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August 24, 2019

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America First Credit Union

What is a credit union?

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Credit unions and banks differ in many ways, but the defining characteristic between these financial institutions is that credit unions are not for profit and member owned, whereas most banks are for profit and owned by shareholders. “Although both offer some of the same products and services, their purposes are dramatically different,” said Tammy Gallegos, chief strategic engagement officer for America First Credit Union. The differences between the two are important when deciding where to put your money and what financial institution is right for you.


Credit unions are not for profit, so excess earnings are reinvested back into the organization. Typically, these funds are used to improve member experience and financial health. For instance, credit unions can deliver lower rates on loans, higher dividends on deposits, low or no fees, and mobile and online banking. They are cooperatives where members get voting power and decisions are made democratically. “The membership elects a volunteer board of directors who serve without compensation,” Gallegos said. This encourages an environment where members of the board are motivated by community betterment, not financial incentive.

By contrast, for-profit banks are owned by shareholders. Customers do not have a say in the organization and board members are paid and typically appointed by the shareholders.


Credit unions and banks are regulated and insured by different federal agencies. The National Credit Union Administration governs financial cooperatives, while the Federal Deposit Insurance Corporation oversees banks. Both offer protection for up to $250,000 for each qualifying account.


There are many types of credit unions, and each has specific membership requirements. For example, it’s common for labor associations, large companies, schools and other groups to have credit unions for their members, employees or students. There are also credit unions with broader eligibility requirements, accepting membership based on location. According to the Credit Union National Association, more than 118 million Americans are credit union members, a number that grows each year.


Although larger banks often have more branches and ATMs, credit unions share a cooperative network that gives members widespread access. The Co-Op ATM network allows credit union members to withdraw from ATMs without paying fees.

Focused on members

Credit unions exist to serve their members and are self-governed. As a result, member service is a top priority and credit unions are consistently rated highly for customer service satisfaction. With members as the core focus, credit unions often have greater flexibility in providing affordable loans, safe savings programs, better rates on checking and savings accounts, and more. “Credit unions work with members to help them achieve their goals and offer programs designed to make that happen. The financial health of one member contributes to the overall financial success of the entire credit union. This relationship means we’re dedicated to each member and how we can best serve them,” Gallegos said.