One upon a time there were banks that cared very much about the people. They knew their customers by name and worked hard to try and help them. But along the way the banks grew and grew until it was impossible for them to know their customers. They managed to bring some great rates for savings and loans and even free banking, but it no longer felt like they were doing it for the people, just for the rich folk. Wouldn’t it be great if we could go back in time to when banks were truly part of the community?
So one day a group of people got together and set up a savings club so that it could use these savings to help their friends and neighbours out with a loan when times were difficult. A small amount of interest was added and at the end of the year any money left was shared out amongst everyone.
“What a great idea this is” said everyone “far too many computers are saying ‘No!’ to us, particulary for small amounts or the interest fees are too high”
And on that day credit unions were born and more and more people joined seeing that financial co-operation like this was a great idea and wanted to be part of it. One day credit unions grew to a point where they could offer banking too!
“Hold on though” said one money savvy person one day. “Why do I have to pay for my credit union bank account now, when my Bank gives it free?”
“Does it?” said yet another more money savvy person. “Tell that to the person that has gone over drawn unexpectedly or is struggling to meet all the direct debit payments. They pay a big fee for this with their bank”.
The second money savvy person went on when he saw the quizzical look on his companions face. “Do you think it is fair that one person should fund the service for others just because they are in financial difficulty? Doesn’t it make more sense to spread the cost across everyone so that the people in difficulty only pay for what they use and not so others can enjoy free banking?”
The first money savvy person looked a little sheepish and quietly said “I hadn’t looked at it like that” and opened a rent payment current account happy to pay his 95p a week. Not only that he told all his friends and neighbours about it, became a champion of the credit unions and lived happily ever after.
The end... or is it?
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