What would happen if everyone moved there money from traditional private banks to credit unions/ coop banks
Can credit union and coop banks replace traditional banks completely?
Edit (adding additional question): Has there been an attempt to do this on a national or societal level?
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If you get paid via direct deposit and pay with everything via a card or a mobile app, a cu can replace your bank.
If you want complex investment options than I doubt all CU can do that, but I am sure there are some that can.
If enough retail depositors withdraw all their money and moved it to a CU I suspect they may trigger bank run limits which would cause other banks to preemptively limit withdrawals.
Do you need complex investment options in your bank? I'm sure some banks offer that here, but there are also dedicated services specifically for gambling on the stock market, which I think more people would be drawn to as they are focused on that specific niche. The bank investment options are more for long-term savings rather than proper investments.
Major banks do have their own trading platforms which allow CID, long and short positioning. I doubt a CU would have trading in general, they would have a partner company to do that with.
Thanks for the answer!
You mentioned paying for everything via card or mobile. Does that mean credit unions offer no options to withdraw cash?
Also can banks permanently limit withdrawals or transfers?
There are typically agreements with ATM operators to allow no-fee withdrawals, and you can usually do cashback at the register when making a purchase in many stores, but beyond that you'd need to find an office that can handle cash and not all credit unions have those.
Thanks for your answer!
I'm going to answer the last part of the question, banks and credit unions and these institutions absolutely can, will, and do limit withdrawals. When you don't physically hold your money and it is in an institution, it is no longer your money, it is an IOU with conditions that can be rescinded at any time for any reason.
Entirely depends on the CU
I know the ones in Australia would let you withdraw in person , if you were in a town with that CU or via an ATM.
I believe banks are able to pause transactions out if they approach their solvency thresholds.
In the U.S. most credit unions are regional, if you go to a branch you can withdraw cash easily, or they'll have agreements with ATM networks where you can withdraw cash for a fee, just like banks do.
In my daily life my credit union is indistinguishable from a bank, with the exception that I've had a few auto loans from my credit unions and they've always offered a lower interest rate than anything a bank or car dealership can beat. They also gave me a discounted rate because I was buying an electric car.
