Credit Unions are not part of the problem, they are part of the solution. The main difference between CUs and banks is the profit motive. Banks sell products and services to make money, but CUs sell products and services to serve their members. There are no excessively paid CEOs, or stockholders making excessive profits at the expense of others. Credit unions are not based on greed, and generally do not lend people more than they can afford to repay. They try to be advocates for the members and help them make wise financial decisions. There may be exceptions to the rule, but generally CUs even require basic lending info like proof of income before they lend money to members. There will be some financial impact for CUs because of the mortgage meltdown. Houses that they lent money on are now worth less, making the loans somewhat at risk. Although CUs are not in as bad of shape as some lenders who lent more than the full inflated value of the houses prior to the meltdown. CUs are also having problems with some members that are struggling financially and getting behind on other types of loans like auto loans. They are facing more repo's and member bankruptsies than in the past. However, CUs also have the highest financial reserves of any financial institutions to help them weather this storm.
