Category Archives: News

Credit Unions’ History Shows Resilience of Cooperative Banking Model

CUNA_ICU_Logo_Final_WCIn honor of International Credit Union Day, NerdWallet Looks Back at the History of Credit Unions in the U.S.

Credit unions surpassed the 100 million-member mark in June, reaffirming the strength of the federally insured system throughout the years—from the Great Depression to the Great Recession and its aftermath.

Credit unions are gaining popularity among consumers who want financial benefits, fewer fees, lower loan rates and higher interest on savings accounts. In the past year alone, credit unions added 2.85 million members. This growth was the largest reported 12-month increase in more than 25 years, according to Credit Union National Association (CUNA). From the start, these not-for-profit financial co-operatives have greatly benefitted their members.

Rise of credit unions

The first U.S. credit union opened in 1909 in Manchester, New Hampshire, according to the National Credit Union Administration (NCUA), which regulates, charters and supervises federal credit unions. However, it was not until the Great Depression that these financial institutions were organized under federal law.

President Franklin D. Roosevelt signed the 1934 Federal Credit Union Act at a time when Americans had very little faith in banking institutions. The law was intended to make credit available to people at all economic levels and to promote thrift. By the end of 1940, there were 3,756 federal credit unions in the U.S.

 

Mid- to late-20th-century changes

By 1970, Congress had created the NCUA as well as the National Credit Union Share Insurance Fund to back share accounts in all federal credit unions, as well as most that hold only state charters. At first, credit union membership was open only to a well-defined community, such as residents of a specific town or county, or the employees of a particular company.

In the 1980s, membership criteria were loosened, allowing more flexibility in who could join. By then, the services credit unions could offer had been expanded to include share certificates and home mortgages. In 1985, credit unions insured by the fund received the backing of the “full faith and credit” of the U.S. government.

Banks, which compete with credit unions, challenged looser membership rules, and in 1996 and 1997, the federal courts backed those challenges. But in 1998, President Bill Clinton signed the Credit Union Membership Access Act to restore membership flexibility.

The Great Recession

During the financial crisis that spawned the most recent recession, Congress took a number of steps to help banks and credit unions handle fiscal stress. One, a temporary increase in share insurance protection to $250,000 from $100,000, matching the Federal Deposit Insurance Corp.’s backing of bank deposits, was made permanent in 2010.

Today, about a third of all Americans belong to credit unions, which hold $1.1 trillion in assets, according to NCUA figures.

How do credit unions offer better deals?

Unlike for-profit banks, credit unions are member-owned organizations operated democratically and overseen by volunteer directors. They are exempt from federal and most state taxes, a status that has drawn challenges from bank groups, who say it provides an unfair competitive advantage. Credit unions say their status is appropriate because they exist to serve members, not make a profit.

“Credit union products and services saved consumers $8.5 billion in 2013,” said Pat Keefe, CUNA’s top spokesman, in an August 2014 statement. “That benefit goes both directly to credit union members, because members—not stockholders—are owners, and to the American consumer overall because credit unions’ better pricing puts competitive heat on banks.”

Credit unions return earnings to members in the form of lower loan rates and high interest on deposits. For example, the national average credit union rate for a 36-month used car loan was about 2.7% in the second quarter compared with the almost 5.3% average bank rate. Meanwhile, a five-year share certificate with a $10,000 minimum carried an annual yield of more than 1.3% compared with the less than 1.2% average bank yield.

Depending on the individual credit union, other financial benefits may include truly free checking accounts for students, seniors and businesses; a larger network of surcharge-free automated teller machines; mobile banking apps; and interest on savings that beats that of most banks. Because credit unions are managed for the benefit of their members, they’re often able to provide more personalized service than banks can.

Credit unions have a long history of providing Americans with a stable source of loans and a secure place for savings. These institutions have proven their ability to weather even the bleakest economic climates, so there are plenty of good reasons to join one. After all, can 100 million people be wrong?

Anna Helhoski, NerdWallet

BrightStar Credit Union raises $21K to help SuperStorm Sandy victims

Red-Cross-Check-Final Based in Sunrise, and one of the largest credit unions in south Florida with 50,000 members, BrightStar raised a total of $21,133 for the American Red Cross to assist in the Hurricane Sandy Relief effort. BrightStar collected a total of $11,133 from members and employees through their six locations in Broward County. BrightStar then matched that amount up to $10,000 for a grand total of $21,133. A financial gift to the American Red Cross Disaster Relief Fund enables the Red Cross to provide shelter, food, counseling and other assistance to those in need.

Toy Drive! We’re Collecting Toys at Our Branch Locations.

Help Spread a Little Holiday Cheer! BrightStar Credit Union is holding our Annual Holiday Toy Drive. The toy drive is a great way for members and BrightStar employees to help make a difference. We have partnered with Family Central Inc. on this project.

