Mission Fed Loan Options: An Infographic

April 14, 2015 | Donna Handwerger

Mission Fed Loan Options: An Infographic

Banks vs Credit Unions

As a 35+ year credit union member and employee, I can’t imagine banking with anyone but a credit union. Providing financial services to members and helping them to achieve their financial dreams has been extremely rewarding to me and to the various credit union teams I have led over my career. Guiding members into products and services that will benefit them both immediately and over the long term is not only the philosophy of a credit union, but the daily practice. A primary credit union principle is to build strong relationships through knowing our members and earning their trust through financial recommendations.

Credit Unions exist to serve members, rather than to maximize profits

At Mission Fed, we pride ourselves on having a reputation of being more personal and focused on the community, and there’s a reason for that. When you open an account with a credit union, you become a shareholder. Credit unions are not-for-profit financial cooperatives that exist to serve their members rather than to maximize corporate profits. Like banks, credit unions accept deposits for savings and checking accounts, offer loans for auto, homes, credit cards and other personal needs, along with providing a wide array of other financial services, including various online and mobile services. Credit unions focus on providing a safe place to save and borrow at reasonable rates. Unlike banks, credit unions return surplus income to their members in the form of dividends, additional products and services and more branch locations. Additionally, fees and loan rates at credit unions are generally lower, with deposit rates generally higher than banks and other for-profit financial institutions. When you open an account with a credit union, you become a shareholder.

Safe, secured and insured

A false area of concern that consumers sometimes have is that credit unions may not be as financially strong or federally insured like banks are. Contrary to this thought, credit unions are often more financially secure than banks, and provide as strong (or stronger) insurance coverage. The majority of credit unions are insured by the National Credit Union Administration (NCUA) Share Insurance Fund, an agency of the federal government and backed by the full faith and credit of the United States government. In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act increased the maximum share insurance coverage to $250,000, with accounts that are in excess of this amount often being fully insured if properly structured.

Each member is an owner with equal say in how the credit union is operated

Another difference between credit unions and banks is that each credit union has its own individual volunteer Board of Directors who is elected by the members and establishes the policies. Being democratically-operated by its members (those joining the credit union) through the Board of Directors allows each account holder an equal say in how the credit union is operated, regardless of how much they have on deposit at the credit union.

Easy to join, great rates and customer-focused support

Today, joining a credit union can be as easy as living or working within the community where the credit union is located. Often, credit unions serve consumers with a focus on engaging with those who identify as needing access to affordable financial services. Some credit unions focus predominantly on providing financial services at reasonable rates in areas that are often underserved or unserved by banks. You’ll often hear that credit unions make a significant impact on individual consumers along with the community, and Mission Fed strives to make that impact with programs like $1Million Mission Fed Money Match, Mission for Our Schools and Mission for Nonprofits.

Overall, belonging to a credit union can only benefit a consumer, whether it’s through the lower fees and loan rates, higher interest rates, or more personal service. I encourage everyone to be a credit union member and take advantage of the many benefits and services they provide to helping you achieve your financial dreams!

The differences between banks and credit unions:

Banks are for-profit corporations. They answer to stockholders and hire a paid group of directors to lead their operations.

Credit unions are not-for-profit and exist for the people.—Every customer (whom credit unions call members) is an owner. The member-owners elect a group of volunteers as the Board of Directors to lead the credit union.

Credit unions:

  • Generally charge lower fees than banks
  • Typically offer higher savings rates and lower interest rates
  • Are locally owned by members
  • Make members the top priority
  • Give back to the community they serve

Mission Fed opened in 1961 in San Diego to serve the educational community. In 2003, Mission Fed expanded to serve the entire San Diego community. Now the largest locally based financial institution exclusively serving San Diego County, Mission Fed has 30 convenient branches for members to visit.

What kind of services do credit unions offer?

Credit unions like Mission Fed provide many traditional financial products, including Checking and Savings Accounts, Home Loans, Auto Loans, Credit Cards and more. Because credit unions are member-owned and not-for-profit, these accounts often provide better rates than competing products from banks.

Sources

http://www.businessinsider.com/should-you-use-credit-unions-or-big-banks-2014-1

https://www.missionfed.com/about-us/history-credit-unions

https://www.missionfed.com/blog/why-choose-credit-union-rather-bank

The content provided in this blog consists of the opinions and ideas of the author alone and should be used for informational purposes only. Mission Federal Credit Union disclaims any liability for decisions you make based on the information provided.

Picture of Donna Handwerger

Donna Handwerger

Donna Handwerger is VP Marketing Operations at Mission Federal Credit Union. She has over 20 years of experience in financial services. She started her career in sales and operations, with the last 15 years in Marketing, and excels in analytics.

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