Why Credit Unions Aren't Banks
When you walk into the credit union lobby, or call a loan officer, what makes Pacific Advantage 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. Seventy-eight million members own more than 11,000 U.S. credit unions with combined assets of more than $430 billion. Stockholders own banks (with combined assets of more than $5 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 best rates.
Credit unions price loans, pay interest 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.
You earn more on your savings--in some cases up to one percentage point--at the credit union.
Credit union loan rates also are better. The average credit card interest rate is four percentage points better at credit unions vs. banks. And credit union auto loans average almost one and one-half percentage points less than banks' auto loan rates. Credit unions make consumer loans. Banks offer consumer loans, but really emphasize business loans.
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*Credit unions educate members about money matters.
Credit unions routinely inform and counsel members about financial matters. They provide publications such as this newsletter to keep you advised of rates, loan sales, and financial trends that affect you. Pacific Advantage 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 Pacific Advantage, you have a say in how we do business. Let your elected board members and professional staff know how we're doing, and what services you want at your credit union.
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