Bank Vs. Credit Union Realities

By Ron Shevlin

Last July, I published (Motley) Fools Shouldn’t Write About Big Data in which I took Motley Fool to task for publishing something that I concluded was ”an embarrassment to high quality journalism” because of the article’s inconsistencies and unsupportable assertions.

As Britney Spears might say, “Oops they did it again.”

An article penned by a Motley Fool contributing writer titled Americans Keep Fleeing Banks, Flock to Credit Unions Instead contains the following:

“Given current public sentiment against the nation’s big financial institutions, it’s a sentiment a lot of Americans might be able to get behind. Not robbing banks, exactly, but taking their money out of them … and putting it in credit unions instead. Owned by their members (rather than by profit-hungry shareholders), credit unions have both an incentive to keep costs low and a complementary lack of incentive to raise costs high.”

After comparing bank and credit union fees and rates, the author concludes “None of this is good news for investors in banking stocks, granted.”

My take: Shoddy journalism at its worst.

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Let’s start with the title of the article which asserts that Americans are “fleeing” banks.

According to SNL Financial (no, not Saturday Night Live), through the first half of 2012, just a handful of the 50 largest banks experienced a decline in deposits from their 2011 levels.

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