Most people think banks and credit unions are basically the same but they’re not. One is built to serve shareholders. The other is built to serve you.
In this episode of the Wallet Wisdom podcast, LMCU’s Brett Christiansen sits down with Patty Corkery, President and CEO of the Michigan Credit Union League, to unpack the key differences between credit unions and traditional banks. From member ownership and not-for-profit status to community-driven lending and financial education, this conversation reveals how credit unions empower their members and those in their communities when it comes to managing their money.
So what does all this mean in practice? If you’ve ever wondered how credit unions actually operate—or why they’re gaining ground in a system dominated by big banks—this is where things get interesting. Let’s break down the core differences that make credit unions not just an alternative, but a smarter, more community-driven way to bank.
Credit unions aren’t just another place to stash your cash—they’re member-owned, not-for-profit cooperatives that exist to serve their communities. Patty explains how credit unions originated during the Great Depression to provide loans when banks wouldn’t, and how that mission continues today.
“When you join a credit union, you become a member-owner—not just a customer,” Patty says.
Key Differences:
One hot topic Patty dives into in the episode is the federal income tax exemption for credit unions. Patty breaks down the misconception that credit unions don’t pay taxes—they do, just not federal income tax. That savings is reinvested into the community through:
The tax exemption allows credit unions to reinvest earnings directly into member services and local economies. According to recent data:
Patty and Brett further dive into some of the community impact programs that include:
First-Time Homebuyers: Real Stories, Real Impact
Brett shares heartwarming stories of LMCU members who finally heard “yes” after years of rejection from traditional banks. With down payment assistance and personalized support, credit unions are helping people build equity and stability.
“Your personal finances deserve a personal touch,” Brett says.
Auto Loan Refinancing: A Game-Changer
Did you know you can refinance your car loan? One LMCU member dropped their rate from 21% to just 2% thanks to LMCU and there are thousands of stories out there. Credit unions offer competitive rates and flexible terms that can save you thousands. Additionally credit unions offer services like LMCU that help you establish and improve your credit through free educational tools.
Tech-Savvy and Member-Ready
Forget the myth that credit unions lag behind in tech. Patty highlights how credit unions have evolved with mobile apps, instant payments, and robust cybersecurity—all while maintaining that human touch.
With all the member-focused benefits—like lower loan rates, financial education, and first-time homebuyer support—it’s easy to see why credit unions are gaining popularity. But one question still comes up often: Are credit union deposits as safe as those held in traditional banks?
Let’s clear that up. Just like banks are insured by the FDIC, credit unions are federally insured by the NCUA. That means your money is protected up to $250,000 per account category, giving you the same peace of mind and financial security you’d expect from any major financial institution?
“Credit unions are federally insured by the NCUA, which is just like the FDIC for banks. So when people ask, ‘Is my money safe in a credit union?’—the answer is absolutely yes. It’s insured up to $250,000 per account type, just like it would be at a bank.”
-Patty Corkery, President and CEO of the Michigan Credit Union League
Whether you bank with a credit union or a traditional bank, your deposits are protected—as long as the institution is federally insured. This protection ensures that even if your bank or credit union fails, your insured funds are safe.
Both the National Credit Union Administration (NCUA) and the Federal Deposit Insurance Corporation (FDIC) are independent federal agencies that insure deposits—but they serve different types of financial institutions.
| Feature | NCUA | FDIC |
| Who's Covered | Credit Unions | Banks and savings institutions |
| Insurance Limit | $250,000 per depositor, per institution, per account category | $250,000 per depositor, per institution, per account category |
| Insured Accounts | Share savings, share draft (checking), money market, CDs, IRAs | Checking, savings, money market, CDs, IRAs |
| Not Covered | Stocks, bonds, mutual funds, annuities, life insurance | Same as NCUA |
If you’re a Millennial or Gen Z-er, chances are you’ve already questioned the traditional banking system. Maybe you’ve been hit with surprise fees, struggled to get approved for a loan, or felt like just another number in a massive institution. You’re not alone—and that’s exactly why credit unions are gaining serious traction among younger generations.
Let’s be real: Gen Z and Millennials care deeply about where their money goes. They want to support organizations that reflect their values—think sustainability, equity, and community impact. Credit unions check all those boxes.
Unlike big banks, credit unions are not-for-profit and member-owned. That means profits go back into better rates, lower fees, and community programs—not into shareholder dividends.
“When you join a credit union, you’re not just a customer—you’re a co-owner,” says Patty Corkery, CEO of the Michigan Credit Union League.
There’s a myth that credit unions are behind the times when it comes to tech. Not true. Many credit unions now offer sleek mobile apps, instant transfers, and even AI-powered budgeting tools. They’re investing in fintech partnerships and digital upgrades to meet the expectations of digital natives.
Younger generations are navigating some serious financial hurdles: student loans, rising rent, and the dream of homeownership. Credit unions offer personalized support and financial education that actually helps.
From first-time homebuyer programs to auto loan refinancing, credit unions are saying “yes” when big banks say “no.” One LMCU member even dropped their car loan rate from 21% to 2%—that’s life-changing.
Credit unions aren’t just financial institutions—they’re community builders. They sponsor local events, support small businesses, and offer services tailored to the neighborhoods they serve. That local-first mindset resonates with Gen Z and Millennials, who value authenticity and social impact.
Let’s not forget trust. After growing up during the 2008 financial crisis and watching headlines about bank scandals, younger consumers are skeptical. Credit unions offer transparency, member-first policies, and a sense of security that’s hard to find elsewhere.
And yes—your money is insured. Credit unions are backed by the NCUA, just like banks are backed by the FDIC. Your deposits are safe.
With 60% of Michiganders already members, Michigan leads the way in credit union adoption. Nationally, the number is around 37%—and growing.
Established in 1970, the NCUA oversees the National Credit Union Share Insurance Fund (NCUSIF). It insures deposits at federally insured credit unions, also backed by the U.S. government.
Created in 1933 during the Great Depression, the FDIC was designed to restore public confidence in the banking system. It insures deposits at federally insured banks and savings associations, backed by the full faith and credit of the U.S. government.