The Credit Union Difference

What is a credit union?
A credit union is a financial cooperative organized by people who have a common bond, such as employment at a specific company or residence/employment in a certain geographical location. As members of a credit union, people pool their assets, providing funds for loans to those in need within the membership. The members own the credit union, electing directors from among the membership. The principal function of credit unions is to encourage savings and thrift and provide consumers credit at favorable interest rates.

What is the difference between a credit union and a bank?
Credit unions are not-for-profit cooperatives, owned by members who save and borrow there. They exist solely to serve those members, with no stockholders or bank holding companies to enrich.  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 also tax-exempt. The benefits of our 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.

While 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, some of which are located in other parts of the state or country.