Media Stereotypes Lead to Lack of Objectivity

The national media appears to have bought into a stereotype that credit unions are the best deal for consumers.

Here are some examples of the lack of objectivity from these consumer reporters. Farnoosh Torabi for moneyeatch.com wrote “I’ve always been a huge advocate of credit unions.” Tim Chen, a reporter for The Christian Science Monitor, wrote “given their reputation for great customer service and consumer-friendly policies, I highly recommend you ditch your national bank for a credit union.”

But stereotypes are standardized and simplified conceptions, which are based on some prior assumptions, and as a result may cause a person to make a poor financial decision.

If people only believe that they can only get favorable treatment or deals from credit unions, then they will miss opportunities offered by other financial institutions.

In fact, there are taxpaying banks that are offering better deals to consumers than credit unions.

For example, a friend recently bought a pre-owned car. When this friend went to finance the purchase, the best rate was from a bank, not credit unions – even with their tax advantage.

So while NCUA Board Member Michael Fryzel in a recent speech stated that credit unions leave money in the consumers’ pockets, NCUA also stated that credit unions with higher net worth ratios have paid for the higher net worth ratios with reduced services and less favorable rates [Federal Register (Volume 75, Number 248) December 28, 2010, p. 81384].

Moreover, it seems in the case of my friend, it was the bank that left more money in his wallet, not a credit union.

What this points out is that it pays to shop around. Just because a financial institution has the word “credit union” on its door does not mean that it is the best deal for consumers.

It is time that the national media removes their credit union blinders and stop being a credit union pom pom squad.