new customers - justifies the risk of angering a few customers. Ignoring the state's fastest-growing population could be the equivalent of corporate suicide, one business expert said.

"Fundamentally, I don't see anything negative that might be associated with what the credit union is trying to do, if people have a broader context about what the alternatives are for this segment of the population."—MEGHANN MARCO

Credit union defends accounts for undocumented [AZ Central]

That is, of course, until a credit union screws you over.

Still, there is much merit to Jim's argument. Have a taste.

Here's the simple reality: Banks have shareholders who want to see a profit on their investment. So banks do everything in their power to get as much money from their customers as is legally possible while still remaining competitive with other banks. Here's a case-in-point: Citizens Bank paid the Phillies $92 for the naming rights to their new stadium. Where did that money come from? Customer fees.

Most people just accept it. After all, what choice do they have?

I'll tell you: Credit unions. The owners of credit unions are the members themselves. So there are no fat-cat shareholders to answer to. As a result, credit union profits are returned to members in the form of fewer fees and better interest rates.

And thanks to relaxed laws regulating who could and couldn't join a credit union, virtually everyone in America can join at least one. I'm a member of three, myself—credit unions have killer car-loan rates to begin with. Being a member of three allows me to easily comparison shop.

Banks don't want you to know about credit unions. They're spending millions to lobby the government to keep them under wraps. And for good reason. If most people knew about the benefits, all the big banks would be out of business.

Some benefits of credit unions?

Checking accounts are usually free with no ridiculous minimum-balance requirements. You're not going to get hit with fees for dipping into your overdraft. You can buy your checks at-cost. And there are no per-check fees or any of that other crap banks like to slip in while you're sleeping.

How about ATM fees? Most credit unions are members of a national network of credit union ATMs, so you get access to literally tens of thousands of machines across the country with zero surcharge. Few, if any, credit unions charge you to use someone else's machine. (Of course, the ATM's bank will probably still hit you with a surcharge, but at least you're not going to have to pay twice).

As for interest rates, credit unions consistently average better car loan rates than the bank, and even rival those offered at most car dealers (who are offering you teaser rates to get you in the door). Your savings, CD, money market, and mortgage rates are all going to kick ass too. When it comes time to finally move out of mom's house and into your own home, you won't have to pay all the shitty, sleazy "service," "commitment," and "underwriter's fees" AKA "junk fees" that banks tack on to their mortgages. Better still, most credit unions won't slam you with a several-thousand-dollar "prepayment penalty" like Bank of America did when I refinanced the mortgage I had with them.

When you look at the reasons most people use a bank (direct deposit, check cashing, bill paying, and ATMs), you're going to save cash. Maybe as much as $100,000 over your life, by some estimates.

I don't work for credit unions, I'm just a big fan. Of course, there are some credit unions that have lost a little focus and pull some of the same stunts as banks, but they are the exception and certainly not a rule.