What Is a Credit Union—and How Is it Different From a Bank?

iStock/sshepard
iStock/sshepard

Between the 2008 financial crisis and the recent Wells Fargo fiasco, consumers have grown distrustful of banks and are considering credit unions as an alternative place to park their cash. Just like banks, credit unions accept deposits and make loans—so how, exactly, are they different?

For one, they have a democratic history. The first credit unions were established as cooperatives, meaning the people who kept their cash in the credit union also helped manage it—and they still operate this way today. As such, you are treated as a member, not a customer, and have the right to vote on a board of directors. Typically, personal finance expert Tal Frank tells mental_floss, membership often means you can expect better service at a credit union than at a big bank.

“However, if comparing a credit union to a community bank or a small local bank, you will probably find that you get a high level of service at both," Frank says. "The smaller guys try harder. They also have more of a personal connection with clients or members.”

Credit unions are also non-profit organizations. "So, unlike banks, they don't have stockholders who expect to receive a quarterly dividend payment," Timothy Wiedman, a retired associate professor of management and human resources at Doane University, tells mental_floss. "And without the need to pay stockholders, federally insured credit unions can benefit their members by keeping fees low.”

As Weidman says, because they’re non-profit, credit unions can use any excess earnings to offer customers lower rates and better financial products. “Most banks pay lousy rates of interest, have too many fees, charge too much for those fees, and charge too much interest when loaning money,” says Wiedman. “Virtually all federally insured credit unions beat most banks in nearly every one of those categories.”

But the fact that they're community-focused cooperatives doesn't mean credit unions are a free-for-all: They operate under certain rules set by an organization called the National Credit Union Administration (NCUA). In addition to setting guidelines, the NCUA also insures your funds (just as the FDIC—Federal Deposit Insurance Corporation—does your deposits at a bank).

Interested an opening an account? Credit unions are a bit more exclusive than banks. “In the olden days, one had to be an employee of a particular company or member of a certain group to join a credit union,” Frank says. “Over the years that distinction has eroded for many credit unions. Guidelines changed to include allowing membership for family, a specific occupation, or all those who live in a geographic area (even as large as an entire state). As an example, Delta Community Credit Union is the largest in Georgia. Although there are ‘membership eligibility’ guidelines, the guidelines are so broad that it is pretty much open to anyone.”

Many credit unions will expand their membership to people outside of an industry or area if you make a small charitable donation, too. The Pentagon Financial Credit Union, for example, is typically only open to military employees, but just about anyone can get a membership with a one-time $15 donation to Voices for America's Troops or the National Military Family Association.

If you’re looking for a credit union, ASmarterChoice.org is a good place to start your search. You'll need to vet the credit union carefully, as you would any other financial institution: Make sure they are indeed insured by the NCUA, and read member reviews on comparison sites like NerdWallet and Bankrate. If convenience is important to you, you’ll also want to check out their mobile and online banking options to make sure they fit your needs.

What Does 'State of Emergency' Really Mean?

Firefighters battle a state of emergency.
Firefighters battle a state of emergency.
Phonix_a/iStock via Getty Images

Local and state officials across the U.S. are declaring states of emergency in their efforts to manage the coronavirus pandemic. Some entire countries, including Italy and Japan, have also declared a state of emergency. But what does this phrase really entail?

Local and State Response

The answer varies a bit from state to state. Essentially, declaring a state of emergency gives the governor and his or her emergency management team a bit of extra latitude to deal with a situation quickly and with maximum coordination. Most of these powers are straightforward: The governor can close state offices, deploy the National Guard and other emergency responders, and make evacuation recommendations.

Other powers are specific to a certain situation. For example, in a blizzard, a governor can impose travel restrictions to clear roads for snowplows and other emergency vehicles.

Calling in the Feds

If a disaster is so severe that state and local governments don’t have the cash or the logistical ability to adequately respond, the governor can ask for a declaration of a federal emergency. In this case, the Federal Emergency Management Agency (FEMA) does a preliminary damage assessment to help determine whether the governor should petition the president for a federal emergency declaration.

When the declaration from the president comes through, state and local governments can get funding and logistical help from the feds. What makes a crisis a federal emergency? The list is pretty broad, but FEMA shares some criteria here.

Why Does Hand Sanitizer Have an Expiration Date?

Hand sanitizer does expire. Here's why.
Hand sanitizer does expire. Here's why.
galitskaya/iStock via Getty Images

The coronavirus pandemic has turned hand sanitizer from something that was once idly tossed into cars and drawers into a bit of a national obsession. Shortages persist, and people are trying to make their own, often to little avail. (DIY sanitizer may not be sterile or contain the proper concentration of ingredients.)

If you do manage to get your hands on a bottle of Purell or other name-brand sanitizer, you may notice it typically has an expiration date. Can it really go “bad” and be rendered less effective?

The short answer: yes. Hand sanitizer is typically made up of at least 60 percent alcohol, which is enough to provide germicidal benefit when applied to your hands. According to Insider, that crucial percentage of alcohol can be affected over time once it begins to evaporate after the bottle has been opened. As the volume is reduced, so is the effectiveness of the solution.

Though there’s no hard rule on how long it takes a bottle of sanitizer to lose alcohol content, manufacturers usually set the expiration date three years from the time of production. (Because the product is regulated by the Food and Drug Administration, it has to have an expiration date.)

Let's assume you’ve found a bottle of old and forgotten sanitizer in your house somewhere. It expired in 2018. Should you still use it? It’s not ideal, but if you have no other options, even a reduced amount of alcohol will still have some germ-fighting effectiveness. If it’s never been opened, you’re in better shape, as more of the alcohol will have remained.

Remember that sanitizer of any potency is best left to times when soap and water isn’t available. Consider it a bridge until you’re able to get your hands under a faucet. There’s no substitution for a good scrub.

Have you got a Big Question you'd like us to answer? If so, let us know by emailing us at bigquestions@mentalfloss.com.

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