Bill Hampel, chief economist at the Credit Union National Association (CUNA), told readers of AOL’s Walletpop how to determine if a credit union is financially sound.

Because many publications and financial experts have suggested that consumers join credit unions as an alternative to rising fees, fewer perks, and unsatisfactory customer service at many large banks, Walletpop asked Hampel what prospective credit union members should look for when considering a credit union.

“The main thing is to check for deposit insurance,” he advised. “Ninety-nine percent are insured by the National Credit Union Administration (NCUA), which is equivalent to Federal Deposit Insurance Corp. (FDIC) insurance for a bank.” NCUA insurance protects credit union deposit accounts up to $250,000.

Then, prospective members can ask about a credit union’s capital ratio, Hampel said. According to their capital ratios, 96% of all credit unions fit or exceed the criteria for being well-capitalized, recent research indicates.

Credit unions’ culture plays a major role in keeping them financially fit, Hampel said. Unlike at a bank, “No credit union CEO or board member has any stock options, so they have a reduced incentive to take the risks that would make those stock options worth a lot of money,” he added. “They operate at a much lower risk level, and executives don’t get a reward for taking on risk.”

CapEd fits these guidelines on all counts. If you’re already a member, share this good news with co-workers and members of your family who are eligible to join.

Copyright 2011 CUNA Inc.

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