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Iowa credit unions are committed to serving their members and providing reasonable financial products and services to them. The differences between not-for-profit credit unions and for-profit banks are illustrated below:
Credit Unions are Different from Banks
Iowa Credit Unions
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Iowa Banks
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| Not-for-profit, member-owned financial cooperatives. Each member owns the credit union. |
For-profit institution. Owned by a few stockholders. If a customer doesn't own bank stock, he or she is not an owner. |
| Volunteer board of directors who are members of the credit union and users of the credit union services. |
Board of directors who are paid. They may not be from the community or even use the bank’s services. |
| Excess earnings after reserve requirements are met are applied to lower interest on loans, higher interest on savings or development of new products and services that members have requested. |
Profits are paid to stockholders. |
| Self-governed. Each member has one vote in the election of the board of directors regardless of how much money the individual has deposited in the credit union. |
Only stockholders vote for the board of directors, based upon the amount of stock owned. |
| State-chartered credit unions pay sales, moneys and credits tax, property and employer-related taxes. Federally-chartered credit unions pay property and employer-related taxes. |
Pay corporate income taxes on earnings, although there are many Iowa banks that do not pay taxes at the corporate level under Subchapter S of the IRS Code. |
| Hold less than 10 percent of the market share of deposits in Iowa. |
Hold more than 90 percent of the state’s market share of deposits. |
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Membership is comprised of only those who share a common bond, which include where they work, live or worship.
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Banks have no restrictions on who they serve. |
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