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Study CUs prices better than Sub-S C-corp banks
MADISON, Wis. (8/14/09)--Credit unions have better savings and loan rates than Subchapter-S banks and C corporation banks, according to a Filene Research Institute Study.
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The study, “A Comparison of Bank and Credit Union Pricing: Implications for Tax Benefits of Subchapter S Incorporation,” by Steve Swidler, Auburn University professor, examines the rate differences between banks and credit unions. Swidler found that credit union members benefit both on the deposit and loan side for almost every product category, compared to C corporation and Sub-S banks. Sub-S banks pass on few, if any, tax benefits to customers in the form of better rates. Sub-S banks set rates similar to C coporations. Banks incorporating as Sub-S eliminate federal taxes on corporate level earnings. Sub-S banks are profit-oriented, while credit unions receive a tax benefit to serve the needs of everyday people, the study said.
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