25 posts categorized "Credit Unions" Feed

A Primer: Finding A Credit Union To Move Your Money To

Many consumers feel "mugged" by the big banks and their many banking fees, and are moving their money to a community bank or credit union. If you are looking for a credit union, there are a few things you should know. I am looking for a new bank or credit union, given the new debit card fees and poor treatment.

To learn about credit unions, first I visited the National Credit Union Administration (NCUA) website. The NCUA is the independent federal agency that regulates and supervises federal credit unions. The NCUA operates the National Credit Union Share Insurance Fund (NCUSIF), which insures deposits at federal credit unions and most state-chartered credit unions. Deposits are insured up to $250,000 per account.

The NCUA website explains what a credit union is and how they operate. Some consumers like credit unions because they believe all banks will ultimately add fees for checking accounts. Besides offering low and no fees compared to the big banks, the attraction of a credit union is:

"... cooperative financial institution that’s owned and controlled by the members. Since they’re not-for-profit, they exist to serve you, the member. Not for profit, not for charity, but for service is a credit union motto. As a member, you have a say in how the credit union is run..."

I like the idea of having a say, since that is not happening at the big bank where my accounts currently are. At the NCUA website, I used the find a credit union to develop a short list of three or four credit unions located near where I live. The tool delivers summary information about each credit union: name, address, phone, CEO name, credit union type, number of members, charter number, status, and other pertinent data. I found this information useful with creating my custom list of prospective credit unions to apply to.

To join a credit union, you have to apply. Some have specific membership criteria; others do not. You will probably want to find credit unions located near you, since their network of ATM machines is not a broad as the big banks. To me, that is a small consequence to avoid the numerous fees charged by the big banks.

To learn more, you can also follow the NCUA on Facebook. Or you can also visit the National Association of Federal Credit Unions (NAFCU) website. While the NCUA website focuses on the needs of consumers, the NAFCU website provides information for both its members and for consumers. You can also follow the NAFCU on Facebook.

The NAFCU also provides a credit union locator tool to find a credit union, and a compare rates tool, to compare the interest rates by type (e.g., savings, mortgages, consumer loans, and credit cards) at credit unions. I found the compare rates tool not very useful, since it only lets you compare all interest rates in a state by type, or rates by type nationally. The compare rates tool doesn't let you compare rates by type within a state.

To be fair, while I like a lot of the information about banks in articles at Bankrate.com, its compare rates tool includes interest rates for a variety of financial products (e.g., checking, savings, CDs, credit cards, mortgages, auto, student loans) at banks, but lacks relevant checking and savings fees. In 2009, this blog first covered the Move Your Money Project (MYMP) website. At that time, the search tool only included community banks. The search tool was upgraded last year and includes both community banks and credit unions.

The Find a Better Bank (FBB) website lets consumers search across both banks and credit unions. I found many of the questions in the FBB search tool intrusive on privacy, and just wanted the site to simply display a list of nearby banks with their key check/savings interest rates and relevant fees.

What search tool have you used to find a credit union or a community bank to move your money to? If you have used any of the above search tools, please share your experiences: good or bad.

[November 1, 2011 Update: In a Facebook message, the NCUA announced today, "We have launched the completely restructured and redesigned www.ncua.gov and rolled out phase II of our consumer-focused website www.MyCreditUnion.gov. The site www.ncua.gov is now exclusively tailored toward the business aspect of the agency, whereas consumer content moved to www.MyCreditUnion.gov with an identity aimed at attracting web-surfing consumers who either want to learn about credit unions or need help with their credit union. The new site incorporates the latest functionality in web technologies and features."]

Statistics: Consumers Moving Money To Smaller Banks And Credit Unions

I shared in a prior post a video from the Move Your Money site. If you haven't heard, there is a movement underway by consumers to move their hard-earned money from big banks to small community banks and credit unions. Some of the reasons why people move their money:

  • Poor customer service
  • Dislike the bank's policies
  • Dislike the bailouts the big banks received
  • Dislike the bank's mortgage lending practices
  • High credit card interest rates and unfriendly terms for cardholders
  • Large bonuses paid to the bank's executives
  • Money spent on corporate acquisitions instead of services for consumers

Some recent statistics from Forbes magazine:

"Our survey about banking of 2,068 U.S. adults was conducted from Feb. 17-19, 2010. We found that 37% said that a big national bank was their primary source for banking. We asked all respondents if they have “considered moving some or all of (their) banking from a large national bank to a community bank or credit union because (they) are unhappy with the policies or behavior of large national banks.” Nearly one in three (32%) answered yes."

The main statistics to remember (bold text added):

"Fourteen percent of all adults said that in the past year they have actually moved some of their banking from a large national bank to a community bank or credit union. We asked them why they moved their banking and listed several possible reasons. They could choose more than one reason. Based on that question, we found that 9% of all U.S. adults have taken some of their business away from big banks as a protest."

