"Many financial institutions "reduce" payments by extending the term of the loan thereby "adjusting" the interest rate, or moving a certain payments to the back end of the loan, or allowing interest-only payments for a specified time period."
Those heartless bastards! They should offer 100% loan forgiveness! And give the deploying member $100,000!
No one said that this is a free ride. It's designed to help the deploying military member at a time when money is usually a LOT tighter.
Last time the government shut down (December 1995 through January 1996) it impacted military pay during the major holidays. Banks were bitching about how it was going to impact their bottom lines.
Credit unions like Navy Federal and Pen Fed were lining up low-cost emergency loans (on the order of 1 to 3%, IIRC, or below then lending rates) with very liberal pay back periods, increasing grace periods, dropping interest rates on outstanding loans.
In essence, they were doing every damned thing they could to help military members and their families have a good holiday season without having to worry about going completely insolvent, and ended up taking a bottom line hit.
But know what? That's what credit unions are supposed to do during periods of financial stress like that. Think banks would do that? It's my understanding that during the 1995-1996 government shutdown quite a few banks found inventive new ways to quit lending.
"CUs, being non-profit, have a thinner margin to work with."
First, credut unions are NOT non-profit, they are not-for-profit. There are critical differences. Non-profits are charities and things like that that rely on donations. Not-for-profits, like credit unions, CAN generate profits from their services, but those profits are retained by the organization and returned to members in the form of lower loan rates and higher savings rates.
My Pennsylvania CU, PSECU, recently did a member return of profits in the form of a year-end payment based on a number of factors.
Out of the blue, I got this e-mail: "PSECU had a financially strong 2012, and because we are member-owned, we are returning $10 million to our membership."
My share was a bit over $20 (it was based on level of service and activity). Some of my friends got a lot more.
I don't recall hearing of a bank doing that anytime... ever.
Second, no, not necessarily. Unlike banks, credit unions aren't paying their CEO/members of the boards of directors $127,928,296,296,283,291,908,872,362,823 in annual salary, benefits, golden parachutes, hookers, blow, and pop tarts.
I mean holy hell, Brian Moynihan, CEO of Bank of America, is making 12 million a year, and probably get a bonus for every indigent widow and orphan he can screw out of their life savings.
You have to remember, too, that not
If you absolutely need to do business with a bank, do yourself a favor and find a locally owned community bank. 99.999999 times out of 100 they're FAR better than one of the megacorporate banks.
