What do you know about credit unions? Is it possible what you think you know is not actually the truth?
Ever since President Franklin Roosevelt signed the Federal Credit Union Act into law in 1934, the credit union industry has been growing and evolving. Even with over 100 million credit union members nationwide, there are still some common misconceptions about credit unions.
Don’t be a victim of misinformation. Know the facts about credit unions and how they can help you best manage your finances.
You have to be employed by a particular company or belong to a certain organization to do your financial business with a credit union.
Fact: It’s true that credit union members must be part of a defined “field of membership” for each credit union. While there are still some credit unions that limit their membership to groups, many credit unions offer their services to anyone who lives, works, or worships within a defined community. For example, Genisys Credit Union serves residents of the entire state of Michigan and select counties in Minnesota and Pennsylvania. Plus, once you become a member of a credit union, you can stay one for life - even if you no longer meet the eligibility requirement. If you move to Hawaii, you can still be a Genisys member!
Credit unions don’t offer as many ATM locations as a large bank.
Fact: Most credit unions belong to networks that provide surcharge-free ATM access across the country. Genisys Credit Union is part of the Co-Op ATM Network which provides surcharge-free ATM access at nearly 30,000 locations.
Credit unions can’t help with all consumer banking needs.
Fact: Most credit unions provide all the financial services a family needs. From home loans to car loans, debit cards to credit cards, checking accounts to investment options, and branch banking to mobile apps; credit unions provide the products you are likely to find at other financial institutions. Most credit unions also offer services for businesses.
A bigger bank has the resources to provide better rates and fees.
Fact: Year after year, credit unions are found to offer lower rates on loans, higher rates on savings, and charge fewer fees than banks. The primary difference between banks and credit unions is their ownership and purpose. Banks are for-profit businesses operating to generate earnings for their stockholders. Credit unions are not-for-profit and owned cooperatively by their members. The purpose of the credit union is to operate in the best interest of their members, not to generate a profit for stockholders.
Balances in credit union accounts are not federally insured.
Fact: In most cases, the balances in your credit union accounts are federally insured by the National Credit Union Administration, the credit union equivalent of the Federal Deposit Insurance Corporation that insures banks. Insurance coverage is to the same limits as bank deposits.
Credit unions don’t pay taxes so they have an unfair advantage.
Fact: Actually, credit unions do pay many taxes like sales tax and property tax. As not-for-profit, member-owned financial cooperatives, credit unions do not pay corporate income tax. This “advantage” is passed on to members in the form of services, better rates, and lower fees.
Credit unions are not regulated like banks.
Fact: Credit unions are held to the same laws and regulations as banks. In fact, credit unions have some restrictions that banks don’t have. Rest assured, regulations meant to protect you are in force at credit unions.
Don’t let myths about credit unions stop you from taking advantage of all the benefits they offer. If you hear something that concerns you about credit unions, don’t take it at face value. Talk to a credit union representative so they can tell you the facts.
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