What makes Arsenal Credit Union different from a bank? While a credit union and a bank offer financial products and services, the similarities stop there. Crucial differences exist – in ownership, in cost of borrowing money and in use of services.
- You own your credit union. Credit unions are member-owned, not-for-profit financial cooperatives dedicated to improving members’ lives. Stockholders own banks. Banks make money for stockholders, not for customers. We share our net earnings (“profits”) with our members/owners in many different ways.
- Credit unions have the best rates. Credit unions price loans lower than most lenders, pay higher interest on deposits and charge lower and fewer fees to provide you with high-quality, low-cost services. Banks price products and services to make a profit. Credit unions make consumer loans and member business loans. Banks offer consumer loans but really emphasize business loans. At credit unions, auto loans average about one and one-half percentage points lower than bank rates, while interest rates on credit cards average three percentage points lower than bank rates, based on research by the Credit Union National Association. Money market, savings and interest checking accounts carry higher rates at credit unions – giving back more to members.
- Credit unions educate members about money matters. For example, they provide publications such as this newsletter. At Arsenal, we also provide you with free materials through our website and in our branches to help you make informed buying decisions. During the year, we also hold free seminars. Many banks simply advertise their rates and services.
- Credit unions are the only democratically controlled financial institutions in the United States. You and other members elect a volunteer board of directors to oversee the credit union. These elections are held during our annual membership meeting. The president/CEO reports to the board. Bank directors, however, are paid and legally bound to make decisions that benefit stockholders, not customers.