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The Credit Union Difference

The Credit Union Difference

Banks vs. Credit Unions: What's the Same?

Checking Accounts
Savings Accounts
Loans
Federally Insured
Mobile Banking
Online Banking
Network of ATMs
Insurance Products

What's the Difference?

Banks operate for profit.
Banks operate for profit. Profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates and lower loan rates.
Reduced fees, lower loan rates
Led by paid members of the board.
Banks are lead by members of the board that are paid for their services. Credit unions are lead by volunteer board members.
Led by volunteer board members.
Insured by FDIC
Both credit unions and banks are federally insured. While banks are insured by the FDIC, credit unions are insured by the NCUA.
Insured by NCUA

Other Credit Union Benefits

  • More attractive loan rates
  • Low or no fees
  • Local, personalized service
  • Community-oriented

History of Credit Unions

In the1800’s Friedrich Wilhelm Raiffeisen fathered the credit union idea to help impoverished farmers in western Germany who were ruined by drought and indebted to unscrupulous moneylenders.

The idea behind the credit union movement was simple: people could achieve a better standard of living by pooling their money and making loans to neighbors and co-workers. People helping people.

In 1900, the credit union concept crossed the Atlantic to Quebec. Alphonse Desjardins became aware of loan sharks charging outrageous interest to working class families, Desjardins responded by organizing the first credit union in North America.

During the 1920s, the U.S. credit union movement became increasingly popular. Families had more money to save and could afford products like automobiles and washing machines. They, however, needed a source of inexpensive credit to purchase these goods. The popularity of credit unions grew because commercial banks and savings institutions generally showed limited interested in offering such consumer loans.

In 2009, in the aftermath of the great recession, credit unions continued to lend to members while banks tightened their underwriting.

Today credit unions continue to grow with over 102 million credit union account holders while maintaining the original intent of people helping people.

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