The first strike came last year, when U.S. Bank denied her husband a small-business loan.



Later, she realized the bank's "savings" account paid a paltry interest rate.



This month, when Sarah Vainer applied for a preapproved auto loan, U.S. Bank demanded a mortgage-like mound of paperwork, including copies of her current auto lease and past lease payments, and asked what type of car she'd buy.



"What's the purpose of a preapproval?" Vainer recalls thinking at the time. "This is completely insane."



She left and this week joined USAgencies Credit Union in Portland. An overreaction? Not when you consider the credit union has already preapproved Vainer for a loan. Or that the Vainers have great credit, which Sarah feels obligated to have, given her job: tax collector for the Internal Revenue Service.



Or that she once worked for U.S. Bank, where she helped manage a branch and took car-loan applications.



"It made me feel like some kind of delinquent," she says of the bank's inquiries.

It's only plastic

The new federal credit cardholder rights act takes effect today, and some cardholders are piping mad about the changes their cards have made.

One Chase customer in Hawaii received a statement with the newly required payoff disclosures, only to discover the disclosure was in error.

Share your stories on how your relationship with your card has changed. Plus, read

explaining the changes.

She's hardly alone in her march to a credit union.

Deposits at the nation's 7,800 nonprofit financial co-operatives are up 8 percent nationwide through the 12 months ending in September. They're up 11 percent at Oregon's 83 credit unions. By comparison, bank deposits are up 4 percent nationally and 9 percent in Oregon.

It's all part of the backlash against big banks -- their taxpayer bailouts, high fees and reluctance (or inability) to lend money. Witness the online "Move Your Money" drive, which encourages consumers to leave "casino-style Too Big To Fail banks and give their money to community banks and credit unions."

In its defense, U.S. Bank made regional president Malia Wasson available. She declined to comment on Vainer's claims, citing privacy protections, but said the bank boosted small-business lending around Portland by $45 million, or 10 percent, over 2008. Consumer loans also were up, she said.

"That's hopefully proof that we're trying to find ways to make loans," Wasson said.

Many Americans don't understand credit unions or know who can join them, according to a

, a research organization. Many think credit unions are less convenient than banks with their many branches and ATMs.

"As we joke around here, despite all the consumer griping, it often takes dynamite to get someone to switch to a new bank," says Mark Schwanhausser, research analyst for Javelin Strategy & Research.

Which do you prefer?

A credit union or a bank? Vote in

!

Credit unions, with less than $750 billion of U.S. deposits, have a long way to go to surpass the $9 trillion squirreled away in banks.

I'm a credit union member. I like owning a portion of the institution where I keep my money. That way, I can collect a share of earnings in the form of higher savings rates and cheaper loans.

Bankers say the federal income tax break that credit unions get -- a more than 30 percent savings on earnings -- is unfair. But they pay other taxes that banks pay. Credit unions also are more constrained in how they can grow: They can't issue stock or bonds to expand; they must grow on earnings they keep.

There are different regulatory burdens, too. A credit union in Portland can't just open a branch in Grants Pass. It must have a "field of membership" approved by regulators, though the field can be an employer, a church, a school or a geographical area.

Even if the masses are moved to buck their bank, credit unions wouldn't be able to handle a surge, said Keldon Bauer, an assistant finance professor at Illinois State University. With other economic burdens taxing credit unions right now, Bauer says, "they may not be super-competitive right now."

That said, if you haven't considered a credit union, you're missing out on better rates for savings and loans in an arguably safer savings system. You might also get better customer service. You'll probably sacrifice some convenience, but perhaps less than you think.

Here's what to think about:

Pros





They're lending:

Nationally, lending to consumers declined 7.3 percent last year, Federal Reserve data show. But credit unions reported a slight increase in "consumer installment credit," which includes auto, credit card and other smaller loans.

Their rates are better:

Credit unions, on average, beat banks in what they pay on savings, money market and long-term share deposits. Vainer's new "Save 4 It" account at USAgencies pays 1.51 percent annual interest on as much as $5,000.

Last week, classic credit cards issued through Oregon credit unions, on average, charged 11.2 percent interest, according to Datatrac, a market research firm. Bank-issued cards charged 17.2 percent

Although their rates on home mortgages usually aren't better, they charge you about 1 percentage point less interest on auto loans. A $25,000 car loan at a credit union in Oregon would have saved you more than $1,000 over the five-year life of the loan, according to Mike Schrenk, senior economist from the Credit Union National Association, a trade group.

They're easier to join:

Deregulation allowed many credit unions to expand their field of service by geography, making them available to just about every Oregonian. USAgencies, for example, serves government employees and family members living within 25 miles of its branch.

.

They're getting more convenient:

Many credit unions share branches nationwide through the Credit Union Service Network. This allows their members to make withdrawals, deposits and other transactions at 6,300 sites across the nation (including 77 in Oregon). "You wouldn't see your bank referring you to their competitor down the street," says Laura Wieking, spokesperson for the Credit Union Association of Oregon.

They've also formed the Co-Op Financial Services network, giving members surcharge-free access to 28,000 ATMs in the U.S. and Canada. Many of them are inside 7-Eleven stores, and many of those take deposits.

You can search for shared branches and 7-Eleven ATMs by

.You can also use the

. An iPhone app developed for FirstMark Credit Union in San Antonio works just fine finding free ATMs near here, and CU Service Centers offers a

to help find shared branches.

They're insured:

The National Credit Union Share Insurance Fund backs deposits up to $250,000 at 7,800 credit unions, much like the Federal Deposit Insurance Corp.'s Bank Insurance Fund does with bank deposits. Over time, credit unions have had lower failure rates than comparably sized banks, costing their insurance fund less, according to 2004 research by the Federal Reserve Bank.

Cons





They're still less convenient:

Many small credit unions still have one branch. Their online access has improved, but they lag big banks, and their integration with online budgeting sites like

or

might be limited. The less-slick appearance of

and the convenience of having all her accounts on one online site at

kept Vainer from bolting from the bank before now, she says.

Some are acting more like banks:

OnPoint Community Credit Union of Portland and First Technology Credit Union of Beaverton each boast more than $2 billion in assets and hold more deposits than any Oregon-based bank, except Umpqua Bank.

Many credit unions charge overdraft fees, though not as much and not as Draconian as some banks, and have curtailed some services. Free traveler's checks, for instance, disappeared at my credit union.

A few are on shaky ground:

Though not engaged in exotic mortgage lending and derivative trading, credit unions are vulnerable to the finances of their members. Four state-chartered credit unions in Washington are undercapitalized, said Linda Jeckel, who oversees credit unions for Washington's Department of Financial Institutions. She declined to identify them to avoid "a credit-union run."

Oregon credit unions are "in relatively good shape," though a handful are losing money, says David Tatman, administrator of the Oregon Division of Finance and Corporate Securities, which oversees 20 of 82 credit unions in the state.

If you're concerned, look up your credit union's latest financial statement at the

. You can also generally rely on ratings given by

or

. I also hope to list the most troubled credit unions in either state on my blog.

The insurance fund has its challenges:

Fewer than two dozen credit unions failed last year. But fund managers seized two major corporate credit unions that got in trouble investing in mortgage-backed securities and took out a $40 billion line of credit from the U.S. Treasury to deal with the problems.

These corporate credit unions don't take member shares, but they provide financing for regular credit unions. Local credit unions not only wrote down investments in corporate credit unions, but they also ponied up $1 billion in new premiums to shore up the insurance fund, and will probably have to pay more. I wouldn't be too worried about the fund now, but keep an eye out for any news or status reports on it.

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