Our Mother of Mercy Federal Credit Union

Credit Union or Bank

There are many Questions that you should ask yourself, before deciding to put your entire savings into a Credit Union or a Bank. Who are the dividends paid to? Do I have a vote in how the institution is run? Is this a Not For Profit or For Profit institution? We have outlined some of the differences between the two for you.

 

Credit Unions

Banks

Not-for Profit financial cooperatives

For profit corporations

Credit Unions are tax-exempt because they are not-for-profit cooperatives owned by taxpaying depositors

Banks pay taxes on profits they distribute to outside stockholders

Credit Union Rates are capped at 18%

Banks lending rates are unregulated

Organized to serve a specified field of membership

Open to the public

Owned by their members Democratically controlled; one member – one vote

Owned and controlled by outside stockholders

Focus on consumer loans and member savings

Focus is on commercial loans and accounts

Dividends are paid to members

Dividends are paid to the stockholders

Voluntary directors and committees. Voluntary reflects the diversity of membership

Paid directors. Board members do not necessarily reflect the diversity of their customer base

Known for offering more favorable rates and services

Known for higher fees and less favorable rates

Cooperation between Credit Unions

Competition between banks

Insured to $250,000 by NCUA/NCUSIF

Insured to $100,000 by FDIC/BIF

Insured fund is self insured – has never caused a loss to the taxpayer

S&L bailout used BIF taxpayer dollars

Motivated to maximize service

Motivate to maximize profits.

 

 

 

 

 

 


Credit Bureau of Greater Houston
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