Why Credit Unions Aren't Banks 

When you walk into the credit union lobby, or call a lender, what makes North Shore Federal Credit Union 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 the use of services.

You own your credit union. Credit unions are member-owned, nonprofit financial cooperatives dedicated to improving members’ lives. Nearly 71 million members own 11,866 U.S. credit unions with combined assets of $342 billion. Stockholders own banks (with combined assets of $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 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 or more — at the credit union.

Credit union loan rates are also better. The average credit card interest rate is five percentage points better at credit unions vs. banks. And credit union auto loans average at least one percentage point less than banks’ auto loan rates. Credit unions make consumer loans. Banks offer consumer loans, but really emphasize business loans.

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, promotions, and financial trends that affect you. North Shore Federal Credit Union stresses education, providing materials and holding seminars on financial planning, car and home buying to help you make informed decisions. Many banks simply advertise their rates and sell their services.

Because you’re an owner of North Shore Federal, 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.