The credit union difference
Credit unions are member-owned, not-for-profit financial cooperatives.
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 member-owned, not-for-profit financial cooperatives. That means earnings are returned to members in the form of better rates and lower fees. Banks are for-profit corporations where profits are paid to the bank's shareholders.
|Member-owned||Owned by a small group shareholders|
|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
Credit unions are led by an unpaid, volunteer board of directors who are democratically elected by their fellow members. This helps ensure the credit union is governed in its members' interest. A bank's board is made up of the shareholders who own the bank and benefit personally when the bank profits.
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. A credit union's excess earnings are returned to its member-owners through better rates and lower fees. In fact, our members saved an estimated $35 million last year by using products and services at Veridian compared to what they would have paid at a for-profit bank. Instead of the franchise tax that for-profit banks pay, Iowa's state-charted, not-for-profit credit unions pay a moneys and credits tax on legal reserves.
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. 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.