Setting the Record Straight
Unions Can Serve Anyone.
is not true. Unlike banks, credit unions cannot serve the general
public. Credit union membership is limited to persons who share
a common bond of employment, association or community.
credit union's field of membership is restricted by law. The banking
industry has been trying for years to deny consumers and employees
of small businesses access to credit unions. At a time when banks
are experiencing record breaking profits, it is evident that the
prosperity of credit unions and their ability to serve millions
of consumers has had no impact on banks' bottom line.
Unions Do Not Pay Taxes.
unions do, in fact, pay taxes. They pay property, county, school,
municipal and employer taxes. But, because credit unions are not-for-profit,
returning all profits to their members in the form of higher rates
on savings, lower loan rates and low- or no-fee services, they do
not pay corporate income taxes.
the contrary, banks must pay corporate income tax because they are
in business to maximize profits and return them to stockholders,
not customers. For that reason, banks are subject to the same income
taxes as other for-profits businesses.
Unions Look and Act Like Banks.
is true that credit unions offer financial services similar to those
offered by banks. But, credit unions, smallest to largest, subscribe
to a business philosophy and retain a structure that is very different
unions give consumers the option of owning the institution where
they do their financial business. Therefore, credit union members
are not just another customer-they have an equal vote in determining
the direction taken by the institution. Credit unions cannot issue
stock, so, and most importantly, they return all earnings to their
on the other hand, are for-profit and have stock-holdings by outside
investors, who essentially own them and hold voting rights. Banks
exist to enrich stockholders, usually to the expense of their customers.
Unions Don't Insure Investments.
unions DO insure their investments. Credit unions have their own
federal insurance program covering member savings accounts. Today,
all credit union share accounts in Georgia are insured up to at least $250,000
by the National Credit Union Share Insurance Fund (NCUSIF). The
NCUSIF is administered by the National Credit Union Administration
(NCUA). No taxpayer monies, or monies from other federal deposit
insurance programs, are used to fund the NCUSIF. Credit unions pay
a percentage of their deposits to build the fund. And, like other
financial service providers, credit unions are regulated and audited
either by state or federal agencies.