Credit Unions are founded on the principle of people helping people, and as a result, the relationship with their members is much deeper than the one that exists between banks and their customers. Through tough times, those tight-knit relationships can provide reassurance that things will improve.
Although they might appear similar to a casual observer, the structure of a Credit Union is very different from a bank. Depositors are called members, and each is an owner of the Credit Union.
On the other hand, banks have customers who have no ownership in the financial institution. Rather, the owners are stockholders – the bank investors. During Covid-19 lockdowns, communities felt isolated, and Credit Unions, true to their credo, stepped up and figured out how to continue to communicate with their members, offering financial guidance and, in some cases, providing much-needed safety nets.
Typically, Credit Unions offer members some advantages when compared with big banks:
- Lower interest rates on credit cards
- Lower rates on loans
- Free or low-fee checking
It’s worth noting that Credit Union deposits are insured by the National Credit Union Share Insurance Fund; bank deposits are insured also, but by the Federal Deposit Insurance Corp.
During the recent lockdown, Credit Unions recognized that their members would have financial questions: “My hours have been cut at work, can I get a payment extension on my loan?” “I found my dream house—can I still get a mortgage?” “My roof is leaking and I need a home improvement loan!” They set out to provide safe, easy and fast ways to provide answers and convey information to members.
Just because the doors were shut at the Credit Union didn’t mean lines of communication were down. Text Messaging enabled Credit Unions to answer members’ questions, even when branch lobbies were closed and employees worked from home: loans were approved, payments got extended and houses were bought.
Credit Unions provide a more personalized way of handling personal finance. As the economy becomes more complex, credit unions are streamlining their procedures to provide more efficient communication with members. That means more successful interactions and stronger bonds with their members and communities.