The Difference Between a Credit Union and a Bank

On this month’s podcast, we met with Kelli Green, Centric’s SVP of Marketing and Member Engagement, to discuss the many differences between a credit union and a bank. 

Transcript

Speaker 1 (00:01):

Welcome back to another episode of the Live Better Podcast by Centric Federal Credit Union. I'm your host and Centric's Social Media and Marketing Specialist, Emma Banes. I'm so excited that you're here today. Every month we post a new episode where I'm joined by a guest to chat about all things living better and finances. Subscribe today so you never miss an episode. Today we are joined by Kelly Green, who is the SVP of Marketing and Member Engagement here at Centric to chat about some key differences between a credit union and a bank. Thank you for joining us today, Kelly. So before we get started, will you tell our listeners just a little bit about who you are and what you do here at Centric?

Speaker 2 (00:42):

Yeah. Thanks so much, Emma, for having me. Uh, it's, this is a great opportunity, I feel like for us just to share what's on our hearts and minds and really lean into the purpose of Centric. Uh, you know, this podcast is near and dear to my heart. So if we have regular listeners, I know you've heard a lot, um, from my own personal experience through working here at Centric, but also about my family. Um, and I will tell you that Centric has impacted my family over the last 10 years, um, by me serving here at the credit union. But from a financial standpoint has really helped me understand, um, what trajectory do I want to, is my, are our finances really heading? And the tools here at Centric has helped really me and my family, especially my husband and I to determine, you know, what are our financial goals and the products and services that we have here at the credit union have really helped us identify and, uh, help us achieve the goals.

Speaker 2 (01:39):

Um, our savings, dividends and our earnings that we receive not only just add to our savings that we have, but it just, it's encouraging and empowering to stick to our budget, stick to our goals. And I guess that's a great way to talk about, you know, what's important to me. And, um, I'm a mother of two little girls. Um, my husband and I have been married for over 12 years now. And, um, our youngest is 10, excuse me. No, that's not right. My oldest is 10 and my youngest is nine. You know, they're like 10 going on 20 and nine going on 18. Yes. I'm sure you can relate. Yes. Uh, but what's really interesting about that is, you know, over the last few years, being intentional with everything that we do is really important. Um, being present, um, while I'm here working, um, in a professional setting, but also being intentional, uh, with my family is something that's incredibly important to me, which has led us to our different activities.

Speaker 2 (02:34):

Uh, we are big time, uh, outdoorsy folks. Uh, we're big campers. We love to travel. Um, and we too, you know, I know you're, you're familiar with all things social and we, we really have leaned into telling our story for other families through YouTube channel. And that's something that's really important to us. And part of that, you know, within our journey is, uh, would've been, would not have been possible without really identifying, um, how we can make that possible through our own decisions that we make each and every day with our finances. And I know a lot of things we'll be talking about today are primarily the difference between a credit union and a bank. And I've actually worked at both. Um, my, my experience here at the credit union, like I said, has been a little over 10 years. Um, but overall in finance and community banking is right at knocking on 16 years.

Speaker 2 (03:23):

And, um, one of the things that I will tell you and that's significantly different is that here at our credit union at Centric, our members are known by their name. Um, they're known by their goals. Mm-hmm. What are they wanting to achieve for themselves, but also what are they wanting to achieve for their family? And we, we lean into that. What is our mission here at the credit union. It's genuinely to help our members live better, you know, with a bank, their board of directors, um, their shareholders. They're the ones that really reap the benefits. Um, at a credit union, our members are the ones that reap the benefits. Mm-hmm. Reap the dividends. They reap the lower loan rates and the opportunities for loans that they may not have ever received at other financial institutions. Um, our board of directors are volunteers.

Speaker 2 (04:13):

They're not paid. Um, so that means they're, they volunteer their time to oversee the wellbeing for our members, and that's who our owners are. We're not answering to just say, 10 or 12 shareholders. We're answering to, you know, nearly 40,000 members who are our shareholders. So each and everything that we do, um, whether it's a new digital touchpoint for members to engage with us virtually, or whether it's, you know, um, a new location that we may begin to build or a new city that we want to impart, you embark upon, we still think of the personal touch and how we can impact members for the better. And if it doesn't line in and really line up to what our mission is to help our members live better, then it's probably not the best decision for us. And, and being able to be a part of that decision making and, uh, just keeping our members first and foremost is, is probably the driver of why I'm still here. <laugh>.

