what is a credit union


In the United States, credit unions are not-for-profit organizations that exist to serve their members rather than to maximize corporate profits. Like banks, credit unions accept deposits and make loans. But as member-owned institutions, credit unions focus on providing a safe place to save and borrow at reasonable rates. Unlike banks, credit unions return surplus income to their members in the form of dividends.

Favorable Rates and Customer Service

Fees and loan rates at credit unions are generally lower, while interest rates returned are generally higher, than banks and other for-profit institutions. Credit unions are democratically operated by members, allowing account holders an equal say in how the credit union is operated, regardless of how much they have invested in the credit union.

NCUA Share Insurance Coverage

Federally insured credit unions are regulated by the National Credit Union Administration and backed by the full faith and credit of the United States government. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 increased the share insurance coverage on all federally insured credit union accounts up to $250,000.

credit unions vs banks



Credit Union Myths

Myth #1 – Credit unions are not insured like banks are through the FDIC.

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.

Myth #2 – You have to be employed by a certain workplace to be a member of a credit union. 

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.  

Myth #3 – Credit unions do not offer commercial loans.

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.  

Myth #4 – Credit unions are not as convenient as national banks.

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 over 30 branch locations throughout Central 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, Hamblen, Knox, Loudon, Monroe, Roane, Sevier, and Union counties.  Of the 29 branches, 11 are in-store branches, offering extended hours, Saturday hours, and full teller and lending services available.

ORNL FCU has over 40 ATMs located throughout East Tennessee that are available for member’s use 24 hours a day, seven days a week.  Plus, by using other 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!    


Myth #5 – You have to pay a membership fee to join a credit union.

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 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. 

Myth #6 – Credit unions are just like banks.

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.

Myth #7 – Credit unions don’t pay taxes.

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.    

Myth #8 – Credit unions don’t offer the same services as banks.

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!

Myth #9 – Credit unions aren’t as stable as banks.

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.

With a net worth of 10.75% and a return on assets of 1.16%, ORNL Federal Credit Union is very strong, stable, and secure.
Credit Union Myths





Credit Union Myths






Credit Union Myths






Credit Union Myths