About Credit Unions
Credit Unions are financial institutions organized by people who have a common bond, whether through employment, a school, a church, a community, or some other organization. Credit Unions differ from banks in many ways, most importantly that they are owned by their customers, known as members, who buy shares when they join.
Credit Unions are run by a member-elected volunteer Board of Directors. Revenues generated are used to provide member benefits, including new or improved services and competitive rates on loans and deposits, or for reserves to insure financial strength.
Banks vs. Credit Unions |
| Banks
| Credit Unions |
|
Owned by shareholders |
Owned by members |
|
Loyalty to shareholders |
Loyalty to members |
|
Profit-driven |
Member-driven |
|
Voting power in accordance to shares held |
Voting power held by all members equally |
|
General products for the general public |
Tailored products especially for members and their families |
|
Generally lower rates of return on deposits |
Generally higher rates of return on deposits |
|
Investments managed internally -- to benefit the financial institution |
Investments not managed internally -- to benefit the member |
|
No learning opportunities |
Free learning opportunities through seminars and on-site events |
|
Fees generate a high percentage of income for the firm |
Fees generate a low percentage of income for the Credit Union |
|
Lower level of service |
Higher level of service |
|
Loss leaders of incur fee penalties |
No loss leaders |
|
General all-purpose service |
Private banking service |
|
Obligations to Wall Street |
No obligations to Wall Street |