Credit Union Myths
Forget what you’ve heard about credit unions—here we debunk some of the most common misconceptions so you know what credit unions are and what they are not.
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Fact– All credit unions are federally insured by a fund that, like the FDIC, is backed by the full faith and credit of the U.S. government. The National Credit Union Share Insurance Fund (NCUSIF) is administered by the National Credit Union Administration (NCUA), an agency of the federal government.
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Fact– People should not be discouraged by a credit union’s name! While it is true that credit unions were once restricted to people with a “common bond” (such as employees of Oak Ridge National Lab), it is now easier than ever to join most credit unions! Many credit unions, including ORNL FCU, have community charters, allowing them to serve anyone who lives, works, worships, or attends school within a defined area.
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Fact– Many credit unions offer business loans, including ORNL Federal Credit Union. ORNL FCU offers various types of commercial products, including lines of credit, construction loans, business real estate, and deposit services.
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Fact– As the largest credit union serving the Central East Tennessee community, ORNL Federal Credit Union is proud to offer convenient services to our members. With branch locations throughout East Tennessee, a vast network of surcharge-free ATMs available world-wide, and Online Banking and mobile apps available free of charge to all members, convenience is one of many great benefits of ORNL Federal Credit Union membership.
ORNL FCU currently has branches in Anderson, Blount, Campbell, Knox, Loudon, McMinn, Meigs, Monroe, Roane, Sevier, and Union counties.
ORNL FCU has ATMs located throughout East Tennessee that are available for member’s use 24 hours a day, seven days a week. Plus, by using the over 30,000 ATMs that are part of the Co-Op network, members have greater access to surcharge-free ATMs than ever before!
Members can connect to their ORNL FCU accounts anytime, anywhere using our free Online Banking or Apple or Android apps. Convenient access is always just a click away!
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Fact– While it is true that an initial deposit of $1.00 is required to open a base share account at ORNL Federal Credit Union, members with a Credit Union account are part-owners of ORNL Federal Credit Union. Members have an equal voice in voting for the elected volunteer Board of Directors, who in turn provide the strategic direction of the organization. Should a member choose to close their Credit Union account, their original $1.00 deposit is returned.
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Fact– While credit unions offer many of the same services as banks, the two kinds of financial institutions are fundamentally different. Banks are for-profit businesses that exist to make profits for their shareholders. A credit union is a not-for-profit financial cooperative, owned by its members, governed by a volunteer board of directors elected by the membership, and staffed by financial service professionals. Members pool their savings, make loans to each other, and have access to other financial services. Excess earnings that are not used to strengthen the credit union capital are returned to the members in the form of higher rates on savings, lower rates on loans, and improved services.
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Fact– Credit unions must pay property, local, and employee taxes, but as a not-for-profit cooperative, credit unions are exempt from paying Federal taxes, as all earnings are returned to its members in the form of better rates and fees.
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Fact– Many credit unions are full-service financial institutions, offering comparable, if not better services, than banks. At ORNL Federal Credit Union, members enjoy a wide-array of financial services, including CDs, loans, savings, checking accounts, business lending, credit cards, online banking, and much more!
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Fact– Historically, credit unions have been more stable than banks and this fact has been consistent even throughout the course of the economic downturn. As a whole, credit unions are healthy, with strong balance sheets. Credit unions are well capitalized with solid overall capital-to-asset ratios. In recent times, credit unions have experienced relatively low delinquency rates and lower loan net charge offs than that of the nation’s banks.
Credit unions are lending responsibly as they operate more conservatively and have high asset quality and high capital ratios. According to the Credit Union National Association (CUNA), savings at credit unions grew even during the economic turndown. This is because more people are seeking to put their money in a stable source offering good rates and are therefore turning to credit unions to do so instead of banks.
