If you’re a Michigan area resident, you have more than 125 commercial and community banks and 299 credit unions – with almost 4,000 branch locations – available for your banking needs. Finding the right financial support for your personal or business needs isn’t a quick decision. As you evaluate your choices in Michigan banks, it’s important to understand the differences between a commercial bank, a credit union, and a community bank.
Commercial banks such as Chase, Comerica, and Bank of America have a national presence. Commercial (or National) banks are federally chartered, meaning they are given permission to operate and are regulated by the federal government.
Most national banks, sometimes called ‘megabanks,’ are owned by stockholders. While national banks provide checking accounts, savings accounts, loans, and investment tools like money market accounts or certificates of deposit, they’re in business to make money for stockholders. The fees charged to maintain your accounts and the interest rates on your mortgage or business loan represent the bank’s profits. Although the bank is profit-driven, its customers are protected. Traditional bank deposit accounts like checking, savings, money markets deposit accounts and certificates of deposits at commercial banks are insured by the Federal Deposit Insurance Corporate (FDIC) up to $250,000. If the bank fails, you’ll get your money back. See more information here: https://www.fdic.gov/deposit/deposits/faq.html
Since most commercial banks have a strong regional presence, you may be able to develop a good working relationship with the team at a local branch. Many of the policies about rates and loans are created at corporate headquarters, however, which limits the local branch’s decision-making power, speed, and flexibility.
Unlike commercial banks, credit unions are non-profit organizations. They are owned by members who control the money put into the credit union and are typically led by a volunteer board of directors. Credit unions provide many of the same services as a commercial bank, but any profits are delivered back to members through more favorable rates or more services. Loans are only available to members and are funded by the credit union’s deposits.
Credit unions are smaller than national banks and are developed to serve a region, industry, or group of people. In Michigan, for example, you’ll find the West Michigan Credit Union, the Michigan Schools Credit Union, and the Alliance Catholic Credit Union. Credit unions are structured to serve their members through personalized service which can create a strong sense of community.
Because they are usually smaller and have fewer deposits than banks, credit unions may not offer as many services (like types of loans). Most have restrictions on the amount of unsecured money you can borrow. If a credit union is federally chartered, then deposits up to $250,000 are protected by the National Credit Union Share Insurance Fund. Some state-chartered credit unions are privately insured and unlike federally chartered credit unions are not backed by the full faith and credit of the U.S. government.
A community bank is a for-profit financial institution that is owned and operated locally. Most community banks are state-chartered and operate under state regulators, with federal protection from the FDIC of customer deposits up to $250,000. Some community banks are privately held, while others like Level One Bank are publicly traded on stock exchanges.
Many community banks in Michigan (and nationally) offer a full menu of services like national banks, including mobile and online banking. With services and deposit protection no different than national banks, why should you consider partnering with a community bank? Here are some important considerations—Level One Bank proudly offers these additional benefits to customers:
- Commitment to the Community. A community bank like Level One knows that their teams and their decisions have a direct impact on their neighbors. They recognize that helping customers achieve financial stability is essential to the community’s long-term success. The personalized attention you receive at every Level One branch, every time you visit, demonstrates the team’s commitment to serving you. We’re invested in the heart of Michigan and plan to stay here!
- Better Customer Services. State-chartered community banks face lower regulatory fees, which means they can offer more financial benefits to their customers. Level One Bank, for example, offers free ATM access nationwide when you have a Level One Bank checking account and a free checking account option. Customers also have access to free workshops about improving credit, buying a home, and buying a car.
- Collaborative, Timely, Flexible Lending to Small Businesses. Our knowledge of the Michigan economy helps us collaborate effectively with business customers to support their financial growth plans. Loan decisions at community banks like Level One are made at the local level, getting businesses the funding they need when they need it. Our commitment to entrepreneurial success has made Level One Bank one of the Top 10 Best Banks in Michigan.
As a long-standing community bank in Michigan, Level One understands the region and customers’ needs and is structured to deliver the financial services that are vital to improving Michigan’s economy. Get the financial support you deserve from Level One Bank. Contact our team for more information about partnering with us.
“We cannot accomplish all that we need to do without working together.” Bill Richardson
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