We’ve placed a Toy Drive drop box in each BrightStar location for you to make toy donations. NEW unwrapped toys are needed for ages infancy to 17 years. Please click here to view a list of suggested items. The deadline to drop off toys at BrightStar is Monday, December 10, 2012. Gift cards and movie passes are also welcome.

Help spread the word about the Toy Drive so we can collect as many toys as possible for needy kids. Even small donations can go a long way.  We are still collecting donations for the victims of hurricane Sandy. Have a wonderful Holiday Season, and thank you for your support.

BrightStar University Recognized by NerdWallet.com

BrightStar University

BrightStar Credit Union’s financial literacy website, BrightStar University, was recently named a top pick for “Best Multimedia Collection” by NerdWallet.com.

BrightStar University offers a variety of free resources, lessons, curricula, games, podcasts and more—all designed to help improve your financial knowledge.  The site is divided into age groups with handy tools for kids, middle schools students, high school students, college students, adults, parents and teachers, and  also information in Spanish.

“Credit unions are great for free checking and loans, of course, but many people don’t realize that they’re also an excellent resource for financial literacy,” says Laura Edgar, NerdWallet’s credit union specialist. “We really liked BrightStar University because it has a large collection of articles, games and videos for all age groups. It’s also very easy to access. All you have to do is go online.”

We’re honored to be featured on the NerdWallet blog. Be sure to visit BrightStar University the next time you need to brush up on your money smarts.

NerdWallet.com, a personal finance website committed to promoting financial literacy and spreading the word about consumer-friendly banking.

BrightStar Wins South Florida’s Credit Union of the Year

student-with-star

A visitor at BrightStar's recent 65th Anniversary Party in the Park holds a star.

BrightStar Credit Union was named 2011 Credit Union of the Year today by the South Florida Business Journal as part of their Excellence in Banking Awards.

The Credit Union was selected for its involvement in the community, and because they have contributed to the local economy by granting thousands of consumer loans and hiring staff (rather than laying off staff like some organizations have had to do). Another factor in the award was the Credit Union’s growth in loans and members, which are some of the best growth rates in the U.S.

BrightStar’s CEO, Ralph Crockett said about the win, “This is a great honor for all of us. The congratulations goes to all of our staff who work hard every day to wow members with great service. This is also a win for our members, since they are the owners of the Credit Union. I think there’s a sense of pride being part of a credit union which has been called the best.”

BrightStar made $68 million in loans to members for the period from June 1, 2009 to June 30, 2011 and also expanded its number of staff by 5%. Both of these are significant factors which have contributed positively to the local economy.  The Credit Union is well-managed, well-capitalized and has never needed one penny of taxpayer bailout money.

BrightStar, which also won the 2010 AFP Philanthropic Company of the Year for Broward County, is a huge contributor to education. The Credit Union contributes more than 5% of its net income to Broward County Public Schools. Some of the programs include sponsoring Colonial Williamsburg Electronic Field Trips for 40 schools, financial literacy presentations to thousands of students, internships and several in-school, student-run credit unions. BrightStar also supports the Historic Sistrunk Festival, the Young at Art Children’s Museum and recently launched its financial literacy website, BrightStar University (www.BrightStarU.com).

BrightStar has more than 46,000 members, $340 million in assets and is insured by the NCUA, an agency of the federal government.  Learn more at http://www.bscu.org.

BrightStar is also happy to congratulate the award finalist, Dade County Federal Credit Union — another fine south Florida credit union.

Learn more about BrightStar Credit Union and join here:  https://www.bscu.org/owners/

Free online “university” teaches about personal finance

We were featured in the Sun Sentinel. Read all about BrightStar University

Free online “university” teaches about personal finance.

SECURITY ALERT: Text Message Scam

Recently, some residents in south Florida have received calls and text messages asking for their debit or credit card numbers.  The message usually asks the recipient to call a phone number to “activate” or “verify” their debit or credit card.  Some of these messages have mentioned the names of credit unions, including BrightStar.

 BrightStar did not send these messages. The messages are an attempt at fraud called “phishing,” which means someone tried to trick people into providing their account information. Some of BrightStar’s members received these messages (as well as non-members.)

 No BrightStar data has been compromised. Member account information is safe and secure. The only connection to the Credit Union is that some of the messages mention our name.

 If you receive a message like this, ignore it. Do not call the phone number in the message nor reply to the message in any way. Never provide your account information to someone unless you know who it is. BrightStar will NEVER send you a text message or email asking you to verify your account information.

 If you mistakenly provide your account information to a suspected fraudster, or if you suspect fraudulent activity on your account, please contact the Credit Union at 954-486-2728.

 Protect yourself.  Don’t get caught phishing.

Mobile Banking

You can now access your BrightStar account on your mobile phone. Just go to m.bscu.org. Also, smart phones apps are coming soon.