From a street view, the credit union looks just like a bank: rows of teller windows, convenient drive-through lanes and attractive lobbies. But hidden within those walls are some key differences that clearly separate credit unions from banks. Yet somehow credit unions still remain a mystery to many consumers including their own members. So we’re going to make it easier for you to explain the next time someone asks why you bank at a credit union:
What exactly is a credit union?
Credit unions are financial institutions owned and operated by members as a financial cooperative. All account holders are members, with collective total assets used for banking purposes. Credit unions are not-for-profit entities, meaning that their purpose is to service the best interests of membership rather than maximize profit margins (note that this is different from a non-profit organization). This is the biggest distinction from banks who serve to make money for their share-holders.
What is the benefit of being an owner-member?
Because we’re a financial cooperative, the money you put into the credit union gets returned to you in the form of lower loan rates, fewer fees, and better savings rates. The very nature of the credit union as a better pro-consumer choice is also reflected in a higher standard of dedicated member care as opposed to regular bank customer service — in fact, surveyed customers give credit unions a 93% “highly satisfied” rating compared to 69% for the four major banks (source: Consumer Reports).
In addition, credit unions can be more flexible if your credit report has a few blemishes. The loan process isn’t a “check off the box” interview like it would be at the Big First Global Bank; it’s a conversation. If you are experiencing a tough time financially, tell us. We will listen to your story and do everything in our power to give you access to the money you need to help achieve your financial goals.
Do they offer the same products as a bank?
Credit unions offer much more than simply depositing your paycheck and collecting interest. You can take out a loan to finance a car, a home or other items. Even if the credit union is not your primary financial institution, it can still be an option for your lending and financing needs. In fact, many people find they prefer credit unions when compared to banks thanks to generally lower rates and fees; a recent survey found credit unions offering a nearly 2% lower rate than banks (source: US News). Our motivation is to ensure you get ahead financially through affordable loans and education. We’re not about selling you the highest rate to make money.
So they are like a bank but they aren’t like a bank?
At big banks, there’s a direct line from your pocket to the pockets of the stockholders at the top, and the money doesn’t flow in your favor. The more banks can charge in fees and interest, the fatter their stockholders’ wallets grow, and the leaner yours gets. Credit unions offer a better way to bank—We don’t have stockholders expecting your money to make them more money. Instead, we have a democratically elected, VOLUNTEER board of directors comprised of member-owners like you who simply want their hard-earned money to work for them AND their fellow credit union members!
Are they convenient?
Credit unions that are connected by CO-OP share their resources with thousands of other credit unions nationwide (something that banks don’t do). Through this network, you have access to 30,000-plus ATMs without fees and 5,400 branches to make in-person transactions just like at your home branch.
We also understand the growing need for financial technology and offer convenience services such as online and mobile banking with digital pill pay and mobile deposit and so much more.
Are you happy with your membership?
Share the #CUdifference! Keep your credit union competitive in the financial market, and refer your friends and family today. Tell them how being a member has made a difference in your life.