When you walk in the lobby, you might not immediately notice a difference. Both have a vault in the back, a teller counter, drive-ups, and account personnel. The service listing may be very similar. You can make deposits, apply for loans, and obtain cash. But look closer, dig a little deeper, and very real differences emerge between a credit union and your average bank.
A credit union is a not-for-profit financial cooperative whose primary mission is to offer services that meet the needs of its members. A credit union's success is judged solely by it ability to return value to those who own it - the members. This value may take the form of higher rates on savings, lower rates on loans, lower fees and new services.
This value is also delivered with the mindset that it is the members who own the credit union and they should be treated as such.
A bank is a for-profit financial corporation whose purpose is to generate profits on the investment of its stockholders. A bank's success is judged solely by its ability to return a profit on this investment to stockholders.
Now that's a big difference. But there is more.
Credit unions are governed by volunteer boards of directors who are elected from within the credit union membership under a one member, one vote policy. The boards of directors at a bank are typically the largest stockholders whose interest in serving is making sure their investment performs well. They are financially compensated for their involvement.
Since credit unions are limited to serving members that share a common bond, they are in almost all cases locally owned. Chances are, if you are a bank customer, the revenues generated by use of their services are sent out of the area and most likely out of state.
It is the people helping people philosophy that has always set credit unions apart from other financial institutions. The slogan used by credit unions in the Great Depression era of the 1930's still holds true today, "Not for Profit, Not for Charity, But For Service".
