I love credit unions. I mean, really love them. In fact, I didn’t know how much I loved them until I realized how much I didn’t miss my bank. I’ve been a credit union person since 2011, and there’s no turning back. Now, lucky me gets to spend my days spreading the credit union message and sharing how credit unions (particularly CVCU) are the best option out there.
In my gallivanting around town sharing the happy news, I sometimes (umm, all the time) come across people who don’t really know that credit unions and banks are different. Occasionally, I even come across people who think credit unions are somehow related to credit bureaus. Unfortunately, the name “credit union” isn’t entirely clear about our line of business, and unfortunately, our industry hasn’t done the best job educating the public on the difference. So, I’m clearing the air with this series on what the big stinking deal is about credit unions. Why are we so good? What’s the difference?
Lesson One: Member-Ownership
Banks are owned by stockholders, and they have customers.
Credit unions are owned by their members (account-holders).
At any institution, the owners make decisions that provide the maximum benefit to themselves. This is a good thing. Otherwise, there would be no incentive for any business to exist.
The problem at a bank, however, is that the bank isn’t necessarily owned by customers. The owners (stockholders) are motivated to make profit from their shares, but what is profitable may not be in the best interest of the customer.
At a credit union, the owners are the members. Members’ shares (their accounts) are their portion of ownership. So, member-owners are actually acting in the best interest of themselves when they do owner-like things, such as voting for the Board of Directors.
What’s the Big Stinking Deal?
Bottom line? Member-ownership changes how you are treated. The employees of a credit union realize that they are serving people who have influence and power. You’d put your best foot forward when your boss walked in the room too, wouldn’t you?
This says it all.