By: VyStar President/CEO Terry R. West
According to the National Credit Union Association (NCUA), credit union membership across the nation reached an all-time high of more than 101 million in 2015. VyStar also saw a strong membership increase in 2015: We were serving a record 512,000 members with assets of almost $5.7 billion by the end of January 2016, and that number is still steadily growing. Despite the increasing popularity of credit unions, some myths about how credit unions operate remain, making some people unsure about becoming a credit union member. Because VyStar strongly believes in educating current and potential members about the credit union difference, here are some facts and information that will hopefully dispel some of the misconceptions that members and nonmembers may have about VyStar and the credit union industry.
FICTION: Credit unions do not pay taxes.
FACT: Because credit unions are not-for-profit—meaning our profits are returned to our member-owners in various forms, including lower loan rates and lower fees—many people are under the impression that credit unions are exempt from paying taxes. This is simply not true. Because of our not-for-profit status, credit unions are exempt from paying federal income taxes and, in some states, state sales taxes. However, credit unions do pay other forms of taxes. These include real estate, personal property and employment taxes. State chartered credit unions, like VyStar, are also subject to Unrelated Business Income Tax (UBIT); federally chartered credit unions are not.
FICTION: Credit unions are not insured or regulated.
FACT: It is true that credit unions are not insured by the FDIC like some banks are, but this is not to say that we are not insured. Most credit unions are part of the National Credit Union Share Insurance Fund (NCUSIF), which provides the same federally guaranteed coverage for credit unions as that provided to banks by the FDIC. At VyStar, the total deposits in your accounts are insured up to $250,000. (Note: Certain accounts, like IRAs and trust accounts, are insured separately. Additional coverage for multiple accounts can be attained with different ownership interests or rights in different types of accounts if account forms and applications are completed properly.) This means that the money you deposit into your credit union, insured by the NCUSIF, is just as safe as it would be if it were deposited into an FDIC-insured bank. As not-for-profit institutions insured by the NCUSIF, credit unions are also strictly regulated by the NCUA. State chartered credit unions insured by the NCUSIF, like VyStar, are regulated by their state regulatory office and the NCUA. Both are meticulous about ensuring that members’ money is not at risk.
FICTION: Credit unions have too many membership restrictions.
FACT: It is a common misperception that credit union membership is only open to very specific groups of people. In their early years, a lot of credit unions did place restrictions on membership. In some credit unions—for example, those that serve only select employee groups (SEGs)—this is still true, but many credit unions have broader fields of membership today. When VyStar, formerly Jax Navy Federal Credit Union, was chartered over 64 years ago, we served civil service and military employees and their families. Today, anyone who lives or works in any of the 21 counties we serve is welcome to become a member. It only takes a few minutes to join online or in person, and you only need to keep $5 on deposit in your savings account to keep your membership active and take advantage of all the benefits your credit union has to offer.
FICTION: Credit unions have fewer locations than banks.
FACT: Many small to mid-size credit unions do have fewer branch locations than commercial banks. However, that is not always the case and can vary from the small single-branch credit union to the large credit union with a national network of branch locations. Currently, VyStar has 38 branch locations throughout Northeast Florida. To better serve you, it is our goal to open new conveniently located branches and ATMs each year from Northeast Florida to Central Florida. We also introduced many new ATM locations, reaching a grand total of 191 ATMs to date in 13 counties across Northeast Florida. The remainder of 2016 will be host to even more branch, ATM and high school branch openings.
Convenience for our members is more than branch locations and ATMs; it also includes accessible online services. Our new Internet & Mobile Banking system has fresh, innovative features that make money management simple and accessible when you are on the go—no matter where you are. As your credit union, we never forget that it’s your money.
Thank you for your continued membership and loyalty.
The content provided in this blog consists of the opinions and ideas of the author alone and should be used for informational purposes only. VyStar Credit Union disclaims any liability for decisions you make based on the information provided.