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Banks & Credit Unions (Part I)

Key Economic Concepts:

• Banking
• Decision Making
• Economic Systems
• Money
• Money Management
• Savings

Description:

Students learn about banks and credit unions, identifying similarities and differences between the two types of financial institution. They also evaluate a local bank and credit union to determine which one would be better suited to their needs. (This is Part I of a two-part project.)

Lesson Objectives:

Students will:

• Identify the differences and similarities between banks and credit unions.
• Locate local banks and credit unions.
• Evaluate which would be the better choice for them based on a set of criteria.

Introduction:

Banks and credit unions are both financial institutions where you can have checking accounts and savings accounts. So what's the difference? Initially established for different purposes, today's banks and credit unions are looking more and more like each other, but there are still some major differences. Lately, there's been a lot of controversy about one of those differences - that while banks pay taxes as for-profit organizations, credit unions remain largely untaxed. Your students will discover the differences and similarities between banks and credit unions and draw conclusions about which they would choose based on criteria important in selecting a savings institution.

Resources:

• Venn Diagram: Handout
  www.econedlink.org/lessons/docs_lessons/691_venndiag1.pdf


• Bank Criteria Worksheet: Criteria for Choosing a Bank or Credit Union
  www.econedlink.org/lessons/docs_lessons/691_bankcriteria1.pdf


• Locate local banks (enter 'banks' in place name & your zip code)
  www.mapquest.com/ ^[4]


• Americas Local Credit Unions, America's Credit Unions: Where people are worth more than money : Locate local credit unions and general credit union information.
  www.creditunion.coop/ ^[1]


• America's Credit Unions: What is a Credit Union?
  www.creditunion.coop/what_is_a_cu.html ^[5]


• How Stuff Works: How banks work
  http://money.howstuffworks.com/bank1.htm ^[3]


• Credit Union
  
  A nonprofit financial institution owned by its members; offers various financial services including accounts and loans; regulated by the National Credit Union Association (NCUA).
  
  
  
  • Taken from EconEdLink: Credit Union
  
  
• Bank
  
  A financial institution that provides various products and services to its customers, including checking and savings accounts, loans and currency exchange.
  
  
  
  • Taken from EcondEdLink: Bank
  
  

Process:

Activity 1: Similarities & Differences - What are these things?

Students will complete this Venn Diagram using the information they find on the following web sites:

Students can find general information about credit unions by clicking here ^[1] .

For fast facts on credit unions have students click here ^[2] .

Have students click here ^[3] to find how banks work.

A definition for credit union can be found by clicking here.

The definition for bank can be found here.

Venn Diagram will be printed when it's completed and used as a reference sheet for the student until the end of the project, when it will be turned in.

Activity 2: Where are they?

Students will locate banks and credit unions that are close to where they live and go to school - which ones would be most convenient for them? Students locate one bank and one credit union in their area with web sites and fill this information in to the Criteria for Choosing a Bank or Credit Union worksheet.

Locate Local Banks (Enter "banks" in the place for name and enter your zip code)

www.mapquest.com/ ^[4]

Locate Local Credit Unions; General Credit Union Information

www.creditunion.coop/ ^[1]

Activity 3: Which one is better for me? Have students complete Bank Criteria Worksheet by using their venn diagram and Web sites they have researched.

Conclusion:

Banks and credit unions have become fundamentally the same thing. The differences are due to credit unions' history as grass-roots cooperative groups, while banks have always been for-profit institutions.

Assessment Activity:

Have students use their venn diagrams and information they learned to complete the activity below.

Have students click here to complete an interactive activity.

Extension Activity:

1. Split the students into small groups and have them discuss the tax status of banks and credit unions. Is the situation fair? Who does it benefit? Who does it hurt? Have the groups collaborate for a few minutes, then elect on member per group to share their thought with the class.

2. Give students the option to interview an employee of a bank or credit union and share their findings with the class. Require that they submit at least five questions for teacher approval before they conduct the interview.

Links Used:

1. ^{^ ^ ^} "America's Credit Unions: Where people are worth more than money" - (www.creditunion.coop) Locate local credit unions and general credit union information.
2. ^{^} "Overview of Credit Unions" - (banking.about.com) This site explains the difference between credit unions and banks.
3. ^{^ ^} "How Banks Work" - (money.howstuffworks.com) This "How Stuff Works" page discusses how banks function.
4. ^{^ ^} "MapQuest" - (www.mapquest.com) MapQuest provides maps and driving directions.
5. ^{^} "What is a Credit Union?" - (www.creditunion.coop) Explains the difference between a credit union and other financial institutions.

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