Understanding Credit Unions
Credit unions are among the most stable institutions in America. In fact, in the entire history of American credit unions, taxpayer funds have never been used to bail out a credit union.
If you like the idea of participating in a cooperative effort, joining a credit union can pay off in not only customer service and better rates, but in the community you call home.
At first glance, banks and credit unions may seem very similar. They both offer savings and checking accounts, loans, mortgages, online banking and bill payment, mobile banking, convenient ATM access and more. The truth is, however, these two types of financial institutions couldn’t be more different.
What are the core differences?
|CREDIT UNIONS||COMMUNITY AND NATIONAL BANKS|
|Depositors are called members. Each member is an owner of the credit union.||Depositors are called customers. Customers have no ownership interest. Banks are owned by investors who may or may not be customers.|
|Credit unions are not-for-profit financial cooperatives whose earnings are paid back to members in the form of higher savings rates and lower loan rates.||Banks are for-profit corporations with declared earnings paid to stockholders only.|
|Taxpayer funds have never been used to bail out a credit union.||The Savings & Loan bailout in the 1980s, as well as the more recent bank bailouts, used taxpayer dollars.|
|The cooperative spirit of credit unions allow them to share resources to bring convenience and savings to its members. CO-OP Shared Branch Network is one example of this cooperation.||Competition between banks prohibits a sharing of resources.
|Credit union deposits are federally insured up to $250,000 by the NCUA, a branch of the federal government.
||Bank deposits are insured up to $250,000 by the FDIC, a branch of the federal government.