"Put it in a credit union": TikTokers debate how to Trump-proof their money

As economic uncertainty grows, Americans are reconsidering how to best protect their money. 

“Take all of your money out of your bank account and put it in a credit union,” TikTok creator Zach Herberholz advised in a recent post.

Other creators on TikTok, worried about the potential elimination of the Federal Deposit Insurance Corporation under the Trump administration, have started conversations around whether credit unions are a good alternative to big banks in a downturn. 

The unease is certainly understandable: The Trump administration has floated various ideas of folding the bank regulator under a number of different agencies, the Wall Street Journal reported — a scenario that could dramatically affect the agencies in charge of protecting consumers' money. 

But before you pull all the money out of your bank and head for the nearest credit union, here are some issues to consider.

How credit unions differ from banks

U.S. credit unions evolved from a European, community-centric model and were originally designed to make the American financial system more competitive and inclusive. 

Unlike traditional banks, credit unions are not-for-profit, member-owned institutions. They are exempt from federal taxes, allowing them to offer lower fees and provide some free services that regular banks typically don’t. Credit unions can help customers improve their credit ratings through products like credit-building loans, and they offer free financial education and assistance.

Their popularity grew during the 2008 recession as the turmoil of the banking industry prompted consumers to explore alternatives. Currently there are over 140 million members of federally insured credit unions, and those numbers have been growing.

While some banking associations argue that credit unions have gotten too big and should start paying taxes, credit unions have historically been the “warm and fuzzy relatives of banks,” as financial expert Erica Sandberg describes them.

Credit union advocates point to positive poll numbers among consumers: 89% of credit union members said their financial well-being has improved, according to recent data compiled by America’s Credit Unions, a political action committee.

“If you are sick to death of your multinational bank, I would urge you to [use] whatever excuse you have to check out your local credit unions, because I think they're terrific,” Liz Weston, a personal finance expert and author of "10 Commandments of Money," told Salon. She noted that credit unions typically offer better interest rates and solid customer service.

“Because they're owned by their members, they're meant to serve their members," Weston said.

That means that credit unions can offer more support to customers struggling with lower credit scores, for example, said Sandberg, a personal finance expert for BadCredit.org and CardRates.

“Interest rates on credit products tend to be lower and there are few, if any, fees associated with deposit accounts,” she said. “With more people struggling to make ends meet, low-cost products and services are especially appealing.”

Other considerations

Moving your money to a credit union could be prudent if you want lower fees, personalized service and a community-oriented experience. 

However, access to credit unions could be limited by their specific membership requirements. Some only serve educators or military service members, for example, or people who live and work in the same area. Credit unions might have fewer branches or ATMs than banks offer, or fewer products and services like digital banking.

And while credit unions are federally insured by the National Credit Union Administration, there are questions over whether those protections will last. Chip Filson, who served as a credit union regulator from 1977 to 1985, has said the Trump administration's policies throw uncertainty into the picture.

The administration has not explicitly shared any plans to dismantle or significantly change the NCUA, although some of Trump's executive orders have impacted the agency's operations, including a hiring freeze and the end of diversity, equity and inclusion initiatives.  

“We’re just going through them one by one, complying. Not trying to get in the news,” Kyle Hauptman, the Trump-appointed head of NCUA, said in an interview with Ryan Tracy of Capital Account.

Ultimately, financial experts advise that diversifying where you keep your money — such as maintaining accounts at both a bank and a credit union — might be the best path forward, providing peace of mind and convenience at a time when a lot of protections we’ve taken for granted are under threat.