Credit Unions Aren’t Banks

When you walk into our lobby or call our virtual branch, what makes Caribe Federal Credit Union different from a bank isn’t immediately apparent. The two financial institutions may offer similar products and services. But there the similarities stop. Crucial differences exist–in ownership, in cost of borrowing money, and in use of services.

You own your credit union. Credit unions are member-owned nonprofit financial cooperatives dedicated to improving members’ lives. More than 89 million members own 8,600 U.S. credit unions with combined assets of $732 billion. Stockholders own banks (with combined assets of $10 trillion). Banks make money for stockholders, not for customers.

Credit unions are the only democratically controlled financial institutions in the United States. You and other members elect a volunteer board of directors to oversee the credit union. The manager or president/chief executive officer reports to this board. Bank directors, however, are paid and legally bound to make decisions that benefit stockholders, not customers.

Credit unions have the best rates. Credit unions price loans, pay dividends on funds you’ve deposited, and charge fees to provide you with high-quality, low-cost services. Banks price products and services to make a profit.

Credit union loan rates also are better. The average credit card interest rate is about three percentage points better at credit unions vs. banks. And credit union used car auto loans average more than one and one-half percentage points less than banks’ auto loan rates. Credit unions make consumer loans and some member business loans. Banks offer consumer loans, but really emphasize business loans.

Credit unions educate members about money matters. They provide publications such as this newsletter to keep you advised of rates, loan sales, and financial trends that affect you. Caribe Federal Credit Union stresses education, providing materials and holding seminars on financial planning, car, and home buying to help you make informed buying decisions. Many banks simply advertise their rates and sell their services.

Because you’re an owner of Caribe Federal Credit Union, you have a say in how we do business. Let us now how you think we’re doing, and what services you want at your credit union.

Copyright 2012 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.