Business professionals having a meeting

What is a Credit Union?

The credit union difference.

At first glance, there may not seem to be much difference between credit unions and banks. However, there are some critical factors that set the two apart.
Read on for answers to those and other frequently asked questions about credit union membership.
Credit Unions Banks
Owned by members Owned by stockholders
Not-for-profit For profit

Credit unions and banks offer very similar financial products and services, but their business models are significantly different.   Credit unions are not-for-profit institutions that are owned by their members. Banks are owned by shareholders and their primary mission is making a profit.

Membership eligibility varies from one credit union to another.  Some credit unions limit membership access to employees and their families.  Others, like PrimeTrust Federal Credit Union, operate under a “community charter”.  This means anyone who lives, works, worships, or attends school in our community area (Delaware County) is eligible to become a member.
Product offerings vary by institution. For the most part, credit unions offer the same services as most banks.
PrimeTrust Federal Credit Union offers the products:

  • Home mortgages
  • Vehicle loans
  • Equity loans
  • Loans for commercial real estate/business services
  • Checking and savings options
  • Certificates of Deposit
  • Money Market Accounts
Many credit unions, including PrimeTrust, have expanded their offerings to include Visa® credit and debit cards. 
Credit unions exist solely to benefit our members. Because credit unions aren't focused on making a profit, we're able to offer lower rates on loans and higher earnings on savings. Additionally, some credit unions, like PrimeTrust, offer a dividend back to members who use specific financial products and services.

Credit unions also tend to work more closely with members, offering free financial counseling and a local approval process that favors their members.
 While many credit unions may only have one or a handful of branch locations, many – like PrimeTrust Federal Credit Union – are part of a larger national network of credit unions called Co-op Shared Branching.  Currently, there are over 5,000 branches nationwide – with over 30,000 ATMs – that participate in Co-Op Shared Branching.  That means members are able to access their account from any of these participating locations with the same privileges they enjoy with their hometown credit union. 
Credit unions are led by boards of directors made up of their members. Every PrimeTrust member is technically a part-owner and, as such, gets to vote for members of the board. The president/CEO reports to this board. Bank directors, however, are paid and are legally bound to make decisions that benefit stockholders. Banks make money for stockholders, not for members.

Because credit unions aren't focused on making a profit, we're able to offer lower rates on loans and higher earnings on savings.

Credit unions are insured by the National Credit Union Administration (NCUA), an independent federal agency that administers the National Credit Union Share Insurance Fund (NCUSIF). The insurance coverage the NCUA provides is practically the same as the FDIC. All funds deposited at a credit union are federally insured up to $250,000 per deposit and backed by full faith of the United States Government.