Credit Unions: Cheat Sheet
Stuff you need to know:
- The main difference between a credit union and a bank is that banks are for-profit corporations and credit unions are non-profit companies "owned" by the account holders.
- As non-profit entities, credit unions don't pay state or federal taxes, allowing them to offer better interest rates than some banks. Banks see this as unfair competition and have fought credit unions' non-profit status up to the Supreme Court.
- Credit unions are formed to serve a group of people who share something in common. Examples are: employees at a particular company, alumni of a particular school, members of a church, members of a specific community and armed forces veterans.
- There are two major types of credit unions: natural-person credit unions and corporate credit unions. Natural-person credit unions are the ones that serve individual customers like you and me. Corporate credit unions help manage the finances of natural-person credit unions by providing loans and liquidity to the institutions. Even corporate credit unions are non-profit.
- To find out if you qualify to join a credit in your area, ask your coworkers, friends and people in your community. Or you can contact the Credit Union National Association.