REAL Capitalists Move Our Money from Big Banks to Credit Unions

George Washington's picture


Conservative free market entrepreneurial capitalist Karl Denninger notes:

If you have an account at a BANK, go move it to a CREDIT UNION.


You know, a place that you own and is a mutual association of people?


Yes. One that you own. Where the fees assessed go to provide services to.... you, not to feather the nests of bank executives and stockholders.

Denninger is right.

As HowStuffWorks points out:

Banks are for-profit companies. They make money by charging intereston loans, collecting account fees and reinvesting all that money to earn more profit. But as for-profit companies, they also pay state and federal taxes.


Credit unions, on the other hand, are not-for-profit institutions. Technically, credit unions are owned by their account holders, known as members. Any profit earned by a credit union is either invested back into the organization or paid out to members as a dividend [source: Federal Reserve]. As a not-for-profit institution, credit unions pay no state or federal taxes, meaning they can charge lower interest rates than banks for most financial services.

Real free market, capitalist entrepreneurs want to own and control our own capital. With credit unions, we do so.

Moreover, the big banks no longer do very much traditional banking. Most of their business is from financial speculation. For example, less than 10% of Bank of America’s assets come from traditional banking deposits. Instead, they are mainly engaged in financial speculation and derivatives. (and see this).

Credit unions and small banks, on the other hand, are mainly engaged in traditional banking functions like storing deposits and making loans to Main Street.

As I noted yesterday:


1. The only way to save the economy is to break up the giant, insolvent banks


2. The bought-and-paid-for politicians refuse to do so (because … drumroll, please … they’re bought and paid for by the big banks)


3. So we’ll have to do it ourselves


No wonder churches, local governments, community groups, prominent business men and others are divesting from the big corrupt banks.



The big banks are not engaging in capitalism … rather, they are engaging in socialism, fascism, looting, kleptocracy, oligarchy or banana republic behavior (depending on your preference of wording).


On the other hand, smaller banks are engaging in capitalism – and are actually allocating capital to entrepreneurs (what banks are supposed to do).


If we downsize the giant, socialist banks, the small banks will thrive, thus reinvigorating the entire economy … saving capitalism in the process.

Real capitalists will move our money away from the giant, socialist banks and to credit unions ... where we own and control our capital.

And where our hard-earned money works for us, instead of being gambled and thrown away in the global casino.

In addition, people who are against the Federal Reserve [hello, ZH readers] should move their money out of the giant banks, as that is one of the most effective ways to undermine the Fed's power.

Specifically, ending the Fed and reining in Wall Street are two sides of the same coin. While even top-drawer economists say we must end the Fed, and many libertarians argue that ending the Fed would “change everything”, the Fed is the big banks and the giant banks are the Fed.

It will be impossible to pressure Congress to end the Fed as long as the giant banks have purchased Congress lock, stock and barrel. The dinosaur banks will pressure their water-carriers in Congress to not only keep the Fed alive, but to give it more and more powers.

So all those who want to end the Fed should also support the Move Your Money movement and divest their funds from the giant banks, because only then will it be possible to end the take away the Fed’s main supporters: the giant banks.

As Charles Hugh Smith noted recently:

There are only three things–and only these three–that will cripple Wall Street’s democracy-killing concentration of wealth and power:


1. Transfer the 99%’s money out of Wall Street and the Too Big To Fail Banks


2. Remove campaign contributions from our democracy in a way that the corporate legalist lackeys in the Supreme Court cannot overturn, i.e. entirely publicly financed elections


3. Abolish Wall Street’s dealer, pusher and protector, the Federal Reserve.


My reasoning is very simple:


Everything else people want to see happen cannot happen if:


1) Wall Street and the SDI (systemically dangerous institutions) a.k.a. too big to fail banks, control most Americans’ financial assets and debts


2) The Federal Reserve exists to enable and protect the SDI’s wealth and power via Primary Dealers, the discount window and other pusher/dealer mechanisms


3) Wall Street and the other SDIs can use the billions of dollars they skim from our accounts, IRAs, 401Ks and pensions to buy political influence and protection from regulation and competition.


Therefore these are the necessary foundations of any real change.

As long as Wall Street and the other SDIs control much of the nation’s financial markets, assets and debts, and the Federal Reserve exists to protect and enable their predation and parasitic skimming, they will have the means to reap billions in profits which can then be funneled into our cash-corrupted political system of for-sale toadies and apparatchiks.

