Credit Unions Don't Want Your Money

Monday, March 08, 2010 , , 1 Comments

 Please take it. No really.

(h/t Dan from

Las Vegas Review-Journal:

Nevada Federal Credit Union has a deal for big savers: Withdraw your money and you'll get a bonus.

The credit union, one of the largest in Nevada, figures that deposits from members who don't have a checking account, mortgage loan or any other products are expensive.

Brad Beal, chief executive officer of Nevada Federal Credit Union, estimates that about 1,600 of Nevada Federal's 85,000 members only use the credit union for savings.

The financial institution typically uses member deposits, including certificates of deposit and money market accounts, to make loans, which typically bear higher rates than deposits.

Beal figures those interest-bearing accounts are a money-losing proposition in Nevada's current depressed economy.

"We don't have any loan demand right now," Beal said.

The credit union is investing in short-term Treasurys and earns about one-quarter of 1 percent on those government securities on average, but it was paying 0.4 percent to customers with savings.

In addition, the credit union expects the National Credit Union Administration to boost deposit insurance premiums by 0.15 percent to 0.4 percent this year.

For each $100 million in deposits, that premium increase will increase Nevada Federal's costs up to $400,000 yearly, Beal said.

American Express tried this awhile back (you have to move quickly in this economy) and it worked out well for them but it might be a bit late now for credit unions to get smart and stop putting their pennies in Treasurys. Hahahahahaha LOL hate to say I told you so (not).

Nevada, of course, has been hard hit by the recession because it's impractical to fund a giant playland in the desert - make that two of them, one which yours truly used to call home - and we all know the Californians don't have the money to make those Reno trips any more. Ooops. Poor planning on your part does not constitute an emergency on mine.

The credit unions are genius. But really, $75 if you withdraw $75,000? Chase gave me $150 just to OPEN an account and only deposit $100! Come on, credit unions, keep up.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


Hi JDA, I have an extensive credit union background. The NCUA got in wayyyy over their head! The corporate credit unions were given free reign investing in MBSs, CDOs. NCUA had not clue what these were, and therfore didn't bother to examine these huge, material assets - until it was too late and crashed the credit union system.

The corporate cu system proceeded to implode from the bad investments and the remainder of the cu community, all the other cu's, had to pick up the tab through additional deposit insurance assessments. NCUA had to bail out the corporate cu's. The gist: if you managed your credit union like you were supposed to and didn't take risk, you had to pay for the corporate cu "leaders" ineptness and lack of common business sense. The campers are not happy! lol