Things I Like : Banks vs. Credit Unions

Banks vs. Credit Unions Flyer

By Valentina Torres

Credit Union is a non-profit money cooperative whose members can borrow from pooled deposits at low interest rates.

Bank is a financial intermediary that accepts deposits an channels deposits into lending activities either by directly by loaning or indirectly through capital markets.

At credit unions, depositors are called members. Each member is an owner of the credit union.
Since credit union members are owners, each member, regardless of how much money they have on deposit, has one vote in electing board members. Members can also run for election to the board.
Credit unions are not-for-profit financial cooperatives, whose earnings are paid back to members in the form of higher savings rates and lower loan rates.
Credit unions focus on consumer loans and member savings, as well as services needed by the membership.

Banks’ depositors are called customers. Customers have no ownership interest in the institution. Banks are owned by investors who may or may not be depositors.
Banks are owned and controlled by stockholders, whose number of votes depend upon number of shares owned. Customers don’t have voting rights, cannot be elected to the board, and have no say in how their bank is operated. Directors are selected by current directors or by large block stock acquisition.
Banks are for-profit corporations, with declared earnings paid to stockholders only.
Banks focus on commercial loans and accounts and services that generate significant income.