Data Breach Affects 5,000 Liberty Bay Credit Union Customers

Last week, my wife received a letter from the credit union where she banks:

April 16, 2009

Dear Member,

Re: Liberty Bay Debit Card

Although this is a general advisory for your information only, the Credit Union recommends that you cancel your existing card and have a new card issued.

MasterCard has recently informed the Liberty Bay Credit Union that your Liberty bay Debit card has been suspected of being compromised and or exposed. MasterCard is in the process of investigating this unauthorized access of your card information. To date, no fraud on these accounts has been reported at the Liberty bay Credit Union.

Please contact the member Services Dept. at 617-XXX-XXXX [phone number redacted], if you would like us to issue you a new Liberty Bay Debit card with a new number and pin. Once you have requested a new card your compromised card will automatically be cancelled in 30 days.

We apologize for any inconveniences this may have caused you. If you have any further questions regarding this matter please do not hesitate to call the Member Services Department.

Member Services Department
Liberty Bay Credit Union

So far, my wife hasn't received any notices from MasterCard. She checks her bank statements online, so she is sure that there hasn't been any fraudulent charges submitted -- so far.

My wife called Liberty Bay Credit Union (LBCU) to learn more about the data breach and what LBCU is doing to help. An LBCU representative said that MasterCard did not release any details about the breach, and that all of LBCU's 5,000 members were affected.

This is troubling for several reasons:

  • Members deserve better notification about the breach details. The letter did not list the types of sensitive personal data stolen. I didn't seen any news releases about the breach at LBCU's Web site.
  • The letter contains the typical, unhelpful language, "To date, no fraud on these accounts has been reported..." In my experience, it takes fast notification of consumers who are often best positioned to notify the bank (or credit union) of which charges are bogus.
  • LBCU's notification should be stronger than an "advisory." It doesn't offer any credit monitoring services. It doesn't indicate what the credit union is doing to help -- like pressure MasterCard for breach details. It doesn't mention who is paying the cost of new accounts for LBCU members. (Hopefully, MasterCard or the company that suffered the breach is paying the cost, and not LBCU.)
  • If members request a new debit card account, the old account should be canceled immediately. It should not take as long as 30 days. That delay seems unacceptably slow and prone to fraud.
  • The lack of details about the breach incident causes me to wonder if this breach is part of the larger Heartland Payment Systems breach
  • The tone of the letter gave me the impression that LBCU is being totally reactionary and is letting MasterCard perform all of the investigative work.

My wife is understandably angry. Again, a company (e.g., MasterCard, one of its payment processors, or a vendor) has been unable to adequately protect consumers' sensitive personal data, and this has inconvenienced consumers. And, this was not the first breach notice my wife has received from a financial institution. It makes her question whether our financial industry really knows what it is doing about data security.

I question the speed of LBCU's notification. Consider this January 23, 2009 news story from USA Today:

"Visa and MasterCard have begun notifying member banks around the nation to contact patrons whose card accounts may have been compromised in the Heartland Payment Systems data breach. Robert Baldwin, Heartland's President and CFO, said in a USA TODAY interview that Visa and MasterCard are "instructing many card issuers" to offer fraud-monitoring protection, replace cards, or do a combination of both for customers whose card purchases were processed by Heartland."

Consequences of the Heartland Data Breach (Part Two)

In Part One of this story, we met Janet after fraudsters had attempted to submit charges to her Visa credit card. Janet's story continues with some unexpected twists, which we all can learn from.

After Visa -- and not her credit union -- had notified Janet of some fraudulent charges, Janet followed my advice and notified Visa in writing (e.g., a letter via Postal Mail with a Return Receipt) that the charges were indeed bogus. Visa removed the bogus charges.

Janet was curious why her credit union had not notified her about the fraudulent credit card charges, since the credit union issued her Visa credit card. Her credit union indicated that her situation was not a result of the Heartland Payment Systems data breach, since her credit card number wasn't on the list of compromised card numbers the credit union received.

This seemed odd to me since Visa's arrangement with Heartland is well documented in the news media. Thinking that here situation was resolved, Janet was surprised to receive via postal mail a letter from Experian notifying her of an attempted address-change request. Somebody was attempting to change Janet's address on her Experian credit report. This was a troubling surprise for several reasons:

  • Janet had not submitted an address to change to Experian or to any other credit reporting agencies
  • Janet has a Security Freeze on her credit reports at the three major credit reporting agencies (e.g., Equifax, Experian, and TransUnion) to prevent unauthorized access. An attempted address change by a fraudster is clearly an unauthorized access.
  • In its letter, Experian also said that it had sent a notice of this attempted address change to both the new address and to Janet's current address

Janet is puzzled why Experian would send a letter to the new address when she alread has in place a Security Freeze prventing access to her Experian credit report. Next, Janet did what anyone would do: she called Experian's customer service number to talk with a representative. Janet did not want to just send a letter to Experian. She wanted faster action, since identity thieves were trying to access her sensitive personal data.

