The credit union difference

We're people helping people.

While banks and credit unions offer many of the same products and services, there's a big difference in the way the two are structured. Credit unions are not-for-profit financial cooperatives. That means we're owned by the people who use our products and services – our members. Earnings are returned to members through better rates and lower fees, which also benefits our communities and local economies. Banks are for-profit corporations where profits are paid to the bank's shareholders.

Credit unions are also led by an unpaid board of volunteer directors who are democratically elected by their fellow members. This helps ensure that decisions at the highest level are made in our members' interest. While a bank's board is made up of the shareholders who own the bank and collect its profits, credit unions never have to choose between satisfying shareholders or serving our members - they're the same people.

Credit Unions	Banks
Member-owned	Owned by a small group shareholders
Not-for-profit cooperative	For-profit corporation
Earnings returned to members through better rates  and lower fees	Profits paid to shareholders
Self-governed by an unpaid, volunteer board of directors	Led by shareholders who collect the bank's profits
Board elected democratically by members one member = one vote	Only shareholders vote more shares = more votes

Because of this difference in structure, credit unions and banks are taxed differently. Credit unions pay millions in taxes annually, including sales, property and employer-related taxes. Instead of a franchise tax that for-profit banks pay, Iowa's state-chartered, not-for-profit credit unions pay a moneys and credits tax on legal reserves. A credit union's excess earnings are returned to members through better rates and lower fees. In fact, our members saved an estimated $45 million last year by using products and services at Veridian compared to what they would have paid at a for-profit bank. That savings also benefits our local economies.
 

You're a member. Are you an advocate?

Bank lobbyists routinely reach out to lawmakers to promote legislation that would weaken or eliminate their competition from credit unions. That means your representative needs to hear from constituents like you, Iowa’s credit union member-owners.  Don't let a bank lobbyist speak on your behalf to your representative. Sign up to be a credit union advocate with the Iowa Credit Union League below. As an advocate, you’ll be notified when there’s an increased need for your legislator to hear from you. 
 

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