NEW YORK (8/12/14)--The credit union movement received a glowing review in an edition of entrepreneur-centric Inc. magazine recently that demonstrated, once again, the advantages offered by the member-owned institutions.
Vince Passione, columnist for the magazine and founder/CEO of LendKey, a cloud-based lending operation and CUNA Strategic Services alliance provider, said in the article that when comparing banks and credit unions, there really is no comparison.
"Each of the U.S.' four largest banks is actually larger than all of the credit unions combined," said Passione in his Aug. 8 column, as banks overall hold roughly 14 times more in assets than credit unions at $14.7 trillion vs. $1.1 trillion.
Further, Passione said that while credit unions are much smaller than banks, the movement continues to gain steam, highlighting the industry's recent accomplishment of reaching 100 million memberships in the United States.
And there are a variety of reasons for the ongoing upturn in credit union growth.
"Nonprofit credit unions generally offer better savings and loan rates, and low or no fees," Passione said. "For example, as of March, the average rate on a 36-month new car loan was 2.76% at credit unions and 5.43% at banks.
"Credit unions are usually smaller operations than the big banks and are able to pass on these savings to customers."
Passione also explained how credit unions, despite their smaller size, are more stable and sound financial institutions than banks.
When the housing bubble burst, commercial banks failed at a rate nearly three times that of credit unions--at 60% to 23%--and since the recession credit unions continue to become healthier, Passione said.
To read the full column, use the link.