Dollars & Sense

Why Credit Unions Can Withstand Tough Economic Times

Written by Peach State Federal Credit Union | May 1, 2023 4:00:00 AM

While a credit union may look like a bank, there are several key factors that differentiate the two. Credit unions are formed by people with a common bond, built around a cooperative structure owned by its members with a mission to serve people.

When economic uncertainties arise, credit unions are no strangers to helping people overcome difficulties. In challenging times, the cooperative structure offers the opportunity to do what they do best – serve their members’ needs, especially those who may not have to access traditional financial services.

Aren't Credit Unions the Same as Banks?


Credit unions offer similar financial products and services to banks. The key differences between a credit union and bank are in their business models, how they are governed, and who they provide financial services to.

Staying True to Principles, Purpose and Philosophy


Credit unions are not-for-profit, financial cooperatives that advocate for financial education, smart saving habits, and sound credit use. Earnings earned above expenses are returned to members in the form of lower loan rates, higher savings rates, and lower fees. 

Banks are for-profit institutions aimed at maximizing profits for stockholders. They generate profits by charging higher interest rates on loans and numerous fees. 

Stewardship vs. Management


As financial cooperatives, credit unions are owned by their members. They are governed by a volunteer Board of Directors elected by its members with the purpose of acting on behalf of safeguarding the credit union and its members. 

Banks are for-profit financial institutions governed by a paid, elected Board of Directors chosen by stockholders. They are legally bound to make decisions in favor of their stockholders, not customers. 

Member-Owners vs. Customers - There's a Big Difference


Credit unions provide financial services to their members-owners who have an equal stake in the institution. This is drastically different than being a customer of a bank because banks are owned by stockholders and investors. Unlike credit union member-owners, customers do not have equal ownership in the institution.

As a member of a credit union, you’re more than a member, you’re an owner. This means you have an equal stake in the organization. Being a member of a credit union shows that you care about the financial well-being of your family and community of today and tomorrow.

Untapped Resources


When the world is navigating through stormy economic periods and people are living their lives under waves of challenging times, most are unsure where to turn to for help. Credit union members have an advantage in these times because organizations that align their mission and purpose to the needs of their members, rather than shareholders, have the ability to help them weather the storm.

The cooperative structure of credit unions not only governs the organizations' business operations, it allows them to lift up their members; instead of delivering profits into the pockets of stockholders and investors. 

In times of uncertainty, credit unions look inward to streamline processes and improve organizational functions that will lower costs to benefit of their members. These cost-saving efforts are then passed along in the form of special lending programs offered at lower interest rates, higher returns on deposits, and financial education resources to help families adjust their financial well-being for success. 

Stable, Secure, and Always Here for You


At Peach State, we don’t take stability and security lightly. You can trust that your money is safe knowing that we have your best interests in mind because your funds are backed by federal protection through the National Credit Union Share Insurance Fund and Excess Share Insurance Corporation for a combined coverage of up to $1,000,000 per depositor.

As a financial cooperative, it’s our mission to meet the needs and exceed the expectations of our member-owners, not profits. Originally founded in 1961 as Gwinnett Teachers Credit Union, we currently serve 85,000+ members throughout Georgia and South Carolina. 

When you need a trusted, local financial institution to serve your banking needs, you can depend on us because we’ve been serving our community’s needs for over 60 years! We know you have many options when it comes to your finances and we are grateful to you for allowing us to serve you and your family’s needs. Learn more about who are and why we do what we do for our members at peachstatefcu.org/about-peach-state-federal-credit-union