How credit unions, banks differ Why are people shifting to credit unions?
Six Southwest Virginia credit unions that advertise together give this answer: CreditUnionsAreBetter.com. It’s the Web site of a promotional campaign that takes a dig at banks by declaring credit unions stand for “People Over Profit.” The Web report emphasizes that credit unions tend to beat banks on fees and interest rates. For instance, the National Credit Union Administration reported that U.S. credit unions charged an average of 5.25 percent for a four-year new car loan this past summer, while banks charged an average of 6.62 percent. Banks offered better rates for mortgage loans. But credit unions did better in all but four of 23 head-to-head rate comparisons in the latest report from Datatrac Inc., dated June 26. There is consensus about why this is the case. Because credit unions have been given nonprofit financial status by the government, they don’t pay federal income taxes as banks do (while they do fork over payroll and real estate taxes). Operating within a lower cost struc
