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A $6.3 Billion Benefit to Members
Credit union members benefit from higher levels of service and participation in the governance of their financial cooperatives. But members also benefit financially to the tune of about $6.3 billion a year--that's $76 per member or $149 a year per member household, according to data from the Credit Union National Association (CUNA), the Bank Administration Institute, and the Federal Reserve.
That's the sum of the additional fees and loan interest and lower savings return that credit union members would have paid and earned had they conducted all their business with banks instead of credit unions in 2002. Those numbers break down this way:
- Lower fees = $2 billion
- Lower interest paid on loans = $2.3 billion
- Higher earnings on shares and deposits = $2 billion
While bankers complain that credit unions don't pay federal income taxes, they conveniently ignore the fact that credit union members pay income taxes on the additional dividends that they earn on their higher-earning credit union savings accounts, according to CUNA Chief Economist Bill Hampel. "The additional federal income taxes credit union members paid in 2002 on their higher dividends and interest from credit unions amounted to about $480 million."
Hampel also points out that even those that don't belong to a credit union benefit from the existence of credit unions. "Attractive pricing from credit unions pressures other financial institutions to provide attractive rates and services."
