Why Credit Unions Aren't Banks
When you walk into our lobby, or call a loan officer, what makes us different from
a bank isn't immediately apparent. The two financial institutions may offer similar
products and services. But there the similarities stop. Crucial differences exist—in
ownership, in cost of borrowing money, and in use of services.
- You own your credit union. Credit unions are member-owned nonprofit
financial cooperatives dedicated to improving members' lives. More than 89 million
members own 8,600 U.S. credit unions with combined assets of $732 billion. Stockholders
own banks (with combined assets of $10 trillion). Banks make money for stockholders,
not for customers.
- Credit unions are the only democratically controlled financial institutions
in the United States. You and other members elect a volunteer board of
directors to oversee the credit union. The president/chief executive officer reports
to this board. Bank directors, however, are paid and legally bound to make decisions
that benefit stockholders, not customers.
- Credit unions have the best rates. Credit unions price loans, pay
interest on funds you've deposited, and charge fees to provide you with high-quality,
low-cost services. Banks price products and services to make a profit. The average
credit card interest rate is about three percentage points better at credit unions
vs. banks. And credit union used car auto loans average more than one and one-half
percentage points less than banks' auto loan rates. Credit unions make consumer
loans and some member business loans. Banks offer consumer loans, but really emphasize
- Credit unions educate members about money matters. We stress education,
providing materials and holding seminars on financial matters to help you make informed
decisions. Many banks simply advertise their rates and sell their services.
Because you're an owner of the Credit Union, you have a say in how we do business.
Let us know how you think we're doing
and what services you want at your Credit Union.