Speaker 1 (05:10):

Yeah. That, that's really good to hear. And you know, one of the reasons why I wanted to talk about this today is because if you type in credit union in the search on YouTube, the very first thing that comes up, the most search topic about a credit union on YouTube is credit union versus bank. And people just don't know. Adults don't know. Teenagers don't know. Um, they know there's a difference. They don't know what it is. And so I just think it's really important, um, for our listeners to know, Hey, this is what we do. This is how we're different, this is how we're set apart. And so I really am glad that we're talking about this today. So one question that I have for you is, is there anything that a bank can do that a credit union cannot do?

Speaker 2 (05:57):

Absolutely not. And if you ask that question the opposite way, is there anything a credit union can do, um, that a bank cannot? There are differences, primarily when you're thinking of, um, you know, we do commercial lending. Um, but one of the neat things about us, and you think about too, people say, oh, well, you're just a credit union. You only serve a certain population or in a certain area. Well, we are a part of, we as Centric are a part of a, uh, shared branching, which is a cooperative network that allows us and our members to bank anywhere they want to through a shared branching partner. So you think about big, huge mega banks like Bank of America and Chase, who have, you know, four and 5,000 retail locations. Because we're a part of our cooperative shared branching network, we have access, we as members have access to over 5,000 locations and over 40,000 ATMs that are right there at our fingertips.

Speaker 2 (06:59):

You know, and when you are working with, and you're, you're using your live better accounts, any ATM is really your ATM when you qualify. So something to, to genuinely think about. I will ask our listeners to think about it like this. Um, when was the last time your bank gave you a chance to vote on fees or the board of directors that serve you or make decisions on your behalf? That's right. They don't. Yeah. Right. That's right. Uh, maybe through a survey through their expectations of their service and things of that nature, or what products and services maybe that you're in, you know, inquiring about. But I don't think that your bank is really asking questions, um, about how do you feel about these fees, right. That you're being charged. Um, but at a credit union, we have an annual meeting that each and every shareholder and you as our member, you're a shareholder, you earn a vote at the credit union, and you're invited to an annual meeting that happens once a year.

Speaker 2 (07:59):

Um, it's usually held within the first eight to 10 days within the month of March. And, uh, you have the opportunity to vote on your board of directors. Um, you have a say. If there's things that you want to bring up, you can certainly do that. Um, these are neat things that people don't realize that you're empowered to make the changes that you want to see as a member. And at a bank, you just genuinely don't have that decision, you know? Um, we are here in at Centric, we talk through about relationship lending and relationship banking, and you'll hear people talk about a lot of times, you know, it's like, oh, you know, you're not, you're known here as the name, not a number. We don't care about your amount of deposits and so forth. I will say this, um, here at our credit union, you will see the most diverse population, which we are so incredibly proud of.

Speaker 2 (08:53):

Um, the people here, our employees that we serve. Uh, we come from all different backgrounds. And I think that is something that is incredibly reflective of who we are and who we wish to be. Um, many of us have been faced with our own financial hardships, and we too have used the products and services, and included with that is financial counseling to overhaul our finances. Uh, we've lived through those experiences and we'll tell you about it. Um, and so if anything, you know, when you come in and visit with us, you will, nine times outta 10 find someone who has experienced a hardship that you are currently facing or that you've overcome. And we like to highlight your story, you know, and, and talk about things that you've overcome. And if we've assisted you in that matter, we wanna hear about it. You know, we here wanna celebrate those kind of things.

Speaker 2 (09:42):

I would just ask our listeners to ask, what has your bank really done for you lately? Are they paying you? I don't know, uh, you know, that's a good question. Um, and is there ever a time where you've asked if, you know, Hey, are there ways that we can negotiate a rate my credit score's improving, um, how does that impact my loan? I don't think your bank's calling you and asking you if they can save you money. Right, exactly. Cause that impacts their pockets. Yeah. Um, but those are things that we genuinely try to do. Um, when members are, you know, we notice that there are credit scores improving and they have a loan with us, there's opportunities in which we can save them money throughout the overall loan.

Speaker 1 (10:21):

That's good. That's good stuff. Um, that a lot, like I said, that a lot of people don't know. And so I'm glad that you touched on all that, because I really want our listeners to, to see the clear difference between being a member here at Centric and being a customer at the bank. Because that's, those two terms basically define, you know, the major differences between the two here. You know, you have the privilege of having a say you have a vote, you have a seat at the table. Um, you, you have complete control over, you know, the things that you do here. And then, you know, not quite so much at a bank mm-hmm. <affirmative>. Um, so I think that's really important, um, that our listeners understand that. Um, another thing I wanted to mention, um, is do you think that, um, credit unions tend to be a little more community focused and community based, um, than banks do?