If we don’t end the Fed, it will keep propping up the Wall Street con artists.

If we don’t downsize the giant banks, they will keep propping up the Fed.

Get it?

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blindman's picture

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hazeL's picture

Many Americans were outraged last month when Bank of America announced that it would begin charging customers $5 a month to use their debit cards. Similarly, many larger banks said they would be following suit. However, with a little effort a person can find a high-yield checking account with a local bank, a regional bank or a credit union that will pay you to use that same debit card due to the fact that a high-yield checking account is fee free and may even pay you. There are certain rules that must be adhered to in order to keep a fee-free high-yield checking account. Those rules will vary from institution to institution, but generally are similar. Customers not willing to jump through all the hoops necessary to get interest back on a high-yield account can at least enjoy a free checking account devoid of fees. Free beats fee any day.

serf86's picture

Where do the Credit Unions invest their excess deposits?  Seems probable that they would end up back into the treasury instruments or mony market accounts controlled by big banks.   Hope I am wrong


Rynak's picture

Where and how much credit unions invest surpluss, depends on the credit union. However, any halfway trustworthy credit union, will make their overall balancesheet available to you - very often, directly on their website. While that still will not give you exact numbers on in which commodities or stocks or other stuff excess money goes, you still can get a percentage, of how much they have available in pure cash, and how much they have invested in other stuff.

In the case of my CU, the amount of capital invested outside the CU, is 10%. How does that compare to a popular bank, hmm?

Max Fischer's picture



credit unions pay no state or federal taxes, meaning they can charge lower interest rates than banks for most financial services....

This is simply not true. 

While small credit unions may have certain tax exemptions, the TBTF banks have a massive advantage on funding costs (rates), which far over-shadows any tax implications. A decade or two ago, the spread between the cost of money for large mega banks and the cost of money for small, regional banks was ~25 basis points.  Now, over the past two years, it's approaching 100 points, because of the implicit guarantee that they will not be allowed to fail.  In short, the big mega banks can get their money significantly cheaper than regional credit unions, while the smaller banks continue to find themselves in the Friday night obituaries.    

This, in turn, allows the TBTF to undercut most rates offered by the small, regional credit unions.

A simple point about bank taxes....  in 2008, through a maze of loop holes, Goldman Sachs paid a tax rate of 1% on $2.3B in profits with ~$11B set aside in compensation.  So whatever tax advantages the smaller banks theoretically have, it means nothing.  

Max Fischer, Civis Mundi

CustomersMan's picture

SPREAD THE WORD: Empowering The Individual

       There is an action that many people can take that is non-violent and perfectly legal and will give individuals more clout, and expose the banks for the greedy lot that they are.

       The government sends out electronic funds, Direct Deposits to banking institutions each month, ostensibly to save time and mailing costs and for security reasons. That may be true but there are other not so ethical reasons.

       But the US Government also sends out US Treasury checks.

        The banks are taking advantage of the Direct Deposit Money they get each month. They know when the money comes in, they know when and how the money gets spent, and they take advantage of these deposits, the information derived from spending patterns, and exploit it for their own benefit.

        By asking for a check each month instead of Direct Deposit, you are able to take this most coveted form of money (a US Treasury Check) and spending pattern information away from them, and decide where you want to deposit it or cash the check. Set-up a few accounts with smaller banks or credit unions, leaving a minimum balance. You can even take out most of the cash so that you have it and not them.

        And remember each bill we use as currency says "This Note Is Legal Tender For All Debts, Public And Private".  This is a legal contract and you legally can not be discriminated against for using cash.

This will take the power away from the banks that are counting on it and exploiting it and give it back to you, the owner of the funds.

        By the way, the more they resist issuing you a monthly check, the more certain you can be, that there is a undisclosed advantage to the banks in getting your direct deposit money.

        Its time to take back what  is ours, NOW.

dizzyfingers's picture

I did my research and found that safe credit unions with high ratings  weren't available to me. All dealt only with a particular group and no one else could join. The others didn't appear reliable because of subprime and low ratings.

Miss Expectations's picture

There was a Credit Union Bailout in 2010:

(MoneyWatch)  The subprime mortgage mess just won't die -- on Friday, federal regulators took over three wholesale credit unions that had made bad bets on mortgage-backed securities and announced it will back $30 billion in bonds to stabilize the entire sector. Wholesale credit unions invest money and provide back office support for the retail credit unions that directly service members; some of them tried to goose returns by buying subprime-backed securities and saw their portfolios wiped out. As a result, five of the nation's 27 wholesale credit unions have been taken over by the government in the last year-and-a-half.

