Credit Unions Vs Traditional Banks
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Institution Affiliation
Credit Unions Vs Traditional Banks
Introduction
An alternative to traditional banks, credit unions are mutually owned cooperatives that accepts deposits and makes loans (Aliber, 2012). Many people have been utilizing traditional banking institutions when it comes to all financial matters. However, with the rise in banking fees coupled with other changes in the financial landscape, many consumers started to look for alternative means such as credit unions. According to statistics from the Credit Union National Association (2016), more than 3.7 million people within the United States joined one type of credit union or the other in 2015. With more than
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Unlike traditional banking institutions where members are just mere customers, credit unions are formed and owned by its members with the primary purpose of serving the members’ saving and borrowing needs (Fabozzi, 2015). This means that credit unions are not geared towards profit making objectives but are only supposed to be a means through which the members can obtain affordable and convenient financial services. As such, these institutions offer better services that corporate banks since the members needs are prioritized above anything else and their best interests pursued. Not being for-profit entities, members are able to derive additional benefits such as superior customer services and competitive rates due to tax-exemption. The end product is that with a credit union, the members obtain greater satisfaction than those who utilize traditional …show more content…
Although credit unions are non-profit entities, this does not necessarily mean that these institutions do not earn profits. However, such profits earned cannot be shared with the stockholders due to the non-profit nature of the credit unions. Therefore, rather than giving the members a share of the profit in literal terms, credit unions usually have annual bonus programs where members are able to receive perks in the form of bonus checks. In addition to the onus checks provided, credit unions also have fund security which gives its members great peace of mind. Federally insured credit unions ensure that the members do not have to worry about losing their money deposited with the institution since such funds are usually federally insured to a tune of at least $250, 000 per individual (Adams, Marshall, Masci, Martino, Garner, & Felts, 2014). Albeit not meaning that credit banks have no financial risk, it only aims to prove that the financial risk is no greater but just at the same level with regular banks. Hence, considering other services and perks that you can enjoy while investing your money, credit unions are definitely
When you graduate high school you have your choice of what kind of an education you want to get. You have your choice of going to a 4-year university, or a 2-year college. In order to decide you will compare the two and use the comparisons to come up with your final decision. Questions to ask yourself would be, what are you looking for in college, how do you want to learn, and how much money do you have to work with. Comparing University and Community college the first thing that comes to mind is the difference in price. Certain Universities are more expensive than others. The difference in price is because of the difference in price and size, also because of the difference in the educational program they have. The price for a University can also differ with whether or not you are going to live there. With a Community college the price will differ significantly. The difference in price strands for the difference in size, teaching and living. At a Community college you have a smaller campus, the curriculum is different and yo...
... banks in a time where the entire population is in a downfall is not a wise choice.
Citigroup is one of the most well known financial companies in the world. The company has been one of the pioneers of the business financial world. They have contributed in many contemporary ways in the use of banks, and many other financial systems. Citigroup was a representation of the financial market success of the United States, Wall Street, and the financial world. The company has more than 200 years of history, and had been receiving high credibility from worldwide customers. However, after the company’s merger of Citicorp and Travelers Insurance the company was put under new management. Following their boss’ lead, the corporation began to make decisions that were only made with the best interest of the maximization of Citigroup’s profits in mind. This eventually led to the Recession of 2008 and a very rocky road for Citigroup. The company’s actions were similar to that of Netbank, but the end results of the companies differed due to Citigroup’s size. The financial crisis of Citigroup could have been avoided had the necessary precautions been taken, had these provisions been taken it could have possibly helped to avoid the economic recession of the United States as well.
These affiliations are severe but they are resolvable. The Grameen Bank is a possible solution.
Graduate Research Paper: Credit Unions in the Financial Market Literature Review Knowing the history of credit unions and how they were originally structured, it is important to understand where credit unions will be going in the future. It is anticipated that there will be less than 3,000 credit unions in the next 25 years. This is down considerably compared to the more than 6,000 existing credit unions in 2015 (Strozniak, 2015). Competition for credit unions will continue to be other financial institutions and financial services providers, but there will also be competitors entering the market, such as peer-to-peer lenders and other fintech start-ups that will begin to take over some of the existing credit union market space (Strozniak, 2015). Consumer lending is a core line of business for credit unions and in addition to traditional competition, sophisticated start-ups are starting to impact the market in terms of unsecured loans, mortgages and business loans (Strozniak, 2015).
