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The Credit Union Advantage

Credit unions receive high marks for consumer value since cooperatives don't try to maximize income by using high fees. "The fee difference (between credit unions and banks) is striking and helps explain why consumers repeatedly rate credit unions more highly than banks," said Consumer Federation of America (CFA) Executive Director Steve Brobeck during a news conference on fee comparisons among financial institutions.

The CFA recommends that consumers check into credit unions for good loan and savings rates. The CFA noted that compared to credit unions, banks pay significantly lower rates on savings accounts and CDs, but they charge higher consumer loan rates. "The reason credit unions offer better rates is that they are non-profit, member-owned, cooperative institutions that work for the benefit of their members," said Brobeck. "Credit unions don't have to pay dividends to stockholders or directors. Another factor is that credit unions' operating expenses are considerable lower than the operating expenses of banks."

In addition to basic share accounts and personal loan programs, many credit unions offer share draft (checking) services, credit cards, ATM cards, money orders, IRAs, account insurance, special savings club accounts, student loans, mortgage and vehicle loans and financial planning services.

Credit unions also give members access to low-cost life, savings and loan insurance through a company that only serves credit unions and members. The CFA has praised credit union insurance loan products as some of the best values around.