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Why federal credit unions are better for your wallet and your conscience

Jun. 28, 2017
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There’s a new craze sweeping the nation, and youngsters like myself everywhere are hopping aboard the bandwagon. No, I’m not talking about fidget spinners or “don’t touch the floor” memes—I’m talking about ditching your Big Six bank account for a credit union. It’s easy, profitable, and good for the environment, and it’s all the rage! 

I first learned about credit unions back in September when I heard what was going on with the Dakota Access Pipeline. For those who need a refresher, the Dakota Access Pipeline (or DAPL) is a 1,168 mile long crude oil pipeline which crosses through four states: North Dakota, South Dakota, Iowa, and Illinois. The pipeline, financed by Energy Transfer Partners, is capable of transporting 470,000 barrels of crude oil a day, which would be distributed to various markets throughout the Midwest and East Coast. The pipeline was a $3.7 billion project. However, like most pipeline projects, it has already had devastating consequences—with more sure to follow.

The construction of DAPL was initially protested by the Standing Rock Sioux Tribe, an Indian tribe based in North Dakota. Why? Well, as has occurred throughout U.S. history, the federal government was profiting off of Native American land at the price of their culture, well-being, and even lives. DAPL, which was approved by the U.S. Army Corps of Engineers, was proposed to pass right next to the Standing Rock reservation and under the Missouri River. In addition to destroying sacred cultural sites, the pipeline also posed a major threat to the integrity of the Missouri River—which happens to be the Sioux Tribe’s water supply. If the pipeline were to leak, it would contaminate a water source which serves tens of thousands of people.

The Tribe sued the Army Corps, saying the pipeline "threatens the Tribe's environmental and economic well-being, and would damage and destroy sites of great historic, religious, and cultural significance to the Tribe." Though the Army Corps promised safeguards, the Chicago Tribune reports that since 2009 the number of pipeline related leaks and accidents has gone up by 60%. And that’s not the only concern: the pipeline also has tremendous environmental risks. Although it could offer a generous economic boom, the long-term results would be devastating to our planet. Not only would the pipeline be responsible for directly draining more fossil fuels from the Bakken Shale (the oil-rich area where the start of the pipeline is located)—it’s also another investment that represents our adversity to finding a more eco-friendly alternative. If we continue as we are now, global warming will cause climate change that would be catastrophic to our planet.

As you might have heard, these acute concerns led to one of the largest protests in U.S. history. Camps were set up at the Standing Rock reservation and all along the proposed route of the pipeline, where numerous activists and Indian tribes gathered in support of the Sioux. The protests lasted for months. The militarized police presence at the protest sites led to countless arrests, and numerous protesters were injured due to rubber bullets, pepper spray, freezing cold water, and brute force. When the protestors were ultimately unable to stop the construction of the line itself, their legal representation took up the charge in hopes of stopping the pipeline from becoming operational—and on June 14th, after months of protests and legal battles, the Court found that approval of the Dakota Access Pipeline violated the law. This decision is not only a well-earned victory for the Sioux, but also for the environment and for all the people who inhabit this planet. One can only hope that more decisions like this one are made in the future. 

So what does all of this have to do with credit unions? A lot, as it turns out. Many unethical projects (like DAPL) are funded by banks—which, after al, are for-profit institutions. Most oil pipelines generate considerable profit, which means many corporations and banks want to invest. Some of the banks that backed this project included Bank of America, Wells Fargo, CitiBank, and Chase, to name a few. Anyone who has money in these banks is supporting a system that profits off of projects like DAPL.

Psst: credit unions don’t do that.

Credit unions are not-for-profit, member-focused institutions, which means they are owned and operated by their members, rather than banks which are owned by stockholders. What this means is that any individual who opens an account with a credit union and pays the initial membership deposit becomes a partial owner of the credit union. As a partial owner, you are given a say in the credit union’s decisions. In other words, no projects that could potentially ruin lives and the environment would be funded from the institution you are involved with.

In addition to being a more morally sound choice, credit unions are also better for you financially. If you pass the membership requirements, some of the advantages include: higher interest rates, lower loan and credit card rates, lower fees, more personal service, more flexibility, and fewer complications with regards to terms. 

Although the personal financial benefits of switching to a credit union are awesome, what really matters is knowing that you are not inadvertently backing projects that destroy lives. It’s time we all take accountability: switching to a credit union is a great place to start.