Credit Union Members See Big Savings, Report Shows
MADISON, Wis. (June 8, 2011) – Wisconsin credit unions, which are financial services cooperatives, returned more than $203 million to their members last year through reduced interest rates on loans, higher interest payments on savings, and fewer and lower fees compared with those experienced by customers of commercial banks.
The information is detailed in the recent REAL SolutionsÒ 2010 Report prepared by the Wisconsin Credit Union League and refutes claims by the Wisconsin Bankers Association seeking to cast doubt on the benefits of credit union membership.
(REAL SolutionsÒ is a statewide initiative by Wisconsin’s credit unions to help individuals of all income levels build financially strong, self-supporting families and communities though numerous outreach efforts.)
“The REAL SolutionsÒ Report affirms what credit unions have always said—consumers who choose to do business with credit unions generally receive greater benefits than customers of big for-profit banks,” said Jim Drogue, Wisconsin Credit Union League Vice President of Credit Union Development.
Credit union advocates expect data from the report to play a role in deciding the recurring controversy between the two types of financial services providers. Banking interests have succeeded in inserting a provision in the pending state budget bill that would ease conversions of member-owned credit unions into commercial banks, potentially on the votes of a small minority of a credit union’s member-owners.
A similar provision passed in the Democrat-controlled Legislature during the 2009-10 session but was vetoed by then-Governor Jim Doyle. In May, the Republican-controlled Joint Finance Committee adopted it as an amendment to its version of the budget bill.
“The Wisconsin Bankers Association’s continuing pursuit of this change has one purpose: to destroy effective competition,” said Bill Oemichen, President and CEO of Cooperative Network. “Billions of dollars in taxpayer-financed bailouts evidently weren’t enough, and struggling large banks are back asking government to help stifle competitors who give the consumer a better deal.”
A peer-reviewed study by two UW-Whitewater professors published in the journal Contemporary Economic Policy found that members of a credit union that converts to a bank are likely to end up paying higher interest on loans and to receive lower interest payments on their savings accounts.
Under current Wisconsin law a credit union considering conversion to a bank must follow a deliberate process designed to give members ample time and complete information about the proposal before they vote to approve or reject it.“Our member’s ownership interest has value, and they deserve to be informed and engaged in any institutional changes that have negative impact,” said Kevin Hauser, President and CEO of Westby Co-op Credit Union in Westby.
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