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Credit unions are not-for-profit cooperatives, owned by their members who save and borrow there. They exist solely to serve those members, with no stockholders or bank holding companies to enrich.
Credit unions are owned by their members. In addition to being an owner, each credit union member, regardless of how much he or she has on deposit, has an equal vote in elections. Credit unions are democracy in action!
Credit unions are tax-exempt. The benefits of this tax-exempt status as a not-for-profit cooperative are returned to members in the form of higher rates on savings, lower fees and lower loan rates.
Banks are for-profit institutions run by officers and directors who are legally bound to make decisions in the best interest of the stockholders.
Directors of banks customarily receive director fees, per diem, stock options and other perks. Members of credit union boards and committees are truly volunteers. They receive no compensation for their service and commitment. Banks are run by officers and directors chosen by owners, stockholders and bank holding companies, many of which are located out-of-state.
Credit unions and banks both exist to provide financial services. However, their similarities end there and the differences that make credit unions unique begin to show.
July 2004
Central Texas Credit Unions Coop
July 2004
Cuna.org - Lawmakers thanked for response to FDIC tax call
| Credit Unions | Banks |
Credit unions have members, not customers. Everyone with an account has a share of ownership in the credit union. Therefore, you are actually an owner of your credit union and not just another account number. |
Banks have owners, usually a group of investors. Banks exist to make a profit for their owners. |
| Credit
unions are democracies. They are run by a volunteer board of directors
elected from the membership. Every member has a vote in how their
credit union is operated. |
Banks
are run by their investors, who have the sole voice in how things
are done. |
| Credit
unions are not-for-profit organizations. After expenses are paid and
reserves set aside, all money surpluses are returned to the members
in the form of higher dividends and lower loan interest rates. |
At
banks, only investors see a share of the profits. |
| Credit
unions serve only certain groups of members, like those working for
a particular employer or living in the same neighborhood. This specialization
allows credit unions to focus on the needs of a certain special group
of people. |
Anyone
may open an account at any bank. Customers sometimes become lost in
the shuffle or "just another number." |
| Credit
unions have definitely kept up with the times! Many credit unions
offer the same high-tech services as your local banks, like home banking,
online bill pay, online check images and online loan applications.
Even better, credit unions generally charge much lower fees for these
awesome services than do banks. |
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©2005 Credit Union Difference. All Rights Reserved. |
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