Credit unions are great alternativesPublished 9:36pm Thursday, September 5, 2013
By Nathan Rice
Fresh out of college, I was happy to land my first “real” job and begin a career. I always enjoyed working with money, so the position of teller seemed to be a perfect fit.
I was entering the world of banking, but my new employer was not a bank. They held the title of Federal Credit Union. At the time, I didn’t really know the difference between a credit union and a bank. I just knew they were willing to hire me, and I was happy to come aboard.
It has been more than a decade since I accepted that first position, and I have grown to understand the differences between a bank and a credit union. Now I now greatly appreciate the purpose and mission of credit unions.
Banks, like all for-profit business, exist to serve the interests of their owners or shareholders. Their goal is to increase profit for their owners or provide increased dividends for their shareholders. As America has been largely based on capitalism, there is nothing wrong with making a profit or growing a business.
When it comes to banking, however, I believe a credit union provides a better alternative.
Credit unions are not-for-profit financial cooperatives. This means the goal of a credit union is not profit but service. The old slogan “Not for profit, not for charity, but for service” still sums up the goal of credit unions.
Because credit unions are not profit-driven they can concentrate on providing banking products and services with lower costs, while offering low loan rates and higher rates of returns.
Credit unions can do this because, unlike banks, the owners won’t be asking why profits aren’t higher this quarter than they were last quarter.
It’s not accurate, however, to say that credit unions don’t have owners who are interested in their well being. In a credit union, every account holder is an owner. When someone joins a credit union, he or she becomes an owner, with the rights to vote at annual meetings and elect the board of directors.
Try doing that at your bank!
Savings accounts have often been associated with credit unions, but over the years credit unions have grown as consumers have learned the benefits of joining and owning their own local financial institution.
Credit unions now offer most, if not all, of the products that most big banks offer. Checking accounts with debit cards, online banking, mobile apps, billpayer, credit cards, business services, investments, mortgages and loans of all shapes and sizes are offered by many credit unions.
Credit unions have even teamed up to create a shared-branch network that allows the member-owners of many credit unions to utilize more than 5,100 branches nationwide.
I do not have anything against a bank trying to make a profit, but what I’ve learned from working in a credit union for more than a decade has convinced me these not-for-profit financial cooperatives called credit unions are the best way to conduct my finances.
Nathan Rice is the Relationship Manager of the Downtown Suffolk branch of ABNB Federal Credit Union. He is a Hampton Roads native and can be reached at firstname.lastname@example.org.