In turn, they create benefits to consumers of all financial institutions. Most importantly, you have the ability to put your money where you want. Credit unions typically offer lower or no fees, higher savings rates, lower loan rates, and more personalized service. Credit unions focus on their members and return their profits to the members by giving higher savings rates and lower loan rates. No member of a federally insured credit union has ever lost any money.
Credit unions are subject to much of the same consumer regulations as other financial institutions.
In some cases, such as investments and mortgage business lending, credit unions must adhere to more strict regulations. A. Credit unions pay payroll, property and sales taxes as well as various licensing fees. By law, they are exempt from paying income tax because all monies earned after operating expenses and setting aside statutory reserves are returned to members. A. Credit unions must generate capital for operating funds by receiving deposits from members and repayment of loans made to members. This is because they don't have the ability to generate capital through the sale of stocks to shareholders.