Richmond paper: Look at CU deals; Cheney tells why

RICHMOND, Va. (8/13/10)–Credit unions historically have offered better rates and terms on financial products than banks, and consumers should include them in their search for the best deals, according to a Richmond, Va., newspaper. The article features CUNA President/CEO Bill Cheney, who explains how the credit union difference translates into savings for consumers.

Informa Research Services Inc., a California-based market research company that tracks 3,500 financial institutions nationwide, including 500 credit unions, provided the Richmond Times-Dispatch (Aug. 8) with a comparison of credit union and bank rates and fees as of July 27:

According to the newspaper, the comparison indicates that on average:

• A $2,500 checking account has a 0.34% annual percentage yield (APY) at credit unions, compared with a lower 0.25% at banks:
• A $1,000 regular savings account has a 0.31% average APY at credit unions, compared with 0.26% at banks;
• A one-year $10,000 certificate of deposit has a higher 0.96% average APY at credit unions, compared with 0.82% at banks;
• A five-year new-auto loan has a 4.64% average rate at credit unions, compared with 5.98% at banks; and
• Overdraft fees on checking have a $25.29 on average at credit unions, compared with $29.35 at banks.

“Credit unions generally have more competitive rates on loans and more generous rates on deposits,” Greg McBride, senior financial analyst at Bankrate.com., told the paper.

“Since we don’t have shareholders, we don’t have to pay dividends,” Bill Cheney, president/CEO of Credit Union National Association, told the paper. That translates to savings for members, the paper added.

“There’s not a one-size-fits-all answer for everyone,” McBride concluded. “However, credit unions do warrant being included in your search, whether you’re looking to move your entire banking relationship or just looking for the most competitive loan rate.”

AARP, Consumer Reports: Time to check out CUs

NEW YORK (6/7/10)–Credit unions are the place to go if you want to move your money, AARP Magazine tells its 47 million readers in its July/August issue. The sentiments are echoed in the July issue of Consumer Reports.

In “The Little Banks That Can,” AARP cites “three compelling reasons” to switch: lower fees, higher interest rates on deposits and better service. “As it turns out, you are likely to find all three at some of the smallest financial institutions in the nation: credit unions,” says the two-page article.

The article references data from the Credit Union National Association (CUNA) about how much consumers save using a credit union rather than a bank. It also cites CUNA’s online credit union locator at creditunion.coop and CU Infosight’s findacreditunion.com.

It provides several favorable quotes and anecdotes about credit unions. “The average consumer does much better at a credit union than a bank,” said Ed Mierzwinski, consumer program director at U.S. Public Interest Research Group. Curtis Arnold, founder of CardRatings.com, a credit card information website, said, “I’m a big fan [of credit unions]. Unlike a lot of banks, most credit unions don’t try to cross-sell you products you don’t really want.”

The article also addresses the credit unions’ interest in raising the member business lending cap, discusses credit unions’ “can-do attitude,” and suggests checking for CO-OP Network membership to access surcharge-free ATMs.

In Consumer Reports’ July issue, “When to Bail on Your Bank” discusses the “Move Your Money” campaign to get consumers to switch from big banks to smaller institutions, including credit unions.

While big banks may have better online banking, “there are great deals at local banks and especially at credit unions,” said the article. It cites the benefits of better card rates, higher yields on savings and low rate loans, and it links to both creditunion.coop and findacreditunion.com.