The Credit Union Difference

At NMTW Community Credit Union, one of the most frequent questions that we hear is “What is the difference between a credit union and a bank?”  While there are many differences, there are three major distinguishing points, which involve ownership, business purpose, and governance.

1. Credit unions are non-profit financial institutions owned by their members and governed by a volunteer board of directors, elected by, and from among, those members.  Banks are for-profit financial institutions owned by private investors and governed by a paid board of directors chosen by stockholders. 

2. Credit unions return their profits to their members by way of lower fees, higher interest rates on deposit products and lower interest rates on loans, while banks return their profits to their shareholders.

3. All financial institutions are subject to periodic regulatory and federal insurance examination, but different agencies handle that task.  Banks are ruled by the Federal Deposit Insurance Corporation (FDIC) and credit unions are governed by the National Credit Union Association (NCUA).

And while different isn’t necessarily better, why should you choose a credit union?  Our tagline says it best, “We add value to your day.”  Credit unions work for their members, providing them with not just an account number, but the tools and knowledge they need to be financially successful.  If you aren’t already a member of NMTW or another credit union, we hope that you take the time to evaluate your banking relationship and strongly consider the benefits of credit union membership.

Feel free to stop by one of our Lowell branches (87 Hale Street or Cross Point 900 Chelmsford Street), call 1-800-942-9575 or visit www.NMTW.org for more information about all of NMTW’s products and services.