EDIT:  Here's a Credit Union Search that I found useful in evaluating my Credit Union:


Stun Gun's picture

I'm surprised that some readers here don't understand why removing their deposits from TBTF banks would hurt them. Derivatives goddamnit! The banks are insolvent; the only money they seem to actually have is yours on deposit. Take it away and their situation becomes dire, quick fast and in a hurry.

monoloco's picture

Yes, we can all do our small part to make them less TBTF by taking our money out, with the interest rates being what they are, I prefer the Bank of Tupperware.

bigkahuna's picture

Done in 2006. Never going to any bank again. Never buying any auto from GM/Chrysler. Never shopping at K mart or Sears. Never buying anything Polaroid. Never use MCI. Avoiding Monsanto when ever I can. No more GE. Any chicken-shit company that gives DC a rim-job is off my list. Any company who receives a reach around from DC is off my list.

Blankman's picture

GW - Moving your money into a credit union sounds good on paper if you don't hash out who is on the board of directors at the credit union.  What happens if your credit union is run by say a large multinational firm - CEFCU, Earthmover or Labor Unions are you really doing what you propose or are you just another lemming?  All I am saying is look before you leap, there are some credit unions not affiliated with anything other than geographical areas of service.  Perhaps these are what you should be directing your readers into?

DosZap's picture

Keep in mind ANY bank or CU that goes belly up,insured,the Fed has up to a YEAR to make your account whole again.

Now who's YO DADDY?.

Oswald Spengler's picture

I wouldn't want to join another union. Union troops killed my great grand daddy at Chancellorsville. The Union of Soviet Socialist Republics put another relative in the Gulag and the union at my factory just agreed to cut my benefis.

Bring the Gold's picture

So those benefits...who won them for you in the first place? How about the safety regs at your factory that keep your limbs intact? Your weekends? Your wages? Just curious who won you those things? Also during the past 30 years which most on ZH agree has been the most corrupt era of US government and has seen the greatest slide in standard of living what group corporations or unions has lost power and which has gained power?

As to your use of the word Union to try and draw comparisons between disparate things once could say:

"Well my great, great grandfather was nearly killed by some from the SOUTH, and drugs come from SOUTH America, and SOUTH Central LA has a gang problem, and many illegals come from SOUTH of the border."

See how that silliness works? You can make anything look bad by playing word association games.

P.S. for the record much of my family comes from the South, I was merely proving a point about his absurd use of the word Union. Like anywhere else in this great country the South has wonderful people and assholes.

Uncle Remus's picture

Spengler, you're as big an asshole here as you are when that Goldman fuck channels your sorry ass over on ATO.

InconvenientCounterParty's picture

I think you are very close to a big idea.

Humans are the problem. Don't join them. Liberty=1/population.

I hope you would still consider joining a union of non-human entities. No guarantee you won't be used as fuel, but at least you'll be free.


Credit unions still give you the same 0% on your money as the TBTF banks.

It's the fiat system that's phucked.  Exactly how is that 15T dollar debt going to get repaid? Answer.......never, without inflation.  

Colonel's picture

It seems a good remedy for the "too big too fail" meme is decentralization.

mrdenis's picture

I have moved most of my money to small regional S&L ,that can take direct deposit small step for man........

daxtonbrown's picture

Some of us skip it all and move our money to Canada.

DosZap's picture


Some of us skip it all and move our money to Canada.

Out of the mouth of the dragon, into the belly of the beast huh?

Two PEAS in a POD.

Thucydides's picture

I moved all my money into food and water, guns, ammo then stored them in the underground bunker I built with the money I saved from all the various fees they were charging me.  Just kidding,  I only stored them in the basement.

Melin's picture

"Real free market, capitalist entrepreneurs want to own and control our own capital. With credit unions, we do so."

Uh huh. Yeah.  Credit Unions. The hallmark of laissez-faire.

GW, you consistently obfuscate the meanings of our constitution and Capitalism.

Bring the Gold's picture

So where would you advise people to keep their wealth? In the too big to fail's? They have worked diligently for decades to reduce their regulations. How has that worked out so far? What's that? You say it's the root cause of our current global melt down?

