Study Touts Benefits of NC Credit Unions $400 Million in Savings Noted.

GREENSBORO, N.C. -- An associate professor at the University of North Carolina at Chapel Hill says North Carolina consumers saved nearly $400 million in 2003 thanks to the presence of credit unions. The findings were noted in Professor William Jackson's recently published study, The Benefits of Credit Unions to North Carolina Consumers of Financial Services.

The North Carolina Credit Union League (NCCUL) commissioned the study. "We knew that our credit unions were providing a high level of service to their members, but we wanted to get a feel for the overall financial benefits," said John Radebaugh, president of NCCUL. Radebaugh added while the $400 million savings was impressive, "we think these numbers are conservative and the true impact is much larger."

Dr. Jackson's study found that credit unions, as not-for-profit financial cooperatives, saved their members more than $336 million. These savings were noted in three areas where credit union members received financial benefits, including:

--lower rates on loans;

--higher rates on deposits;

--lower fees on checking accounts and first mortgage closing costs.

In reviewing North Carolina-specific loan data, Jackson's study found that the interest rate on the average automobile loan was 3.08 percentage points lower at a credit union than a bank. According to Radebaugh, a 36-month, $15,000 automobile loan based on this rate differential meant a credit union member saved $700 in interest. "That's significant to the working men and women of North Carolina," said Radebaugh. "That money can be saved for a rainy day or put right back into our economy."

Radebaugh noted that these findings affirm that as not-for-profit financial cooperatives, credit unions fill an important role in the financial services industry. "The study shows a total savings of more than $1 million each day. Consumers are the real winners here, thanks to credit unions," he noted. Radebaugh added that as credit unions grow, "The more savings consumers will realize in the future."

Jackson also cited savings benefits to bank customers as well, noting that competition from credit unions resulted in lower loan rates at some banks. The resulting savings to bank customers totaled $25.4 million. He also said non-credit union members who used Cashpoints, the statewide no-surcharge ATM network, saved more than $34 million.

For many years, the banking industry has criticized the income tax exemption afforded credit unions by virtue of their not-for-profit cooperative status. Radebaugh says, "Consumers are clearly getting substantial benefits from the cooperative structure of credit unions, even as the banking industry enjoys record profits."

To obtain a copy of the study, please call [phone], ext. 3225, or e-mail [e-mail].

The North Carolina Credit Union League advocates for the 2.7 million people in North Carolina who choose credit unions, as well as the 136 N.C. credit unions holding $21 billion in assets. Credit unions are not-for-profit financial cooperatives that are owned and controlled by their members. Credit unions return earnings to their members in the form of lower rates on loans and higher dividend rates on savings.