Sadly, Janet has been unable to talk with a human representative at Experian. When calling the Customer Serivce number, she gets stuck in an endless series of menus to phone messages, with no way to talk to a human customer service representative. Same results with Experian's web site.

Janet followed my advice and filed a police report with local law enforcement. After filing the report, the detective involved has also been unable to contact a human representative at Experian.

Janet asked me what she should do next, since she is leaving for vacation for 10 days. I said that while she is on vacation, I will try to contact the President or CEO of Experian to see what type of response I could get for her. Janet is also contacting her local Congressional Representative.

Janet should be able to talk with a human representative from Experian, especially during a time when identity thieves are attempting to access her Experian credit reports. Janet's experience so far seems to indicate a customer service melt-down at Experian.

This story is far from over. If you want to learn what happens, sign up for either e-mail or RSS updates from I've Been Mugged. As I learn more, I will post it in this blog.

Consequences of the Heartland Data Breach

About a week ago, my friend Janet (not her real name) received a phone call from Visa about suspect charges on Janet's Visa credit card through her credit union. Janet asked me not to disclose the name of her credit union, but it is a well-known higher education credit union located in the Northeast.

Janet asked me what she should do next. Her story has implications for many consumers.

Visa was proactive with contacting Janet about several small charges. Visa wanted to know if the charges were valid. Together, the five charges were less than $50 total, but Visa explained to Janet that often identity thieves and fraudsters submit small charges first. The identity thieves hope that the charges go paid and unnoticed, since many consumers don't check their monthly credit card statement. The real damage is done later when large, fraudulent charges are submitted.

Janet informed Visa that the charge were indeed bogus. Visa closed her credit card account and opened a replacement account. Visa also said that they were going to send Janet an affidavit to sign, indicating that the charges were were indeed fraudulent, which Janet must sign and return to Visa.

My advice to Janet:

  1. Keep breathing. Yes, identity theft is scary but her situation is manageable. It definitely seemed that fraudster had obtained her credit card number, if not more sensitive personal data.
  2. Definitely sign the form and return it to Visa via Certified postal snail-mail with a return receipt requested. That way she'd have a written record of when Visa received her signed form.
  3. Keep a copy of the signed form for her records.
  4. File a police report with her local police department, and attach a copy of the affidavit if needed.
  5. Definitely accept the new credit card account Visa had arranged
  6. Check her credit reports for any bogus entries. (Janet had already placed a Security Freeze on her credit reports years previously, when this became available in Massachusetts.)
  7. Inform her credit card issuers of her upcoming travel abroad, so they know that credit card purchases in certain countries within certain dates will be valid charges; and do not suspend or close her credit card accounts
  8. File a complaint with the U.S. Federal Trade Commission, since the FTC tracks fraud and relies upon consumers to notify it
  9. Check her monthly credit card statement closely for bogus charges. Janet said that she already did this regularly and would continue doing so.

Then, I asked Janet if her credit union or Visa had mentioned the Heartland Payment Systems vendor. Like most consumers, Janet hadn't heard of Heartland since Heartland isn't a vendor consumers usually do business with. Janet, like most consumers, is familiar with the credit card companies and banks.

I briefly explained to Janet the Heartland data breach, how hundreds of thousands of credit card numbers were exposed/stolen, and how Heartland isn't sure exactly how many credit/debit card accounts were exposed/stolen. A January 2009 Washington Post story mentioned that the Heartland breach may be the largest breach ever for the number of accounts stolen. Janet said that she'd ask Visa about it the next time she talked with them on the phone.

A few days later, Janet informed me that Visa confirmed that they use Heartland to process credit card transactions, and that this was probably a result of the Heartland breach. Janet's story has several implications for consumers:

What bothers me about Janet's story is:

  • As of April 12, the Heartland breach site still does not disclose the number of consumers' credit/debit card accounts affected by its data breach. Either the company knows and refuses to say, or they don't know the number affected. If Heartland knows, then the number must be huge -- bigger than the TJX debacle
  • Consumers like Janet are not being informed that their credit/debit accounts may have been affected (e.g., stolen) during the Heartland data breach. This seems to contradiction states' laws requiring consumer notification
  • At its breach web site, Heartland encourages companies not to take any action about the Heartland breach since things will be fixed soon. Huh? Consumers have been affected. This "take no action" advice seems to also apply to communications to consumers. After all of the problems in the financial and banking industry during the past year, I would have thought that Heartland would understand the benefits of transparency about communications. Keeping secrets does damage, and consumers' trust is damaged or broken by secrets
  • Janet's credit union doesn't seem to have provided much help, so far

To be fair, this week Janet plans to contact her credit union for more information and to see what they are doing about the fraud. Maybe Janet's credit union is following Heartland's advice.

If you have experienced fraud recently on your credit card or debit card account, I hope that you'll follow Janet's lead to protect yourself and your sensitive personal data. If you want to share your story below, it would be appreciated.