The Credit Union Difference



As a representative for a credit union, one of the things I hear the most is, “Are you a bank”? What’s the runner up? Simple. “Ohhh…the Federal Credit Union. Yeah, I’m a member.” This got me thinking, how can we explain our structure and its unique DNA in a meaningful and easy-to-understand way? More importantly, how can we explain that just like any other business, not every credit union is the same? These ideas prompted us to start our blog.

So, let’s tackle the first topic…are we a bank? Nope. Not even close. Well, I suppose in the sense that we offer checking, savings, CD’s (although in the credit union world, we call them ‘certificates’), loans, credit cards and mortgages, we are like a bank. In every other sense, we couldn’t be more different.

Here’s some history on our movement…


1901 – The first credit union was established in North America.

1909 – The first credit union in the U.S. was founded.

1934 – A bill is adopted by the U.S. Congress to allow the chartering of federal credit unions.

1935 - InFirst Federal Credit Union was chartered as Civil Service Commission Employees Federal Credit Union.

(, 2019)


So what’s so special about us? For starters, credit unions are not-for-profit cooperatives. This means that our members are owners of our organizations and they receive higher dividend rates on savings and checking products, and have lower rates on loans. We also have fewer fees and lower fees. We even offer free services that banks simply cannot afford to do.

Since stockholders want a higher return on their stock investment, banks have to find more ways to earn money; this is why they have higher fees and penalties, and charge higher loan and credit card interest rates to their customers.

That’s another thing – you won’t hear the word ‘customer’ thrown around at a credit union. Since credit unions are chartered institutions, you must be a member of a credit union. Yes, there is a huge difference.

Having a “members first” mentality allows credit unions to be more flexible and generous with how we are able to serve our membership. Similarly, we are able to give back to our communities in ways that are more meaningful.


This is a nice segue into our second topic. Just because you are part of a Federal Credit Union does not mean you belong to all Federal Credit Unions. There are thousands of us waiting to help members like you, but we aren’t one-size-fits-all institutions. Rather, we all have our very own unique attributes that make us stand out. Some credit unions are community-based, which means that only residents of that community are able to join the credit union (this might also include individuals who work, worship, or attend school within the community). There are also credit unions for “select employer groups” or affiliations, which is a long-winded way of saying, if you work for a certain employer or maintain a membership with certain groups or organizations, you may be eligible for one or many credit unions based on that affiliation.

To sum up, membership of a credit union is a privilege. If you are lucky enough to qualify for one, you should absolutely take advantage of that opportunity. And, don’t stop with just one. You never know when you will need to exercise some shopping power. One thing is for sure, you will have access to high quality products, more competitive rates, and will always get better service at a credit union than you would with a bank.

If you have questions that you want answered about banking, credit unions, or our products and services, we want to hear from you! Leave us a comment, or email us at

Stay tuned to next week when we discuss teaching your children or grandchildren about money, credit, and saving!

Krista Kyte profile image

Krista Kyte is a personal finance blogger and personal banker with over 17 years of experience in the financial industry. Krista is passionate about helping our members understand their financial situations. She writes tips that will help them reach and maintain financial security, and start living the life they’ve always wanted.

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