Speaker 2 (11:12):

You know, in our region, I, I will have to say this, as far as being focused in the community, our community banks and credit unions alike do a really great job of supporting, um, local entities, uh, organizations and schools. Um, so one thing I would say, you know, you, you might necessarily see from a, in a different geographical area where you may see there's a big difference between how the, uh, credit unions are serving the community over a mega bank. Um, one of the things that, uh, I'm always kind of challenged with whenever I, I think of how are, how are ways in which we might be able to impact the community in a different way. I won't say that one does it, uh, greater or less than the other, but what I will say is that centric is different. Uh, we have kind of, if you will, over the last maybe decade, we've kind of shifted our focus to more, uh, becoming more financially aware of the circumstances that our community is really faced with.

Speaker 2 (12:15):

Um, we have taken information from United Way and just overall, uh, national data from census and so forth to help us understand the number of folks that are impacted by poverty. Um, those that who, um, are one, really one emergency away from poverty, and what can we do about that as a financial institution. And it is genuinely through partnerships with local organizations, um, really schools, universities, and local employers to offer financial education. And we do that right at the workplace. Right at the school. You can do a financial deep dive through your credit report, open an account, apply for a loan, all of those things, right. You know, on site there. You don't have to come to one of our locations or do it online. You can meet with us face-to-face at your institution or even at your employer. And I would say not, I, I won't say that we do things better or community banks do things better than us, but I think we're different in the fact that we are incredibly specific in how we serve the community. Um, we are, it's incumbent upon us to serve our members as well as our community. And anything that we know that can help empower them, um, really provide hope to their economic situation, it's, it's incumbent upon us to do that. And we take that as a, a real responsibility.

Speaker 1 (13:45):

Yeah. I like that a lot. And I've seen that just since, in the short time that I've been here, how completely immersed in the community that Centric is and how that's something me personally I haven't really seen before. Okay. And, you know, I moved here from a different community a few months ago, and that's something that I had not seen before coming here. And so it's been really interesting to me to get to see, okay, these, this is a really large group of people who, who care about the community that they're living in and are trying to help people thrive here. And it, it makes a difference, you know, when people know that their financial institution believes in them and, and wants to see them come up and do better and do well for themselves. I mean, it makes a big difference in the community.

Speaker 2 (14:30):

Absolutely.

Speaker 1 (14:32):

Um, can you tell us a little bit about the difference between the FDIC and the NCUA? Because I think to a lot of people, those are just letters. So what exactly does that mean?

Speaker 2 (14:42):

Yeah, so basically, and, and this is a great, great question and it's something that I kind of wanna take in regards to like digital payments platforms and really talking about that. Is your money genuinely safe? So we are stating that through the, you know, the, the insurances that we're saying that we are insured through the National Credit Union Administration that is similar to FDIC that governs banks. We are a highly regulated institution, just like your, you know, uh, any community bank or mega bank. Um, one thing I will say, and this is something people genuinely don't realize, but when you think about your PayPal and you think about Venmo and your Cash app, even your Starbucks app that you've uploaded funds to, um, what, what is happening? What would happen if someone were to tap into that and say, you know, your information has been shared and now your money's gone.

Speaker 2 (15:41):

What's, what's gonna happen? Your funds are not secured. That's right. Um, you know, we have, you know, to our membership, you know, it's a $250,000 insured amount that we provide to them through our, you know, the relationship we have through the NCUA. And I think it is incredibly important that we ask those questions. Yes. Are those payments platforms very easy to use? Sure they are. Um, but I would ask, does your financial institution offer some of their own? We're a part of Zelle, um, we can move money around to individual to entity very easily through that payments platform. And one of the things that you have with that is there are things like disputes when say maybe there's fraud that occurs through those transactions. Who are you gonna call when you've got a transact a, you know, and discuss a fraudulent transaction through Venmo, the cash app?

Speaker 2 (16:31):

And um, you know, you talk about Green Dot, you have all these different payments platforms. I think it's important for us to ask the question, how is the relationship with those digital platforms, how is that impacting me for future buying power? And a lot of, um, I would say your Gen Y, your Gen Z, you know, the younger demographics sees these payments platform as an opportunity to exchange funds really quickly. You know, they get, parents can upload money to them very easily and they can transact at different institutions or pay someone else, you know, for whether it's mowing their grass or you know, haircuts, whatever it might be. But it's, it's really in it. I hope everyone understands the severity in understanding that if that money is gone, you know, you're not gonna be able just to call up an institution like you would at Centric and say, Hey, here's, here's what has occurred.

