Both commercial banks and credit unions provide loans and accept deposits, in addition to a variety of other services to businesses and consumers. In your own words, what sets them apart from one another? Who do they service and how do their mission statements differ? Research a website from both a credit union and a commercial bank. How would you use them for business purposes and personal needs?
Although Banks and Credit Unions are both financial institutions, they both have similarities such as insuring their depositors up to $250,000. Banks use Federal Deposit Insurance Corporation (FDIC) and Credit Unions use National Credit Union Administration (NCUA), both are federal agencies. The both offer services to their customers including various accounts e.g. checking, savings, and business accounts. The both offer a wide variety of loans from commercial to personal. The key difference between Banks and Credit Unions is ownership. While Banks are a for-profit business corporations owned by private investors and governed by a board of directors chosen by the stockholders. Credit unions are non-profit financial cooperatives owned by their members and governed by a board of directors elected by its members. Most Credit Unions require a “common bond”, such as belonging to the same organization or living in the same geographical area. Because each member is a shareholder, each member has an interest in the success of the Credit Union. Personally, I have used both Banks and Credit Unions for business and personal use, Credit Unions are geared more for personal accounts, and generally, money deposited is what funds its consumer loans. Banks are geared more for business lending, and with my experience, I do not necessarily feel they have the consumers best interest in mind with their consumer accounts. With that in mind for a smaller business, Credit Unions can handle most financial transactions, however in a larger corporation Banks would be a more effective...
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