N.C. Study Finds CUs Saved Consumers $529 Million
GREENSBORO, N.C. -- North Carolina credit unions have saved consumers $529 million in a single year as a result of lower fees and loan costs plus higher deposit rates, according to an updated research study produced by a University of Alabama economist and former finance adviser at the Federal Reserve Bank of Atlanta.
The study, released by the North Carolina Credit Union League, is an update of a similar three-year-old research report also done by William E. Jackson III, professor of finance and management at the Culverhouse College of Commerce at the University of Alabama, Birmingham. Jackson also holds the Smith Foundation Chair of Business Integrity at the Alabama college.
In the study, titled the Benefits of Credit Unions to NC Consumers of Financial Services, CU membership even benefited customers of banks "since the presence of credit unions" turned into a $77 million savings.
Based on 2006 data, Jackson noted that the average rate differential on a used car loan was 2.65%. "That means a 36-month used car loan for $15,000 saved the member more than $400," said John Radebaugh, president/CEO of the North Carolina league.
The average CU money market account, said the study, paid 1.67% more than the average bank money market account in the state. Also, CU members saved $123 million on checking account fees and $34 million on mortgage closing costs, according to the research.
Jackson also found the value of CU competition on bank loans was $30 million or 10 basis points for individuals and ATM network savings for nonmembers was $46 million.
Prior to his University of Alabama appointments, Jackson was an economist and associate policy adviser at the Atlanta Fed, where he conducted original research on financial markets and institutions. He was also an adviser to the bank on monetary policy. Over the years his research has focused on corporate governance, macroeconomics and entrepreneurial finance.