Political Action
What Makes Us a Credit Union, Not a Bank?
America First and all credit unions were formed with one goal: improving the financial well-being of the membership. Banks were all formed with one goal: making money for shareholders. Is it any wonder we don't aspire to be a bank?
Utah's banking community thinks America First and other credit unions aren't behaving legally because of our size. This is simply not true. It doesn't matter how big America First is, it matters that we are a not-for-profit organization adhering to every standard that defines a financial cooperative.
Consider the following differences between credit unions and banks:
Credit Unions
- Credit unions are managed by volunteer boards of directors who serve only to assist the financial health of the entire membership. Credit union members vote in board of directors elections.
- Credit unions do not operate for a profit, and therefore do not pay corporate income taxes. Credit unions pay other state and national taxes.
- Credit unions, by federal law, must retain a high percentage of capital to protect members' savings, weather tough economic times and fund the ability to grow and better serve members.
- Credit unions operating under a Utah charter can only serve new members in counties that have been determined by state government, and serve employees of businesses that meet certain criteria.
- Credit unions, as not-for-profit organizations, serve the financial well-being of the member through free consumer education and counseling.
- Credit unions are comprised of members who share resources in order to gain the lowest possible loan rates, and the highest possible savings returns.
Banks
- Banks are managed by boards of shareholders who expect to profit from the customers who use their products and services. Bank customers have no input into the management of their financial institution.
- Banks operate for a profit, and therefore do pay corporate income taxes and all other state and national taxes.
- Banks can issue stock to raise capital and must retain a low percentage for savings. Banks can grow any way they choose and expand into any market they choose.
- Banks can serve any customer in any state, and their growth is not restricted by state or national government.
- Banks seek profit and will exploit any customer's financial health in order to raise money for shareholders.
- Banks seek customers who will pay the interest rates they offer on loans, and accept the returns they provide on savings. Shareholders profit from these customers.
