Credit Unions Are Always Looking Out for the Little Guy

Author:     Tuesday, September 02, 2014 12:00 AM

Credit unions have a wide variety of different advantages over traditional large national banks that shouldn't be ignored. Perhaps the biggest benefit is that they are always looking out for "the little guy." Rather than catering to individual clients with the largest bank accounts or fighting for the business of one large corporation or another, credit unions are focused on making the communities that they're located in a better place. This involves giving extra consideration to each and every member of that community who might walk through the door and need financial assistance in some way.


In order to see how credit unions are always looking out for the little guy, it's important to understand just how their larger counterparts operate. National banks are beholden to investors thanks to the fact that the vast majority of them are publicly traded. Investors, generally speaking, are concerned with one thing above all others: profits. If those stock holders aren't seeing an adequate return on investment, they're likely to take their money elsewhere.


Because of that idea, banks are traditionally very strict with regards to who they lend money to. If you don't meet a very strict set of requirements, you're not going to get that personal loan or mortgage that you so desperately need. A black mark that exists well in the past on your credit report could torpedo that personal loan application at a large bank, even though it was years ago. Banks are also commonly likely to institute bizarre and expensive fees to various account holders, regardless of the loyalty of those customers. All of this is in an effort to drive the biggest amount of profits possible and appease those all important stock holders for another quarter.


Credit unions, on the other hand, are not publicly traded companies. They aren't operating on a for profit basis in any way: they're "not for profit," which means that they don't have to answer to anyone but the community that they're located in. If the members of the community don't see any real value in a particular credit union and choose to do business elsewhere, that credit union will go away.


As a result, credit unions need to find ways to separate themselves from their larger cousins and also give back to the community in any way. This involves looking out for the little guy. When you go into your credit union and discuss loan options with a representative, you are truly the most important item on their agenda that day. Every loan application will be handled on a case by case basis. You don't have to worry about meeting strict requirements designed only to make stock holders happy. You will sit down and have an intimate, personalized conversation with a credit union employee who exists to help you on your road to financial prosperity.

Source: BFI