Gen Y Perspective: Why My PFI isn’t a Credit Union

I have a confession to make…my primary financial institution isn’t a credit union. It’s PNC.


Let me get some things out of the way first: I work for Callahan & Associates and support the credit union movement; I recognize the differences between credit unions and banks; and I understand the concept and details behind shared branching. But I have a confession to make…my primary financial institution isn’t a credit union. It’s PNC.

I grew up using my parents’ small community financial institution, First Federal Savings & Loan, a $100 million thrift located in coastal Maine. The institution was focused on service. I knew the three tellers and manager of my hometown branch (and they knew me) by the time I was depositing checks from my ninth birthday. When I went to college, I maintained my relationship with them – bearing $3 ATM fees as necessary, and mailing work-study checks back to Maine once a month.

The breaking point came when I moved down to Washington, DC. No longer could I justify the ATM fees and, to be fair, I wanted my new independence to extend to my finances. So, about a year ago I opened an account with PNC’s Virtual Wallet.

Primarily an online banking suite of linked applications, the Virtual Wallet is three accounts: low-interest checking, low-interest savings, and high-interest savings (dubbed Spend, Reserve, and Growth, respectively). But why didn’t I choose a credit union?

  1. Convenience – While myths abound about Gen Y, one fact exists: the majority of us still have to use a branch. Living in a city, the mile to the nearest credit union branch seemed too far to hike both ways on my lunch break (several branches were closer, but had restricted access). Now, I visit the PNC branch 100 feet from my office building, once per month to deposit reimbursement checks and some cash. I also checked distances for the nearest ATM, but PNC won that round as well.
  2. Online Banking Suite - Previously I was using my community bank for checking and an E-Trade account for high-interest savings. Yet I grew increasingly frustrated with the three day transfer period between accounts. The linked accounts in PNC Virtual Wallet provide a high-interest savings account with same-day transfers. I also regularly use their “Wish List” function within online banking to list savings goals or track money saved for future purchases. Through mobile banking, via an iPhone application and SMS messaging, I can also easily check balances without using the full online banking suite. Automatic alerts and transfers, in addition to standard bill pay, complete the picture.
  3. Rates – The rates were great a year ago (3.00% APR on the high-interest savings in June 2008). Right now they’re good (1.75% at the time of publication), and still better than the competition.

However, I have experienced some issues with PNC. I was supposed to receive a box of checks after opening an account – crucial to fully moving over automatic payments and direct deposit. It took six weeks, four phone calls, and two secured email messages before receiving the checks. Limits on the account include a $0.50 fee per check after three written checks per month, the high interest savings is limited to six withdrawals per month and only applies to account balances less than $25,000 (not that I have to worry about that).

What can credit unions learn from my tale? Few, if any credit unions, can offer the range of services that PNC, or other national banks can. I would switch to a credit union if they offer a high-interest savings account, cool online banking features and are reasonably convenient. The last two qualifications overlap. Offering remote deposit capture would eliminate 75% of my branch trips and I can easily use shared branching for the rest.

Developing a dynamic online banking suite is quite possible. Offering the high interest rates with today’s spreads may be more difficult, but credit unions across the country are finding ways to offer high-interest checking accounts. All of the features that I desire exist at credit unions today – yet I haven’t encountered an institution where they exist together. 

With credit unions’ unique ability to collaborate, smaller organizations can leverage others’ expertise and resources. Examples of collaboration in technology and product development are beginning to emerge throughout the industry. What can your credit union create with the right partners?




Sept. 21, 2009


  • This is a great article. Our company recently conducted a survey that shows only 21% of the respondents actually used credit unions as PFI. Research also shows that over 60% of people prefer to bank both close to where they live and work. Although credit unions are not on every street corner I think the shared services network if marketed well would give credit unions that advantage. I worked at a credit union for years. Not until recently I had a chance to check out the shared service network. It was great! I was able to make my deposits in real time. However the holds on the checks are still two days at my credit union even if you deposit it right at the branch. My company is currently running member acquisition program for credit unions. This article provided some great insight. For more details on the member acquisition program visit
    Karlene Facey
  • It maybe a little extreme to request the writer switch her career due to her banking preference. I work for a credit union and continue to have accounts at banking institutions for various reasons as well. As a credit union executive, my personal opiinion is that we credit unions cannot be everything to everybody...we all have our niche, as does the PNC's and ING's of the world...and NO, we would not be able to live on that spread! In fact, I often wonder just how much us credit unions and banks are willing to pay for these so called "cheap" checking account deposits? Between paying these high rates of interest as suggested paying for ancillary services such as debit cards, home banking, bill pay, mobeile banking, shared branching, remote capture, etc., combined with all the recent fraud losses on checking accounts and debit cards, you have to start asking yourself are these deposits really worth it? Being a small country banker, I don't have a staff of accountants and CPA's to guide me on this, but I do know one thing, that we all need to identify our niche and stay within it.... I for one, would probably not want the writer's accounts, particularly if I had to pay that high rate of interest on the checking account, or savings account for that matter - good luck PNC!! No offense to anyone here withy regards to those comments...this is what makes America great - we all have choices on services that best fit our needs.
    Steve Bentley
  • Excellent inside view into reasons anyone will use for why they choose a PFI as they have. Credit Unions to the power of one can't offer the buffet of services as banks with branches across the U.S. - but Credit Unions who partner with a CUSO, such as CU*Answers, CU*South, and CU*Northwest have the power of well over 150 credit unions partnered with vendors who seamlessly provide innovative and stategic financial services. Networks are powerful conduits opening the path to shared services. In fact, Steven Covey would call this opportunity a Win-Win - I'm sure of it!
  • Great article, Lydia.

    Credit union leadership needs to step-up and meet the expectations of our future members. Isn't that the obligation we work under? Are we saying that we can't compete with banks? No? Let's stop pretending that we posses some kind of insulation from market forces.

    Matt Purvis
  • Although I can appreciate the convenience and rate issue there must be several CU's in your area that can meet or beat those services? There certainly are in our area. This article reminds me of a friend who is a senior exec for Toyota yets drives a german import as his personal car. When your paycheck comes from the work of a specific industry it seems only logical that you would want to support the people that help fund that income stream? No support - possibly no paycheck? Maybe you need to consider a career with American Banker?
    Richard Cooper