Credit Unions Serve Their Members First
From restaurants to clothing boutiques, more consumers are supporting local businesses. The same can be true in banking.
Credit unions are local institutions that offer an alternative to traditional banks. They offer the same lending and saving services. And, like the Federal Deposit Insurance Corp., the National Credit Union Association insures deposits at credit unions up to $250,000.
Patrick Gullatt, president and CEO of Barksdale Federal Credit Union; Matt Valentine, chief lending officer at Carter Credit Union; ANECA Credit Union’s Cyndi Phillips, community relations director; and Jessica Watkins, business relationship manager, discuss how credit union membership can serve individuals and small businesses.
Question: How does a credit union differ from a traditional bank?
Patrick Gullatt, president and CEO, Barksdale Federal Credit Union: Credit unions are not-for-profit, member-owned organizations. Credit unions’ primary focus is on serving their members and their community. Credit unions offer the same services as banks and much more. One of the core missions of credit unions is helping members reach their financial goals. They do this by providing information and education to all members of all ages. Members can learn about topics such as creating a budget, owning a home, buying a car, applying for student loans and planning for retirement.
Matt Valentine, chief lending officer at Carter: Credit unions are not-for-profit, which allows us to return profits to our customers in the form of lower loan rates, fewer and lower fees, and higher yields on deposits. A credit union’s board of directors serves in a volunteer capacity, where a bank’s board members are shareholders and receive money from the bank’s profits. The credit union philosophy of “people helping people” resonates well with all generations. This is especially true for those who value socially responsible organizations that put people before profit.
Cyndi Phillips and Jessica Watkins, ANECA: The big difference is our focus. On the surface, that may not seem like much, but when the focus is on “How can you help a person,” versus “How much can you profit from a person,” you get different outcomes.
We don’t have to be as profit-focused as member-focused. This allows us to look at a person’s entire situation to find ways to help them.
We’re here to help our members build strong financial futures.
Q: What are the benefits of credit union membership?
Gullatt: Your membership allows us to give back to the community. Our cooperative spirit of people helping people inspires us to work with members, employees, business leaders and community organizations to do great things.
We offer seminars, workshops and online tools to help members navigate various financial decisions, from home ownership and debt management to retirement savings.
Our youth programs are designed to teach children how to manage money wisely, and we empower young people to pursue higher education with savings opportunities and scholarships.
Credit unions care about people, which is why we focus our charitable efforts on initiatives that improve lives and provide opportunities for people. We sponsor events throughout the year and give to local organizations that help people in our community. In addition to financial contributions, our employees volunteer their time and talents to support local charitable organizations.
Valentine: There are many benefits to credit union membership. Previously, the standard response to this question would be that credit unions typically offer lower loan rates, higher deposit rates and personal customer service. All of this is still true, and due to our not-for-profit status, we can invest more in our technology and our people instead of having to pay shareholders a portion of the profits each year.
One of the most important benefits is the advancements made in technology that credit unions have implemented. For example, Carter Credit Union has placed Personal Teller Machines in most of our locations in the past three years. These systems allow face-to-face interaction with a Carter staff member and are available in branch lobbies and drive-thru locations. These machines allow us to extend our hours to serve customers.
Q: Are there circumstances in which a credit union would not be a good fit?
Phillips and Watkins: There are not many circumstances that a credit union would not be a good fit; however, credit unions are usually created for select groups of people. To give an example, ANECA’s Charter accepts people who live, work or worship in Caddo, Bossier and DeSoto parishes.
The people in this group have related values due to the area where they live. Other credit unions may be more designed for a different group a person may belong to. ANECA also has what are called SEGs (Select Employer Groups).
Q: How can using a credit union benefit small businesses?
taking steps to grow the economy and support local jobs by lending to
small businesses right in our neighborhoods. We understand what it takes
for small businesses to thrive here, and we’re proud to provide local
service to help move businesses forward.
Valentine: There is a common misconception that credit unions offer a small selection of products and services for a small business. This is simply not true. Many credit unions offer a complete suite of business banking services, including lending, checking, credit card, electronic services and much more. Because of credit unions’ not-for-profit status, they can offer lower loan rates to a business than most banks.
A small business would also benefit when applying for a loan with a credit union. A credit union is more likely to look at the whole picture of the borrower, where most banks are simply looking at a credit score, cash flow, etc. There are many circumstances where small business loans require a second look, and credit unions are more likely to take that look. Another benefit would be the structure of small business deposit accounts, which carry fewer to no fees, depending on the activity and deposit balance. Many credit unions offer free checking for small businesses and pay higher rates on interest-bearing accounts.
Phillips and Watkins: A business can benefit from using a credit union for their business banking with typically lower rates and lines of credit and help their employees. ANECA offers membership to SEGs (Select Employer Groups).
In today’s environment, employers are having a more difficult time finding and keeping good workers than in the past. That’s where being part of an SEG can be a benefit to your employees.
ANECA can bring your business in as an SEG and help your employees with everything from financial education, financial counseling and cash incentives for opening an ANECA membership.
Q: What is one service your credit union offers that a potential member might not expect?
Gullatt: Credit unions offer some of the most up-to-date and easy-touse technology. Members have access to online and mobile services such as online bill pay, mobile deposit, account transfers, low-balance alerts and personto-person funds transfers.
Valentine: Carter Credit Union offers a free Auto Buying Consulting Program to both customers and noncustomers. Our consultants have extensive experience in the auto buying industry and will assist you in the entire auto buying process. They will make sure you receive a good price on your auto, a fair dollar amount on your trade-in if you have one and make certain you are not paying for any add-ons or unnecessary fees. Our consultants will place you in the loan that best fits your budget. If you prefer, they will handle all the negotiations for you, removing the hassle most deal with at the dealership.