What is a Credit Union?
We’ve grown up raising money in piggy banks, playing cops and robbers to steal from a bank, and we’ve all been the “banker” a time or two in the classic board game Monopoly… but how many of us really know the function of a credit union? Banks have been the predominant force in financial institutions for hundreds of years, but credit unions are quickly becoming the norm for several beneficial reasons, some of which we’ve mentioned here.
For starters, a credit union is a not-for-profit organization. That means any excess earnings (profits) that occur over time end up right back in the pockets of the credit union’s members. This could be in the form of:
- Lower loan rates
- Higher share deposit rates
- Fewer fees
- Better service
It’s extremely beneficial for credit unions to have access to excess earnings just in case there is an economic downturn (like we’ve seen in the last few years) or when there are periods of slower income growth. Profits like these go straight to giving the credit union the ability to survive and when a credit union survives, its members thrive.
Members are Owners
It’s easy to understand that banks and most other for-profit organizations are owned by a group of shareholders who make executive decisions for all members. Understanding that members of a credit union are part-owners who have the power to make important decisions as a whole is a little more difficult to grasp. As a part-owner, members:
- Can vote and run for the board of directors
- Look out for their own financial interests
Ready to Join a Credit Union?
These are just a few of the many beneficial reasons to join a credit union – to learn more, try contacting MNFCU at (248) 674-0491 or visit us in person!
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