Category Archives: The CU Difference

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

The Charms of Charity

BrightStar Credit Union is happy to help the community with a brand new contest

 photo shutterstock_169952327_zpsb95114b9.jpgWho doesn’t love a good charity? Whether it’s making a child’s wish come true or helping someone who lives in poverty, charities have a way of making the world a better place. You may be someone that donates on a weekly basis or maybe you have always thought about donating but it always slips your mind. Whatever the case may be, donations to any organization have benefits that are not only physical, but emotional as well.

Most of us can agree that donating money, time or property would make even the scroogiest person feel good. But there are more benefits than just making yourself feel better.

1.Show your appreciation

Maybe you went through some hard times and there was a food bank that was always there when you needed help. Donating time, money or food is an excellent way to show your gratitude toward them. Another way to show your appreciation is to make a donation under the name of a lost loved one. It’s a great way to honor them and their beliefs. Just choose an organization that meant a lot to them and give what you can. Any donation will show your appreciation and give back to the community.

2. Stay informed about social injustices

A social injustice is something that is happening in society that is unfair. For example, maybe you heard of the KONY 2012 campaign sponsored by Invisible Children. It is a viral video that taught the world about Joseph Kony, a war criminal that kidnaps children in Africa to make them apart of the Lord’s Resistance Army (LRA). The children are often forced to kill their family with “blunt tools” and girls are abducted to become sex slaves. It’s a very horrific topic but still something the world should know about. Well, that campaign raised more than $15,000,000 back in 2012 and is still fundraising today. By donating to Invisible Children or any other organization, you can stay up-to-date with social issues that are important to you.

3. Simple as Paying It Forward

Imagine you’re in line at the Dunkin Donuts drive-thru, waiting to pay for your medium coffee and an egg and cheese bagel. When you pull up to the window (with your BrightStar Credit Union debit card of course) the worker tells you your breakfast has been paid for. It turns out the person in the car in front of you paid for your meal. This is known as Pay It Forward. If someone did a random act of kindness for you, all you have to do is Pay It Forward by doing an act of kindness for a stranger. This could be anything from complimenting a stranger to packing a lunch for a homeless person. It doesn’t have to be anything big, just something that will make your community a better place.

4. Tax-deductible donations

A tax-deductible donation is simply an item or expense you donated to a qualified tax-exempt organization. You then subtract your donation from your Adjusted Gross Income (AGI) to lower the amount of taxes you pay. These donations will actually help you because tax laws let you claim a deduction for most of the cash or items you donate as long as the value is more than $250.

5. Clean the clutter

Do you have a garage that is filled with old furniture, like couches, TV’s and dining room tables? Spring cleaning may have already passed but you can get rid of the furniture and donate it to organizations like Goodwill. It offers limited at-home pickup in certain areas for large, gently-used items.

6. Make new friends

If you’re new to the area and don’t have many friends or just interested in meeting a new group, volunteering is a great way to meet people. South Florida offers tons of opportunities to help your community, like becoming a Literacy Ambassador to help at-risk children enjoy reading or helping out at a charity dog wash to support the South Florida Siberian Husky Rescue. Wherever you decide to volunteer, you’re sure to meet new people and maybe even find a new hobby.

Now it’s time for the fun stuff! BrightStar Credit Union wants to help you help your community. Keep checking the BrightStar Credit Union Facebook, Instagram and Twitter for updates on an exciting contest coming up that could help out your favorite charity.

 

 

 

 

 

Getting Your Teen a Checking Account: 4 Things to Know

Teens and money

As your teen transitions into adulthood, they’re experiencing many firsts, including a first job and a first paycheck. This is the perfect time for them to start managing their own financial products too. Even if they’re not 18 yet, they can still open their first checking account with your co-signature. A checking account is a crucial stepping-stone on your teen’s journey to full financial independence. Let them practice now, while still under your watchful eye, and they’ll have a clear advantage over their peers when they leave for college or start their first full-time job. Here are four strategies to help your teen use their account to the fullest.

1. Wait until your teen is ready

You know all too well that your teen is unique. Accordingly, not all teens are ready to handle a bank account at the same time. When deciding whether or not you should open one together, focus on your teen’s level of maturity and previous experiences handling cash, rather than their age or year in school. Some teens can handle a bank account at 14, while others may need an extra year or two. Either way, they’ll have plenty of time to practice money management before they move out, so don’t feel the need to rush things.