Speaker 2 (17:30):

I did not complete this transaction. You know, at Centric, you've got someone fighting for you. Who are you gonna call? You know, you may get into involved in a chat with someone online, you know, and who is that person? Um, what, what benefit do they have to really, you know, recuperate those funds back to you, you know, recoup those funds to you? I don't, I don't, they don't have a vested interest, and it's just a quick little payments platform. But I would encourage us to think about, ask yourself the question. If you're buying a brand or you're, you know, buying from a location or you're using certain payments platforms, who are they supporting? Um, you know, who owns them? What, what are, what is their overall mindset? What are their values? You know, what do they stand for? And if those are things that you don't believe in and things that you don't wanna support or things that you're like, no one's being transparent with me about it, there, ask the question.

Speaker 2 (18:32):

You know, we need to become more aware of, you know, where things are coming from, where, you know, how's this impacting, you know, the overall greater good. I think it's important for us to genuinely ask those questions, but when you really get down to, um, I would be concerned over how the funds are really protected through those digital payments platforms. That's a huge question to ask. Um, when we pay you just to have an account here and use your account, um, in some cases, you know, we're paying, you're not, you're not at risk of losing your funds with that. Right. And, um, by being a member here at Centric, you know, we we're, a lot of us are members of a lot of things from, its being a Sam's Club member, Amazon Prime. I mean, you think of all of these different, um, you know, different brands and so forth that you might have a relationship with, but we're not increasing our fees for you to be a member here with us.

Speaker 2 (19:26):

Um, there's no annual fee to participate. There is a one time lifetime fee that you pay, um, and there's no more. You're a member and that's it. And, and so those are just things that when you, um, you can't really compare, you can't say that credit unions and community banks are apples to apples cuz we're really not, um, the way in which that we serve people, we look for ways that we can serve them. And if we're unable to complete, say a loan transaction or, um, maybe we have to put a deposit on hold or something along those lines, we, we wanna look and dive a little bit further without just saying no to you. Or, hey, we can't provide access to this. Let's talk about why are there some things we can do to figure out how we can make this possible? And I, I think everyone wants to have a little bit of hope and knowing what they can do next. So I, I'm a huge, a huge believer of the credit union. Um, like I said, I, I've been in finance right at 16 years, 10 of those years have been spent here at Centric. And, um, there's no other choice in my opinion. Mm-hmm.

Speaker 1 (20:32):

I completely agree with you. Um, we've shared a lot of important information, um, on this episode. Is there anything else that you'd like to add before we wrap up? Did, did I miss anything?

Speaker 2 (20:43):

I think you covered it all, Emma, but I appreciate though that you, you're sharing the difference of, you know, regions and locations from where you've currently lived, um, or spent some time. And it's important to note, you know, who you see as, uh, the credit unions or financial institutions who's supporting your kiddos, you know, baseball, softball, football league, you know, who's, who's really involved in that, but more so, you know, who's providing that micro loan to a, you know, single mom who's starting her business for the first time. Right. Um, and, and that is something we pride ourselves on. Um, we've got some really neat, interesting things that we'll be talking about to just highlight our business owners. And I hope that everybody will stay tuned for that as we continue to talk through it. But there's a lot of things worth, it's celebrating and if you ask 'em who's helped provide that first lawn for maybe their vehicle, uh, very first vehicle, you know, they've ever had, or the first home that they were bringing their child home to, you know, you think about those things and a lot of times you'll hear them say, you know, Centric made it possible, but more so than that, they have a name to their, their banker, if you will.

Speaker 2 (21:47):

They haven't named that person. Um, many times we hear Kathleen, Jennifer, Jolene, you know, Laura, these people who've made it possible for their families to take it to the very next step. And that's a story worth telling.

Speaker 1 (22:02):

It is. And then when these people come into the centers that they ask specifically by name Yep. For the person that we, and I mean, that's, that's a huge deal. That just doesn't happen everywhere. That's right. And I think that is just wonderful.

Speaker 2 (22:14):

Yes, I agree. Couldn't agree more. Yeah.

Speaker 1 (22:17):

Well, thank you so much. I think our listeners are really gonna learn a lot from this episode.

Speaker 2 (22:23):

Good. I'm glad. Thank you so much for having me. Um, it's always a pleasure to be a guest here, and I just appreciate all that you guys are continuing to do through this podcast.

Speaker 1 (22:31):

Thank you so much, Kelly, for being here today. I hope all of our listeners were able to learn about the differences between a credit union and a bank. Thank you for listening to our podcast and tune back in next month for another episode of the Live Better Podcast by centric Federal Credit Union. Don't forget to subscribe on your favorite podcast platform to ensure you never miss out on helpful tips like us on Facebook at Centric Federal Credit Union, and find us at MyCentric on Instagram, Pinterest, TikTok, and YouTube. You can find more information about today's topic, our monthly blog and more@mycentric.org. Centric is federally insured by the NCUA.