Description: The article contains the topic on state employees credit union member access. The author is willing to talk about the differences between banks and credit unions which can best illustrate the different mentalities and financial institutions. We can go over the positive points and downsides of the credit unions.
How’s it going? I hope you are having a good day, so last time we talked about what to look for when you’re choosing a bank that you want to do business with, so today I want to talk about the differences between banks and credit unions.
There are many more different types of finance institutions like online banks, state banks, community banks, but I want to talk about credit unions and banks, I think they best illustrate the different mentalities, financial institutions have and how profit motive can change the way that they do their business.
Let’s start with banks. I want to say despite any of my biases, I don’t think banks are bad or evil or anything like that, they have a corporate obligation to amass as much money as they can.
Let me expand on the big banks, the ones that you all know the names of them are publicly traded on the stock market and people invest in that company, they’re called shareholders, so banks have an obligation to make those shareholders as much money as possible.
In order to do that, in order to increase the value of their company, they need to make money as much as they possibly can, that means the more fees they charge, their company value goes up, the more interest they make on their loans, their value goes up, every one of their people that are using their debit cards or credit cards their, value goes up.
When their value goes up, the share price goes up, the investors make money, they’re doing their jobs, it’s not bad, it’s not evil, that’s what they’re there to do, so let’s remember this, they are obligated to make as much money as they can for the investors to invest in their company, that doesn’t mean that the products or services that they offer are bad.
It shows you that ultimately they need to make as much money as they can and profit motive is their driving force, because of this, it normally means that banks aren’t the best.
When it comes to fees and interest rates, however, when it comes to accessibility and convenience, big banks reign supreme if I asked one of you to find a big bank around your city, you would have no problems, try locating one, consequently they are the financial Giants.
I read an article that said the top five major banks on half of the financial industry, think about it, that is crazy, five banks on half of all the financial industries and think about how many hundreds thousands of banks and credit unions, there are these top five on half.
Let’s talk about credit unions and let me say this for the sake of transparency. I work for a credit union, I worked at one for the past eight years and in that time, I’ve learned so much about the financial industry and I know about the distrust and lack of faith that people have.
When it comes to that and it’s why I started this channel to help educate people to let people understand what’s going on and they can better themselves, so they don’t have to distrust their banks or the credit union or whatever they decide to bank with.
We can help educate people on how to do things in the right way, so I hope that doesn’t cause you to lose faith and what I’m saying or trust me, I felt it was something that I should be clear on to credit unions.
Unlike major banks, credit unions are not-for-profit organizations and they have a board of directors that listen to their members to help steer the credit unions path, notice that that’s not a nonprofit organization, it means that their sole purpose is not to make as much money as they can, that’s not true, they probably do.
But what they want to do with the money is to put that back into the community, give it back to the members, that’s why credit unions fees and interest rates are normally much more favorable than the banks.
They want to give that back to the members, it’s not to say that credit unions don’t charge fees and everyone that works there is an angel, but it normally means that their goal is to benefit their community and their members which is great.
The downside to credit unions is that they are small compared to major banks, they’re not technologically advanced, they don’t have locations on every street corner, I doubt a tenth of all the credit unions that are in your state, they don’t have all the bells and whistles.
The big banks don’t have the resources, if you work, you need somewhere to put your money and you want that financial institution to do by you and a credit union is a great place to go, they can absolutely help you out.
This is a very small portion of the difference between banks and credit unions, but in my opinion, it’s the biggest and most significant difference that they have, I truly believe that both serve their purpose.
There are certain people that should be using big banks and there are other places that should be using smaller banks or credit unions. I will say this with complete bias, I do believe that most individuals who have basic banking needs should be at a credit union.
I think the underlying principles of a credit union better benefit those people, I can’t tell you how many times someone’s come over to my credit union, because they’re so sick and tired of their banks throwing them over and this happened a lot back in 2008 during that economic collapse.
When people come up and ask me what the difference between banks and credit unions is, I think it’s unfair, but to me, it’s true, think back in 2008, the economy’s collapsed, financial institutions are in trouble, it’s on the news, everyone’s getting crazy bonuses, everything bad is happening to bail out.
It’s a bad time for the financial industry, most people do remember that I asked them how many of those companies on TV that were in the bad spotlight were banks, how many of them were credit unions, that’s the difference which is a little sensationalized.
Think about it, I don’t remember saying a single credit union in trouble, I saw a lot of big banks were in trouble and I saw a lot of people were dissatisfied with banks and I saw Occupy Wall Street happen, that was because they distrusted these big huge mega corporations, there’s profit driven.
Don’t care about you or me, we’re an account number, that’s all, I don’t want to be an account number, I want to be someone that is treated with respect and I’m given the services that I need.
I’m being helped out by my financial institution, you vote with your dollar everywhere you bank with, they’re getting your vote, if you don’t like what they’re doing, you stay with them, how do they change everything to anything? Because you’re willing to put up with the bad things that they’re doing.
I promise you this, if credit unions started doing a lot of bad things, people are going to leave them to no one’s perfect, but for what I’ve seen, I think that most people are better served by being at a credit union and the moment that changes, I’m leaving too.
I want to say I set up these first three videos as the philosophical reasons of why we’re with banks, what they stand for and how we should look at the relationship that we have with banks.
Now that we’ve got that set up and hopefully you’re with a bank that you trust and you want to give business to, I want to start going over the specifics of what financial institutions can do for you or what they may be doing for you.
That’s not great for you now, we’re going to get into interests loans credit score’s investment banking practices, all the stuff that I think is going to impact you on a day to day basis.
So stay tuned, hope you have a great day, thanks again, take care, I hope you learned something new from it and you are able to strengthen your financial position, I’m going to keep coming out with more videos, so please stay tuned, but go ahead and like, subscribe, comment and have a good day.