Ideology can blind one to reality, be careful of that. Ultimately it's human nature in so far as it's egoic behavior, that is the root of most of these problems. Blaming just government, or just corporations, or just socialism, or just statism, or just religion, or just science or what have you is always limited and ignores the wealth of human history that shows we as humans have an unsurpassed ability to create and fuck up any system we have ever come up with.

blindman's picture

Whole Lotta Live: Nick Lowe - What's So Funny 'Bout Peace Love and Understanding

blindman's picture

"where are the strong, who are the trusted?"

Nate H's picture

this won't work

credit unions have a limit to how much they could take and still pay interest, etc. In a non-growth economy (which is where we are headed irrespective of how the credit thing shakes out), they will have to increase the amount of loans they make to increasingly shakier credits at the margin, which starts the 'undue risk' cycle over again.


Yes its true that the Basel 2,3 won't apply and credit unions can't create money out of thin air - but this is like someone that needs a heart transplant deciding to give up meat and cheese - probably a good thing to do, but largely symbolic unless you get an operation first.


(on a social level I applaud that people are trying to do something, but on practical level, this won't work and could make things worse if it upsets the cash applecart)

JamesBond's picture

just received a notice from my CU requesting a vote to change the charter from federal to state; which would ease up their lening standards and by defacto put older accounts at risk....

slowimplosion's picture

IMHO small local banks would be just as good.

11b40's picture

For sure, it won't work if we don't try.  It can work if enough do & the arguments you offer as an exscuse for doing nothing are weak and unclear, at best.

First, how much interest are the big banks paying?  How many loans are they making to Main Street?  Regardless if we experience long-term negative growth, there will still be worthy projects to finance.  Who better to determine the quality of local projects?  Why would the local credit union not be able to pay a competitive rate of interest vs larger banks, all the while with lower fees?

I don't expect this movement alone to bring the big banks to their knees, but it is one more way to express our disgust with the system.  Death by a thousand little cuts will ultimately be the best & least violent route to change.

Rockfish's picture

.  As a result I believe there are some of the actions I should take during the NOW time.

  • Locate where you can live off the land or close enough to supplement what you produce and your labor can be paid for in food, fuel ..., Water.
  • Amass gold, silver, copper, hand tools useful for trade. Even a modest stash would be worth a fortune.
  • Put in place self sustaining energy even if some of those flat screens have to go.
  • Build strong relationships with neighbor and blood. No man is an Island.

"I will exploit the NOW to prepare for the future"

rcwhalen's picture


Guys, do not embrace credit unions as some sort of safe and sound panacea.  There are significant reporting and operational problems with CUs.  We don't even rate them because the reporting anhjd accounting taxonomy are so unstable.  You cannot tell whether your credit union is a crap shoot or a sound, low beta depository as they are meant to be.  When the National Credit Union Administration gets its act together on disclosure, then we'll have more to say.  Our tool on the Move Your Money site has banks only and for good reason:

disabledvet's picture

i agree that Credit Unions do actually lend to consumers...and at less than usurious rates i might add--"which of course is a problem." Thank God the mega banks don't do any of this lending thing at all and thus have no significant reporting problems whatsoever! In the meantime could someone explain to me the "empty box" thing again?

swmnguy's picture

I found my credit union on the site you linked.  In fact, I found all the credit unions in my ZIP code through the link you posted.

Credit Union disclosure is less than transparent, so banks are safer?  Thanks for nothing; now I have to mop the spit-coffee off my monitor.

piceridu's picture

If you have to use a bank, this is the only one I'd use:

DosZap's picture



They are just as safe as your bank as they are Fed, are you safe?.'
Hell No, both counts.

midtowng's picture

Credit unions aren't perfect, but they are safer than the big (insolvent) banks, and they are federally insured too.

dizzyfingers's picture

The "insurers" are busted, (taxpayers will have to reimburse treasury for losses) and not all credit unions are solvent but they also accept deposits when they're not solvent just like the big (insolvent) banks.

disabledvet's picture

they are now. they weren't before 2008 actually. that was all part of the "regulatory arbitrage" that constitutes "present day Wall Street." No one is lending to anybody...nor have they been for years. All money is simply recycled from the government then right back to it...while collecting hundred million dollar bonus's in the process. then their media companies complain "Congress is a do nothing" no less! Unfortunately their laziness and utter worthlessness to the human race is now "coming home to roost" in the form of "the end of EU." stay long the industrial powerhouse of Turkey. that goes a long way towards explaining "a lot of things" shall we say.

