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Asset Preservation Advisors


State: GA

APA’s philosophy is to work closely with our clients to develop an in-depth understanding of their unique needs and objectives. We then customize a municipal bond portfolio that best meets their specific goals and needs. APA manages high quality municipal bond portfolios in four strategies: Short-Term, Intermediate-Term, High Income, and Taxable.

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Membership Grows at Credit Unions

High fees and tight lending prompt clients to seek out local banks and credit unions

Fee hikes and a tarnished public image are prompting customers to switch from big national banks to local lenders and credit unions, according to some industry experts.

Lenders are raising fees ahead of stricter regulations set out in the Dodd-Frank Wall Street Reform and Consumer Protection Act. Most rules have yet to be implemented, but the banking industry says proposed fee limits could cost them some $16 billion in lost revenue each year. The fee hikes have further tarnished the banking industry image, already damaged by a federal bailout.

Credit unions outnumber commercial banks 8,000 to 6,800, but account for 5 percent of the industry’s $700 billion in annual revenue, according to First Research, which describes the banking industry as high consolidated among 50 of the largest firms. Major players include Bank of America, Citibank, JP Morgan Chase, Wells Fargo and Navy Federal Credit Union.

Deposits at credit unions may be relatively small, but they have been steadily growing along with the number of members. Credit union membership has grown by more than 1 percent per year since 2007 and stood at more than 92 million by September 2010 when assets totaled more than $920 million, reports, an online credit union data analytics system.

Credit unions are not-for-profit cooperatives that enroll members from a “defined field,” such as a common employer, school or church. The institutions exist to benefit their members and do not issue stock or pay dividends to outside stockholders, according to the Credit Union National Association or CUNA. “Instead, earnings are returned to our members in the form of lower loan rates, higher interest on deposits, and lower fees,” CUNA said.

Credit unions are also exempt from taxes on payroll, sales, property and income. They function as an “economic democracy” with each member receiving equal ownership and one vote regardless of the size of their account, said CUNA. Credit unions are governed by a volunteer board elected directly by members. 

A comparison by Informa Research Services, shows that on average credit unions currently offer marginally higher interest rates on 12-month certificates of deposits, savings accounts with a $1,000 minimum and personal checking accounts with a $2,500 minimum.  The average rate for a 12-month CD is now .74 percent at credit unions, compared to .58 percent at commercial banks.

Overdraft fees are on average $2.82 lower at credit unions and interest charged on a variety of loans is lower. On average, credit unions charged an interest rate of 1.56 percent less on used car loans of four years or less, and 1.46 percent less for five-year new car loans. Home equity credit lines and home equity loans charged on average .53 percent and .44 percent, respectively, less in interest.

On average credit unions charge lower interest, annual fees and late fees for credit cards. Average annual fees for cards linked to rewards programs were $68.54 less at credit unions compared to banks.

More than 76 percent of credit unions offer free checking accounts with no strings attached, according the 2011 Credit Union Check Study. In contrast, 65 percent of commercial banks offered free checking with no strings attached. An additional 20 percent of credit unions will waive checking fees when clients agree to direct deposit and/or e-statements.

A little more than a year ago Zogby Interactive predicted public unhappiness with the policies and behaviors of large national banks had the potential to shift business to local banks and credit unions. Nearly one-third of adults surveyed in February 2010 said they had considered moving to a local bank or credit union because of dissatisfaction with large banks. Fourteen percent of those surveyed said they had already made the move. Of this group, 60 percent said they moved in protest against large national banks.