Discover the Credit Union Difference

When I first began my career in banking, I was a part-time teller at a regional corporate bank. Until that point in my life and career, I had only known banks. These were the institutions where you deposited funds, borrowed money for various loans, and, if you were fortunate, perhaps worked with an investment advisor to invest additional savings. In my young teller mind, everyone used banks to facilitate their financial needs.

Throughout my banking career, where I transitioned from a teller role to lead vault teller, personal banker, and eventually a branch manager, I learned more about the enigma of credit unions. I would hear customers discuss their ‘shares’ in the local credit union. When I had to deliver the bad news that a customer was denied a loan, the customer would shrug and say- “I guess I will go to my credit union. I know they will approve me. Don’t know why I bothered coming here to begin with.” And out the customer would go, and sometimes I wouldn’t see them again.

Eventually, this piqued my curiosity, and I began researching credit unions. I was pleasantly surprised to learn that credit unions could conduct all the same business banks could, but with a positive twist. Credit unions are for the people. They are cooperatives.

According to the National Credit Union Association (NCUA), the first credit union opened on April 6, 1909 – St. Mary’s Cooperative Credit Association in Manchester, New Hampshire. It was opened by Alphonse Desjardins. Shortly after St. Mary’s was created, Edward A. Filene and Massachusetts Bank Commissioner Pierre Jay worked together to create the Massachusetts Credit Union Act, essentially the first general statute for establishing credit unions in the United States.

It wouldn’t be until 1934, when President Franklin Roosevelt signed the Federal Credit Union Act, that credit unions began to take off across the country. Perhaps consumers were fed up with banks and the market crash of 1930. Maybe every day, working-class folks were ready to join forces and create cooperatives where their hard-earned money continued to work for them. No matter the reason, credit unions have continued to evolve over the remainder of the 20th century; today, we continue to see the evolution of credit unions.

Once I had dug into credit union history, it didn't take long for me to learn where I wanted my career trajectory to take me. I was fortunate to transition to the credit union movement and haven’t looked back since.

Now, with nearly twenty years of banking experience, I can attest to the power of the credit union movement. Credit unions are not for profit, meaning every decision made is with the members in mind. That’s right; you’re not a customer but a member. No corporate stakeholders are raking in all the profits. Every member owns a piece of the credit union, referred to as a ‘share’ of the credit union. Members have the right to vote on the volunteer board of directors and annually have the chance to voice any questions or concerns at the credit union’s annual meeting.

Credit unions across the country have various asset sizes and membership requirements. Some credit unions continue to focus on a single field of membership, for example, only offering membership based on where you work, live, or worship. Other credit unions have a federal charter, which grants them the ability to provide a wider range of membership nationally.

As of September 2024, there are 4,590 credit unions nationally. Although the overall percentage of credit unions has decreased by 2.3% year over year, collectively, credit unions have seen a 2% increase in membership.

Could more bank customers finally be waking up to the value credit unions bring to the financial sector? As a product developer in the credit union space, I can attest to the fact that credit unions truly can offer members the same, if not better, products and services as large banks. Typically, credit unions are known for having lower or fewer fees and competitive deposit and loan interest rates. Since credit unions are cooperatives, it is not unusual to see partnerships with other business partners to facilitate student lending, mortgages, and investments.

With the volatility of the current economic climate, it’s no wonder why more consumers may be turning to a credit union. Every single consumer deserves to have their money work as hard as they do to earn it. Why not move to a credit union and join a century-old movement that delivers positive financial impacts to our communities?