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The difference between credit unions and banks isn't in the products and services they offer; it's in the way they operate and, most of all, who they operate to serve. Credit unions exist solely to serve their members. Everything credit unions do is in the best interests of their members. This chart shows everything that distinguishes the two financial institutions from one another.

Banks Credit Unions

Generate profit for stockholders. Make decisions based on what will give stockholders more profit.

Not for profit, not for charity, but for service. Without "profit motive," make decisions based on what's best for members.

Commercial businesses. Offer services to make a profit.

Financial cooperatives. Members pool their savings to provide low-cost loans and low-fee services to each other.

People who buy stock in the bank own shares of the business.

Each member is an equal owner.

Serve customers from the general public. Anyone can use a bank.

Exist solely to serve their members. A person must be within the credit union's field of membership, as defined by their charter, in order to join.

The Board of Directors are paid a salary. Daily operations are performed by a paid staff.

Unpaid volunteers from the membership serve on the Board of Directors and guide the credit union. Daily operations are performed by a paid staff.

Only people who own stock can vote for the Board of Directors. The customers who use the bank don't have a say.

As owners, members elect fellow members to serve on the Board of Directors.

Income is returned to the stockholders in the form of higher dividends on their shares of stock.

Income is returned to members in the forms of better savings rates, lower loan rates, and low or no fees for services.

Like other for-profit businesses, banks must pay taxes to the government.

Like other not-for-profit institutions, credit unions are exempt from paying federal income tax.

Deposits are federally insured up to $250,000 by the FDIC, a government agency.

Deposits are federally insured up to $250,000 by the National Credit Union Administration, a government agency. The NCUA's insurance fund is the healthiest of all federal deposit insurance funds.

 

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© 2014 Allegacy Federal Credit Union
Allegacy is federally insured by the NCUA
Equal Housing Lender NCUA