CU Difference
Credit Unions and banks offer the same types of consumer products and services, but that is the only similarity between them. Here are the differences:
| BANKS: | CREDIT UNIONS: |
| Profits go to stockholders so decisions are based on what is best for stockholders. | Operate not for profit, not for charity, but for service so decisions are based on what is best for members. |
| As a commercial business, services are offered to make a profit. | As a cooperative, members pool their savings to provide low-cost loans and low-fee services to each other. |
| Owned by stockholders that purchase shares of bank stock. | Each member is an equal owner of the credit union. |
| Serves the general public. | Serves only the members that have joined. |
| Board of Directors are not necessarily owners and are paid a salary. | Board of Directors are unpaid volunteer members. |
| Stockholders, not the customers, elect the Board. | Members elect fellow members for the board. |
| Income is returned to the stockholders, not the customers, in the form of higher dividends on stocks. | Income is returned to the members in the form of higher savings rates, lower loan rates, and lower or no fees for services. |
| As a for-profit business, banks pay government taxes. | As a non-profit organization, credit unions are exempt from paying government taxes. |
| Deposits are federally insured by the FDIC. | Deposits are federally insured by the NCUSIF, the healthiest federal deposit insurance fund. |
