Credit unions gain new potential as a place to save

While the nation's banks and savings-and-loans anxiously await the lifting of interest rate ceilings, another segment of the financial services industry has been fully deregulated and can offer whatever interest rate it likes. So far, it seems in no hurry to take advantage.

Some 45 million Americans belong to credit unions, those private institutions best known for their automatic savings plans and low-interest loans for things such as cars, home improvements, and vacations. Until recently, credit unions were known as conservative savings programs where people made deposits every payday--usually through payroll deduction plans--and where other people, often volunteers, managed the money.

Today, however, the credit union has been given the opportunity to be a pioneer in trying new services that are likely to be trotted out in a few years by banks and thrifts.

In March, the National Credit Union Administration, which regulates all federally chartered credit unions, proposed a two-sentence rule that removed almost all restrictions on the federal credit union industry, including any ceilings they could offer on deposits. The new rule took effect April 21.

The reaction so far, say officials of credit union groups, has been fairly quiet, with a few exceptions. Most credit unions have been cautious in raising interest rates on their standard savings accounts. And while some of the unions were offering their own versions of money market mutual funds before the new rule, it now permits them to offer returns on those accounts that are fully competitive with standard money funds.

At Eastern Air Lines Credit Union, for instance, the machinery for starting a money fund was set up before April 21, says Arthur G. DeRusso, general manager of the union. Since that date, more than $11 million has come into the fund, not very large by mutual fund industry standards, but quite rapid for a new credit union account, Mr. DeRusso says.

Some of the larger and more adventurous credit unions have also been offering Visa and MasterCard charge accounts and have been pooling members' deposits to make stock market purchases at reduced commission rates.

The new rules are expected to give credit unions the freedom to be more responsive to their members' needs. Being so close to their depositors--most company credit unions are in the same building as their members' company, or within walking distance--they have been forced to be responsive to the people who put money in their coffers.

The new rules are also expected to get many more people interested in joining credit unions. Some, who thought that making deposits always meant putting money in a bank, will be pleasantly surprised by the experience. Others may be disappointed. It will all depend on how much investigating they do beforehand.

The first thing people thinking of joining a credit union should do is see if it is insured. Deposits at all federally chartered credit union accounts are insured up to $100,000 by the National Credit Union Administration. In addition, most state-chartered credit unions have insurance through a similar state agency.

Insurance is especially important if the credit union you are joining is run by volunteers. While the credit union industry was founded on the idea of volunteer management, in recent years more credit unions have installed professional managers to cope with the complex financial services being offered. Still, there are many small credit unions that offer just savings-and-loan programs. Here, volunteer management is not only adequate but cuts down expenses.

A credit union's operating expenses should not exceed 30 percent of its total income; at larger credit unions, where the ratio of members to managers is smaller, the figure should be smaller. At Eastern, Mr. DeRusso says, the expenses-to-income ratio is about 19 percent. For a simple ''plain vanilla'' credit union handling payroll deposits and short-term loans, he says, the ratio should not be more than 12 to 15 percent.

Whether the managers are paid professionals or volunteers, it would be a good idea to ask co-workers or others who are already members about the credit union's reputation. Have there been processing errors, in which people were not credited with deposits or where loan payments were not recorded? Have account balances not been kept up to date so that share drafts--credit unions' versions of checks - have bounced? Have there been delays in getting loan applications approved?

Complaints like these indicate the staff is too small or not adequately trained. In these cases, it may be better to overlook the advantages of the credit union and go to a bank. Ex-wives' social security benefits

My husband and I have been married six years. He and his first wife were divorced 15 years ago after being married 18 years. She has worked since then. Will she be able to draw his social security rather than her own? Also, how long will we need to be married for me to draw it rather than her? O. K.

As long as your husband and his first wife were married at least 10 years, she is eligible for full spousal benefits when she reaches 65 years of age. The same goes for you, after the two of you have been married 10 years. The fact that the first wife is receiving full benefits has no effect on the payments coming to you.

If you would like a financial question considered for publication in this column, please send it to Moneywise, The Christian Science Monitor, One Norway Street, Boston, Mass. 02115. No personal replies can be given by mail or phone. References to investments are not an endorsement or recommendation by this newspaper.