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Finance 101

The Credit Union Advantage

Posted on September 01, 2015 by Jake Ward

Credit unions are not "just like banks." While credit unions and banks offer a full range of financial products, structurally they are completely different. Luckily, that difference translates into a wealth of benefits to credit union Members and their communities.

Here's how:

  • CREDIT UNIONS are not-for-profit cooperatives. BANKS are for-profit corporations.
  • CREDIT UNIONS are member-service driven. BANKS are profit driven.
  • CREDIT UNIONS return profits to their members. BANKS divide profits among their shareholders.
  • CREDIT UNIONS have members – each of whom are also owners of the institution. BANKS have customers who have no influence on bank operations.
  • Most CREDIT UNIONS are locally operated in the communities they serve. Many, if not most, BANKS are managed outside of the communities they serve
  • CREDIT UNION members all have one vote to annually elect their Board of Directors. BANK customers are not privileged to vote (unless they are also a shareholder).
  • Most CREDIT UNIONS have volunteer Boards made up of (and representing) its members. BANK Board members are highly compensated and represent the interests of anonymous shareholders.
  • CREDIT UNIONS, under federal and state laws, may only offer membership to individuals who belong to a select group or geography. BANKS are not restricted on who they can serve.
  • Just as banks are overseen by the Federal Deposit Insurance Corporation (FDIC), federally chartered and insured credit unions are overseen by the National Credit Union Administration (NCUA). Just like FDIC, NCUA also provides credit union savings insurance of at least $250,000 through the National Credit Union Share Insurance Fund (NCUSIF), a savings insurance program backed by the full faith and credit of the United States Government.

At R.I.A. Federal Credit Union, we are very proud of how well we serve our members and our communities. This year, as we celebrate our 80th Anniversary, we’ve been celebrating the “Power of 80” with eight significant community initiatives. With your help, we’ve provided thousands of dollars for area non-profit organizations and we’re committed to continuing to do this for years to come!

Keep up with how R.I.A. FCU is giving back to our communities and keep abreast of what’s happening at the credit union.