ArmchairRevolutionary's picture


First credit unions, in general are safer than banks due to their cap requirements. Second, that is not the point (just keep your deposits under the $250K limit). The point is to move your money away from a system that essentially counterfeits money through fractional reserve lending where the beneficiary is wall street.

I call bullshit on your Move Your Money site.

Ganja Jane's picture


My credit union still keeps "it's" money in a larger bank that bought out 3 or so -I lost count- smaller banks in the last 4 years or so...ball park figures...

ArmchairRevolutionary's picture

This would be the only reason not to move your money to a specific credit union.

mailll's picture

I would like to make a suggestion here. If you don't want to move all your money to a Credit Union, then just move a small portion of it.  Just put your feet in the water for now instead of just jumping in.  If the water feels OK, then jump in.

Ganja Jane's picture

Teaching Pigs to sing:

I think people just need to understand how the monetary system works. Most people still don't understand -or even know- that the Federal Reserve is a private bank. A year ago when I was petitioning for a third party candidate during the NY gubernatorial and taking names for other third parties running candidates that DIDN'T include Cuomo and Palidino, I handed out palmcards with issues. One of such issues was corporate personhood. Most people either didn't know and upon explanation, didn't believe me either. So, I printed out  a few things from a few of the well-er known propaganda machines on it and handed it out. The color drained from peoples faces. Others spit on me and cursed my being allowed to live because Nader RUINED!!!!! RUINED!!!! the 2000 election... "Obama 2012!" jokes on them now, huh?

Anyway, I planned on educating people along the way this general election 'season.' I have educated a few people in the occupy movement about fractional reserve banking and the Federal Reserve. Most people in the movement haven't pulled back the layer of corporatism to see the usual players (Rothschilds, Rockefellers, Oppenheimers, Morgans, Warburgs, Windsors...etc...) or understand that these 'private clubs' (UN, Trilateral Commission, CFR, WTO) are private clubs controlled and administrated by those same people behind the corporations that buy our so-called 'representation.'

In the movement, I am in the minority:

  I don't believe in a 'Robin Hood' tax.

  I understand the 99% and 1% are bullshit numbers as the Rothschilds have an estimated wealth of what...about $500's difficult to get a actual number. It's the FAMILIES that are so grossly wealthy from exploiting countries thru war, the WTO and IMF, that they too wealthy to be listed in Forbes. It's more like .1 % or .01%. They created a central banking system and set it up with the help of treasonous government 'officials.' Over the last 100 years, we have witnessed as a nation the biggest transfer of wealth (and sovereignty) from the majority to the minority hence the disappearing middle class and growing 'poor' class.

  The masses need to be educated and not indoctrinated. Schools are a problem.Our school aren't education institutions as much as they are  Government Sponsored Indoctrination Centers. They're teaching our children the US is a democracy and the US is righteous in war. Com'on!

SumSUN's picture

.01% of 7 billion is 70 million.  The top 7000 wealthiest people would be the .000001%.

moondog's picture

Yes, I have been trying to teach the unwashed massed as well. Most people will not let go of the left/right political paradigm. I have also tried to spread the word about the fed, the corporate war machine, etc. Some will agree with pieces of my message, but it is rare that they will acknowledge the big picture.

Keep trying, but take care of preparing your family in case change does not come soon enough.

11b40's picture

You go, girl!  +100....thanks, & keep up the good work.


mailll's picture

I moved my money to a Credit Union years ago and am completely satisfied with it.  The main reason I did was because they paid more interest especially on CD's.  The Occupy Wall Street movement is pushing this also (Dump Your Bank day) which is a good thing.  This is one way we can defeat the Wall Street banks. They need to push it more since the Wall Street banks  and the Fed caused this huge economic disaster anyway (of course their stupid clients are to blame also. Just because the banks offered free candy, they didn't have to take it).  During the last 10 years our economy should have headed towards a soft landing but because of the Wall Street bankers greed and criminal acts, we all suffered with a crash landing instead.  Strengthen the Credit Unions and weaken Wall Street banks should be pushed more.  Great Idea, whoever thought of it.

duo's picture

The CU I used for years had to be taken over by the NCUA for.....risky business loans.  They are not all safe, but they are insured up to $200K or something like that. 

I found a community bank a mile from my house with $100M in assets.  It has one location and a few ATMs, but  I met the president/owner they day I opened my account.  They are a bank but they don't do home loans.

If you can't find a CU nearby, some of these smaller banks are worth looking into.