2. Let your teen manage everything (with your guidance)

Even though you’ll be a joint account holder until your teen turns 18, let them take the lead on managing their money. They should be the ones checking their balance, making ATM withdrawals and using the debit card to make purchases. This is the only way they’ll get better at it. Continue to talk with them about budgeting and responsibility. Let them know you’ll always be available if they have questions. You’ll ultimately have the final say as to how your teen manages the account, but they should still feel like they’re in control of their money.

3. Talk about fees with your teen (so they can avoid them)

The best teen checking accounts are free, meaning your teen should not have to pay any minimum balance requirements or monthly fees. Fortunately, BrightStar Credit Union’s checking account is free, no matter how old you are. However, there may be other fees your teen needs to worry about. Your teen may be charged a fee for an overdraft or using an out-of-network ATM. Go through all the checking account’s boring documents, including the fee schedule, together. Don’t hesitate to ask a BrightStar representative for help if you don’t understand something, or just need clarification.

4. Online banking is the best thing ever

Before computers and smartphones were invented, balancing your checkbook and reviewing your monthly statements were essential skills for anyone with a checking account. They’re still important, of course, but online banking has made them easier than ever. Your tech-savvy teen can easily manage their account right from their computer or smartphone, which will help them stay on budget. BrightStar has mobile apps for your phone and free online banking. Make sure you talk about online safety first, though. Banking online can be dangerous in public places, and you don’t want your teen to become a victim of identity theft.

For more money management tips for your teen please visit http://www.BrightStarU.com

Laura Edgar is a senior writer for NerdWallet, a consumer finance website that helps you with planning your financial future.

Love Fest

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.

Real New Year’s Resolutions for Your Wallet

New Year new youLaura Edgar is a senior writer for NerdWallet.com, an unbiased consumer finance website committed to promoting financial literacy.

This year, make it a priority to get your finances in order. Resolutions like “save money” or “spend less” are well intentioned, but they don’t constitute a plan of action. You’re more likely to stick to your resolutions if they’re simple, clear and action oriented. Here are a few suggestions from the financial literacy experts at NerdWallet to keep you on track.

I will not pay checking fees

Most bank customers pay an average of $117 in fees per year for things like overdrafts and out-of-network ATM use. As a member of a credit union, you’re already on track to save money. BrightStar’s free checking account gives you access to thousands of free ATMs nationwide, plus other great perks like a rewards debit card and free financial counseling. You can help keep your account free by monitoring your balance online, building up a reserve in your savings account avoiding overdrafts. If you don’t already have a checking account with BrightStar, now’s a great time to get one. You’ll get  $100 just for signing up.

I will pay off my student loans

If student loan debt is “good debt”, Americans have too much of a good thing.

According to the New York Federal Reserve, the average student loan debt is now greater than the average credit card debt. In fact, student debt now exceeds $956 billion in total, and the average borrower graduating in 2011 owed $26,600. Yikes! Educate yourself about your repayment options and find a sustainable solution that works for you. If you’re still in school, don’t borrow more than you need.

I will get out of debt

The average American household credit card debt is $7,150. You can pull yourself out by creating a debt repayment plan. We recommend prioritizing your debts by interest rate. If you pay the one with the highest interest rate first, you’ll end up spending less money to pay down your debts over time. We also recommend enlisting professional help. Take advantage of BrightStar’s free financial counseling services for members, offered in partnership with Balance.

I will start saving for retirement

Did you have a 401(k) at your previous job? Now is a great time to roll it over into an IRA. Don’t have a 401(k)? Consider getting an IRA anyway. Most retired people can’t count on employer benefits or social security (or even both!) for all their financial needs, so it’s important to build a nest egg for yourself. IRAs have the added benefit of letting you save for retirement tax-free. What’s not to like?

I will talk about money and estate planning with my partner and my family

Most people have a hard time talking about money. For couples, it’s often harder. Nevertheless, it’s better to have that awkward conversation sooner rather than later. How else can you make sure your family and your assets are protected in your absence? Write your will, look into life insurance, and check in with older family members like your parents to see what their plans are.

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 Has Earned A 5-Star “Superior” Rating from Bauer Financial

Bauer Financial has rated BrightStar Credit Union with a 5-Star “Superior” Rating for safety and soundness.  Bauer Financial has been reporting on and analyzing the performance of U.S. banks and credit unions since 1983.  Ratings are independent. No institution pays them for ratings, nor can any choose to be excluded.  BrightStar is safe and sound with money to lend for cars, homes and more.  Plus deposits at BrightStar are insured to at least $250,000 by the NCUA, an agency of the federal government.

 Learn more about BrightStar’s safety and soundness at http://www.bscu.org/safeandsound.

 Learn more about Bauer Financial on their web site: www.bauerfinancial.com.

 Learn more about the NCUA at www.ncua.gov.