NEW YORK (9/4/14)--The Wall Street Journal cited the lending strength of credit unions in two separate articles Wednesday.
|The Wall Street Journal compared the rate of loan growth between banks and credit unions in a Wednesday article. (The Wall Street Journal Graphic)|
One article highlighted the National Credit Union Administration's announcement Tuesday that federally insured credit unions saw the highest year-over-year increase in loan growth since 2006. The article compared credit unions favorably with their for-profit competitors.
"Loan growth at U.S. credit unions was at 9.8% in the second quarter, according to data released Tuesday by the NCUA, the government regulator for credit unions," reporter Saabira Chaudhuri wrote. "That easily outstripped the 4.9% increase in loans outstanding at banks reported last week by the Federal Deposit Insurance Corp."
The article included a quote from psychologist Donald Ulissa, who joined Lake Trust CU, with $1.6 billion in assets, Brighton, Mich., about two years ago after getting a $60 service charge at Comerica Inc., with whom he had a business account. "They have real people at Lake Trust," compared with more automated service at Comerica, Ulissa told The Wall Street Journal.
Banks, meanwhile, continue to argue that credit unions are straying from their original mission of serving people of modest means. But national credit union leaders aren't taking the bait. "We reject the idea that credit unions were set up to serve low-income people," Bill Hampel, interim president/CEO of the Credit Union National Association, told the Journal. The act governing credit unions was written during the Great Depression "when almost everybody was poor," he said.
In the second article that appeared in The Wall Street Journal Wednesday, also written by Chaudhuri, the headline spoke volumes: "For a Cheaper Auto Loan, Try a Credit Union."
Citing data compiled for The Wall Street Journal by research firm SNL Financial, the article began: "Credit unions offer consumers a better deal than banks on average across a wide variety of deposit and loan products. They are particularly competitive on auto loans, with the average credit-union rates on eight types of auto loans beating the comparable bank figures by an average of two percentage points."
The article cited credit unions' superior savings rates, then noted that credit unions charge up to 2.18 percentage points less than banks do, on average, on auto loans for new cars and up to 2.57 percentage points less on auto loans for used cars. They also charge lower rates on credit cards and lower rates on a variety of fixed- and adjustable-rate mortgages.