$352 Million in Direct Benefits: What Does That Mean?
February 23, 2015
February 23, 2015
When choosing a respected, independent firm to carry out an analysis of the economic impact of credit unions in Oregon and Washington, the Northwest Credit Union Association put ECONorthwest at the top of the list. Economic impact studies are right in the company’s wheelhouse, and over the years they have conducted them for various companies and industries.
But when ECONorthwest began assessing the ways that credit unions impact their economies, they found something unique. For a normal industry, ECONorthwest adds up all the things a company pays for—employment, expenses, capital investments, and a few other factors—to see the impact of that company, and then sums up all the companies in the industry to see the impact of the industry. But credit unions’ impact didn’t stop there.
“There is a key difference between this report and a standard economic impact analysis,” says ECONorthwest in the executive summary of their findings. “In credit unions’ unique not-for-profit cooperative structure, credit unions return direct benefits back to the members. That direct benefit creates another layer of economic impact.”
What Are Direct Benefits?
Credit unions have a structure that is unique among financial institutions. Instead of focusing on profits to please their shareholders, credit unions are not-for-profit, and as cooperatives they exist solely to serve the people for whom they provide financial services, their members.
This key structural difference generates tremendous value for credit union members, not least of which are the direct member benefits discovered by ECONorthwest.
CUNA, which tracks these benefits and releases quarterly updates, says that credit unions “provide financial benefits to members through lower loan rates, high savings rates, and fewer fees” than competing financial institutions.
Taken together, these savings and additional income add up. In a recent update, CUNA estimated that the average credit union household in Washington received $150 in direct benefits, and $129 in Oregon.
When ECONorthwest extrapolated this data to all the credit unions and members in Oregon and Washington, they found that credit unions generated $352 million in direct benefits for their members. More over, this money went directly into members’ pockets and back out into local communities, for a total impact of $732 million in the regional economy.
Adding direct benefits together with all the other economic impacts of Northwest credit unions, ECONorthwest found a staggering total impact on the Northwest economy of $6.8 billion dollars.
See the full executive summary and find stories of the credit union difference at http://nwcua.org/credit-union-impact.
Questions about this story? Contact James Pearson: 206.340.4790, firstname.lastname@example.org.
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