CU vs. Banks… Fight!

October 6, 2011

What is the difference between a credit union and a bank? When it comes to what they do for a customer, not much. They both supply checking and savings accounts, make loans, and offer various other financial services. How well they do it is another matter.

When you join a credit union, you have instantly become an owner of that CU. By definition, they are owned by their members, in contrast to being owned by shareholders. This allows them to function as non-profit entities. Credit unions often make a profit, but this profit is then used to reduce fees or negotiate better rates for its members, rather than distributed to shareholders. Every member has one vote, and any member can run for the board of directors of the credit union.

It sounds good, doesn’t it? So what’s the downside? Well, credit unions restrict their membership so it’s not always possible to join one. They’re also much smaller than the monolithic banks that are the product of big banks being bought by even bigger banks (I once used Fleet Bank, which doesn’t exist anymore – is it Bank of America?).

For my part, I’m a credit union guy. Even local smaller banks have disappointed me lately. I recently went to close out an account at my old bank that I hadn’t used in a while. Not only had the couple of hundred dollars I had left in that account been gobbled up by service charges, but they tried to convince me to pay them another $35 in fees that had been charged before the account was closed. This is not likely to occur at a credit union.


2 Responses to “CU vs. Banks… Fight!”

  1. Kim Lanowy said

    🙂 thanks. still contemplating another request….

  2. Kim Lanowy said

    its October 11th…you must have learned something in the last 5 days!

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