Is it fair business practice for independent credit unions to accept transactions for each other nation wide?
Whether it is “fair” (and by the way, fair to whom?) is irrelevant. What is relevant is whether it adds value to the consumer (and it does). As to banks, they could easily offer a similar service if they ever got their act together. The technology is there; all they need to do is to buy into a shared EFT network and processor (similar to CO-OP Financial Services collectively owned by credit unions). Alas, the banks are more concerned about maintaining exclusivity of their customer relationships (including charging ATM fees to non-customers or to customers using other banks’ ATMs) and expanding their geographic scope… Additionally, you have to understand why credit unions all of a sudden got interested in this. And they got interested simply because they felt they are being overshadowed by banks. Most credit unions are small and local, operating within one county or few adjacent counties. Compare
First, banks (at least the larger ones), have branches all over the country. Credit unions have to be competitive with banks to attract customers. They typically only have 1 or 2 branches. Because my bank, Washington Mutual, is going the way of Indy Mac, I started researching credit unions. Credit unions have the same FDIC protection as for profit banks and the same products, but the benefits are much better. The ones I looked at offer interest payments on no minimum checking and savings accounts, lower fees for cashiers checks and money orders, etc. I was also pleasantly surprised to see that with one credit union, I could use an ATM, for free, at any 7-11. Not to mention that I could make deposits and withdrawals at any participating credit union in the country.
