People in a credit union offfice.
People in a credit union offfice. - 
Listen To The Story


Bill Radke: Banks have definitely taken a hit to their reputation
the last couple of years. Credit unions have managed to keep a better image, but they're also not immune to the recession.

As Marketplace's Jeff Tyler reports.

Jeff Tyler: Regulators have closed 10 credit unions since the beginning of the year. During that same time, more than 80 banks failed. Credit unions are considered safer than banks because they have more restrictions on their investments and typically have more reserves.

Esmeal Adibi is director of the Anderson Center for Economic Research at Chapman University.

Esmeal Adibi: They have one advantage over banks, which is they don't pay taxes.

That allows credit unions to charge customers lower fees and lower interest rates. But when credit unions run low on cash, Adibi says it's harder for them to raise money.

Adibi: Publicly-traded bank can issue stocks or they can issue bonds to shore up their reserves. Credit union don't have that access to capital.

He expects more credit unions will fail this year. Just like banks, credit union deposits are insured up to $250,000.

I'm Jeff Tyler for Marketplace.

Follow Jeff Tyler at @JeffMarketplace