1. They are member-owned. (Other member-owned coops pay taxes on non-disbursed earnings)
2. They can't issue stock. (Lots of companies--many LLCs, sole proprietorships, S Corporations, etc. -- do not issue stock but still pay income taxes.
3. CUs (allegedly) provide better service (tax exemptions are not awarded to companies that provide the best service).
Credit Unions usually have better rates on loans, savings accounts and CDs.
Greedy banks are out to squeeze every dime out they can from their customers and make obscene profits. They think Credit Unions have an unfair advantage because of their non-profit tax-exempt status. If banks were not so greedy and corrupt and treated their cutomers right, they would not need to fear competition!