Reports Show Credit Unions Well Ahead of Banks in Consumer Trust & Rates

ALBANY, NY (02/19/2010)(readMedia)-- Recent reports released by Forrester Research, Inc., the Chicago Booth/Kellogg School Financial Trust Index and DATATRAC, Inc. show credit unions well ahead of banks in both customer trust and rates.

In Forrester Research's 9th annual Customer Advocacy study, 70 percent of credit union members surveyed said their financial institution puts their interests first. The closest ranking institution was a financial services company with a 64 percent approval rating. The "big banks" (Bank of America, Chase, Capital One, TD/Commerce, Fifth Third, Citibank and HSBC) filled the study's bottom seven slots.

Forrester surved of 4,500 consumers, asking if they agreed with the statement: "My financial provider does what's best for me, not just its own bottom line," and ranked 34 financial firms on customer advocacy. The results were featured in a story that appeared on the New York Times' website.

Credit unions came out ahead of banks in the Chicago/Kellogg School Financial Trust Index as well, posting a 58-percent approval rating, compared to 31 percent for national banks and 53 percent for local banks. The study was based on phone surveys conducted by Science Research Solutions to consumers in the United States.

Study co-author Paola Sapienza (Kellogg School of Management at Northwestern University) noted that consumers put most of their trust in credit unions, "consistent with academic evidence that local [institutions] have more transparency, fewer hidden fees and better customer service compared to national banks."

Credit unions bested banks again when it came to rates. According to DATATRAC's year-end 2009 figures, credit unions posted more favorable rates for consumers than banks. In fact, they posted more favorable rates than banks in 21 of the 23 loan and savings categories, which included adjustable rate mortgages and two fixed rated mortgage products (15- and 30-year loans). DATATRAC tracks rates charged and paid by credit unions and banks.

"In recent months, a variety of publications and organizations have been urging consumers to ditch their 'big banks' in favor of credit unions or community banks," said William J. Mellin, president/CEO of the Credit Union Association of New York. "These and other similar studies confirm credit unions' member-owner operating model and emphasis on customer service and I'm confident that more and more consumers will soon be jumping on the credit union bandwagon."

The Credit Union Association of New York has served as the trade association for the state's credit unions for 92 years. New York credit unions have assets of more than $48 billion and 4.3 million members. To learn more about the Association, visit www.cuany.org.

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