With economic costs increasing, many businesses are now requiring individuals to have a higher level of education and at least a few years of experience to receive fair employment. Since living expenses are increasing rapidly each year, minimum wage jobs are not making ends meet anymore. More and more people are thinking about enrolling in secondary and tertiary educational institutions just to make a comfortable living for themselves as well as their families. Now that several individuals are planning to enroll, they now have to select where to begin their continuous scholastic journey. Most of the individuals that are now enrolling in secondary and tertiary educational institutions has either recently graduated high school or has been out of school for years and need courses to be qualified for their jobs. The two most common options are community colleges and universities. Although they both have their benefits and shortcomings, they both offer the same diversities of knowledge. When deciding where is best to continue with a smooth transition, each individual should know that a community college and a university differ in
Tuition costs are continually rising and more and more high school graduate are considering other options to earn their degrees. The most effective route for earning a degree is attending community college before completing a four year degree at a university. I recently had to make this decision myself. In the state of Ohio, community college classes are all transferable to universities (within the same state). Therefore, classes offered at community colleges for a fraction of the cost are guaranteed to be considered equivalent to university courses when considered for a student 's degree. There are three main areas we can see benefits to this method, the price difference, the convenience of taking classes locally, and the long term benefits,
Community college and universities both serve great purposes. Community college serves a better purpose for those who are not mentally or educationally prepared to move on to a much higher-level education and those who have jobs. It’s also for those who do not want the social aspect or who wants more personal once on once attention in class. Universities are set out for those who achieved their high school goals and are ready to leave home and become more independent. It is similarly better for the college experience of dorm life and sport activities. It all depends on the individual student making the choice, their financial status, maturity level, and their overall wants during their college life.
There are many students who attend a two-year community college rather than the university. Why should students attend a two-year community college rather than a university first? For one reason, people attend a two-year community college because they are not ready to attend a four-year college and want to wait a little bit longer. Also, the students are quite unsure which colleges or majors that they want to study. Even more, some students have some problems in getting into a university such as; some students in high school who have failed their academic skills, or they have trouble facing the pressure from the university.
However, FNB should also weigh the strategic benefits and costs of both methods. For example, Lake City is known as a “union town”, so supporting IMU’s card check proposal would help the bank foster better public relations with the community.
Credit unions can be an alternative to banking fees. These institutions are owned by their members, and pass their savings onto their members. Credit Unions are classified as not for profit entity unlike banks that are guided by their stockholders. The draw back to these institutions, however, is the lack of choices. If you are a convenience base customer, these institutions would not be a good choice because the locations are not as convenient as the banks.
Although they are both a lot alike, there are many differentials of the two. Universities are known for having large campuses; consequently, resulting in large number of students in each class. While Universities can range from having 20-1000 participants at a time, community colleges usually have no more than 50 participants in a class. As a result of such a large class size, it is harder for a professor to be able to develop the one-on-one time with a student. Due to most co...
It is true, that Internet Banking is useful for customers as well as for the banks. On the one hand, it helps people have direct and quick access to their bank accounts, on the other hand, helps the banks to save costs. ‘Clearly, in order to conti...
A variety of groups are concerned in bank profitability for various reasons. The bank shareholders would want to know if the value of their investments is high or low. The investors also use current and past performance to predict future price of the banks’ shares traded on the stock exchanged. The management of the bank as trustee of the shareholders is evaluated and compensated on the basis of how well their decisions and planning have contributed to growth in assets and profits of their banks. Employees of bank also are concerned with profits, since their salaries and promotions are frequently tied to the profitability performance of their banks. Depositors use bank performance and profitability as indicators of security for their deposits in the banks. Finally, business community and general public are concerned about their banks’ performance to the extent that their economic prosperity is linked to the success or failure of their banks.
This is followed in section 5 by an analysis of the recent changes in the banking industry. With the development of the financial system, declining entry barriers and the deregulation of the banking industry make banks no longer the monopoly suppliers of banking services and reduce their comparative advantages which they usually hold in the past. Whether the reasons give rise to the existence of banks are still powerful will be examined here, while section 6 offers a way of considering whether banks are declining by looking at the value added by the banks. When the value added by banks is examined, banks are not a financial intermediation, which not only conduct the traditional services but also provide more diversified