Credit unions and conventional banks offer similar services, but there are some real differences that make choosing between the two—especially if you work in cannabis—very important.
Matt Vance, First Vice President, Marketing & Product Strategy
Where do you keep your money? If you work in the cannabis industry, it’s pretty common to be paid in cash. But squirreling away cash at home isn’t a great option, especially when you’re trying to save up for the future. Here are some thoughts on traditional banks and credit unions. Knowing what they offer can help you keep your money safe and simplify your daily life.
Credit Unions vs. Traditional Banks: What’s the Difference?
Credit unions are not-for-profit financial institutions owned by their members. Credit unions offer many of the same services as for-profit traditional banks, including savings and checking accounts, credit and debit cards, auto loans, and home loans. However, they often provide these services at lower fees and with more competitive interest rates. In order to bank with a credit union, you must become a member. Membership eligibility is based on certain criteria, like your place of residence, employment, or affiliation with a specific organization or community. At Salal, we strive to maintain an inclusive environment and all are welcome to apply for membership.
While traditional banks typically don’t have specific membership requirements, credit unions are known for offering lower fees and more competitive interest rates on savings and loans compared to banks. That means higher earnings on your savings and lower borrowing costs. Traditional banks often charge higher fees for various services, such as monthly maintenance fees on checking accounts or ATM withdrawal fees. Interest rates on savings accounts and loans may also be less favorable compared to credit unions.
Both banks and credit unions are required by the federal government to have insurance that protects their customers’ deposits. Credit unions are insured by the National Credit Union Administration (NCUA) in the United States. NCUA insurance provides the same level of protection as the Federal Deposit Insurance Corporation (FDIC), which insures traditional banks.
Advantages of Credit Union Membership
One of the key distinctions between credit unions and traditional banks is ownership. Credit union members are also owners. If you’re a member at Salal, you have a say in how we operate and what we do. That type of personalized banking experience is rarely found at larger, traditional banks where the motivations of profit-driven shareholders often take precedence over customer concerns.
Traditional banks have invested heavily in technology to offer services like online and mobile banking platforms, but that investment has proved to be detrimental to their customer experience; it is often now a difficult and confusing task to figure out how to talk to a real person about your finances. Credit Unions, like traditional banks, have invested in technology and many—including Salal—now offer online banking with the convenience of mobile apps and other digital services. The difference is that Salal members enjoy the advantage of easy access to their account managers via phone or email, and it is simple to schedule in-person or online meetings.
Salal and Cannabis: Stress-Free Banking
Another major difference between traditional banks and credit unions is their willingness to work with the cannabis industry, both in personal and business banking. Most traditional banks won’t work with cannabis industry employees or companies, or if they do, they won’t publicly promote it. This creates exclusion that impacts critical personal financial goals—like the ability to make a large purchase or own a home—as well as business banking.
At Salal, we offer cannabis industry professionals and cannabis businesses the opportunity to bank worry-free. What do we mean by that? We mean that you don’t have to hide the fact that you work in the industry or fear that you might have a critical loan application rejected once it’s clear your income comes from the cannabis industry. While not all banks will close your account once they find out you work in cannabis, it’s still an unfortunate risk that happens all too often.
Serving the Traditionally Underserved
Credit unions were established to work with underserved communities. Historically, this meant groups of individuals or communities that didn’t have access to banking. Credit unions like Salal fill the gap by offering those services to professionals in industries—cannabis is a prime example—that traditional banks often refuse to touch. Since 2014, we’ve worked with cannabis businesses and their employees—over 1,600 businesses and counting. We believe everyone working in the regulated cannabis industry has the right to financial services.
Bank worry-free at Salal. Our experienced cannabis financial experts have a wealth of industry knowledge that can empower you to maximize your financial resources and establish a secure financial future. Reach out today.
