Reason 1 Not tied to Federal Reserve Bank
“The Federal Reserve does not supervise or regulate credit unions. Federally chartered credit unions are regulated by the National Credit Union Administration, while state-chartered credit unions are regulated at the state level. The Fed is one of several banking regulatory agencies at the federal level.” Credit Unions are regulated by NCUA. According to FRBSF.org Community banks not tied to FED.
Reason 2 Owned by the local share members not corporations or investment firms.
Credit unions are owned and controlled by the people, or members, who use their services. Your vote counts. A volunteer board of directors is elected by members to manage a credit union. Said another way profits are not sent off to another state and neither are community banks profits typically.
Reason 3 Traditionally Credit Unions were willing to loan money for fair rates to underserved community.
The main reason for credit unions creation and growth was many banks did not wish to loan money to low and middle class workers. Today banks are required to lend under CRA requirements and are working with all people.
Reason 4 Credit Unions are more frugal about their image and what they spend on branch appearances and the optics of success.
Not the pressure to impress either big corporations or highly successful businesses but rather keep the expenses and image in line with everyday people. Go visit a bank lobby and then visit a Credit Union lobby and notice the differences.
Reason 5 Profits and investments are made back into your local community. Local impact and being intentional goes a long way.
In a time where we are asking where is the money going and what things are being done against my values or aligned with my values the Credit Union or Community Bank as one worth a serious look. I am biased as nearly all of my banking is done at local credit union. I also support local community banks as important banking resource to the local community. Think of this as doing business with your neighbors business and less about big corporate.
Here is easy to use Independent Rating System link to check out Credit Unions in your area for free and without complexity. Simple star system and links for more detailed reports for a fee. National Credit Union Administration locator link.
By Scott Thomas of Stewardship Matters, Inc. A Registered Investment Advisor and financial planning firm helping you steward well. scott@stewardshipmatters.net