Credit Unions vs. Banks



Year after year, research shows that consumers are much more satisfied with credit unions than with banks. It's no wonder that the banking industry continues its campaign of credit union bashing. Here are some of the differences between credit unions and banks.

Credit Unions	Banks
Have members not customers. Each person who has an account in a credit union becomes a member. Meaning - credit unions are member-owned. Each member is an owner of the credit union.	Can serve anyone in the general public. Banks have customers who have no voice in how the operation of the bank. Banks are owned by small groups of investors who expect a certain return on their investment.
Democratically controlled. They are run by a volunteer board of directors elected by and from the membership. Each member has one vote in electing board members and certain committee members can run for election to the board or committees.	Only investors have voting privileges. Customers don't have voting rights, cannot be elected to the board, and have no authority in the overall governance of the bank.
Not-for-profit. This doesn't mean that they do not or should not make a profit; after expenses are paid and reserves are set aside, surplus earnings are returned to members in the forms of higher dividends, lower loan rates and free or low-cost services.	Only investors receive a share of the profits.
Federally chartered and many state-chartered credit unions are insured by the National Credit Union Share Insurance Fund (NCUSIF), which is managed by the National Credit Union Administration, and agency of the federal government. As a federal deposit insurance fund, the NCUSIF is backed by the full faith and credit of the U.S. government. The NCUSIF is the only deposit insurance fund that operates on a pay-as-you-go system, preventing the accumulation of annual losses. The NCUSIF has never had to use taxpayers' money.	Banks are insured by the Federal Deposit Insurance Corporation (FDIC). Part of this fund, which covers savings and loans, had to be bailed out by using billions of dollars of taxpayers' money. The FDIC is not operated on a pay-as-you-go system.
Supported by a network of credit unions, state credit union leagues, a national trade association (CUNA) and a worldwide credit union organization (WOCCU). They share ideas, information and resources.	Most banks belong to state and national organizations. However, banks usually are reluctant to share ideas, information and resources with each other.