FINANCIAL
Comparing Credit Unions
and Banks
Structure, management differ for these
institutions
by Angela S. Hoover, Staff Writer
Credit unions and banks offer
mostly the same services: checking and savings accounts; financial
products such as CDs; and loans
and mortgages. But this is where
the similarities end. The basic structures and management of the two
institutes are strikingly different.
BANKS
Banks are for-profit corporations
that use depositors’ money to create
profits by investing it or loaning it
out to other customers. When you
make a deposit or buy a savings
product, you’re essentially loaning
money to the bank. In exchange,
the bank pays you back in interest
for that loan, but rates can vary
widely among banks.
As with any for-profit business,
banks answer to their investors.
Therefore, all the activities a bank
engages in are expected to show
a profit. The key expenditures of
banks are advertising, lobbying and
risk assessment. Advertising creates
the belief that one particular bank
is better than others so