How Are Credit Unions Different From Banks?

Because of our non-profit status, credit unions are able to consistently offer the best rates on savings and loans in the financial services industry. Credit unions also come out on top of banks when consumers are surveyed on customer service and trustworthiness.

An all-volunteer board of directors, who are elected from the credit union membership, governs credit unions. Banks have paid board of directors. This helps keep credit union’s overhead low, enabling better rates to be offered to consumers.

Banks are owned by groups of stockholders concerned about profits. Credit unions are owned by the individual members of the credit union, who each have one vote regardless of how much money they have at the credit union.

What differentiates credit unions most is their guiding philosophy of “people helping people.” America’s credit unions truly believe that “people are worth more than money.”

Top Ten Facts About Credit Unions

1.      Credit unions are not-for-profit, cooperative financial institutions, owned and controlled by the people who use its services.

2.      There are approximately 12,000 credit unions in the United States with over 75 million members. There are 320 credit unions in New Jersey with over one million members.

3.      The National Credit Union Share Insurance Fund, which insures all federal and most state credit unions, has the highest reserve ration for  any government insurance fund and is funded solely by credit unions, not taxpayers.

4.      The average credit union is small, just $23 million in assets – less than a tenth the size of the average bank. The entire credit union movement has about $330 billion in assets, less than the single largest U.S. banking company (Chase/Chemical).

5.      Credit unions are the embodiment of democracy…each member has one vote, no matter how much money they have deposited with the credit union.

6.      An American Banker/Gallup survey shows that consumers give credit unions the highest ranking in customer satisfaction of any financial services organization. This marks the 5th straight year credit unions have led the survey.

7.      An American Banker/Gallup survey shows that consumers give credit unions higher ratings than banks on trustworthiness.

8.      According to a survey conducted by the Consumer Federation of America and the Credit Union National Association, credit unions charge fewer fees and lower fees than banks.

9.      While banks argue that credit unions enjoy a competitive advantage because of their tax-exempt status, Consumer Action – a national consumer education and advocacy group – found that banks receive far greater benefits than credit unions, including significant tax advantages and numerous additional federal subsidies.

10.  Credit unions raised more than $3 million in 1998 in their “Credit Unions for Kids” program for local children’s hospitals affiliated with    the Children’s Miracle Network. Every dollar raised goes towards children in a credit union’s own community.