Q: Can't cities and states just deposit their funds into a credit union? Wouldn't that amount to the same thing?

A:

Credit unions make regions economically strong, because the benefits and profits from the credit unions go to their members, rather than out of state investors. However, a public bank's profits go to the public – all of the residents and taxpayers of a city or state, not just the members of a single credit union.

More importantly, credit unions can only lend out what people deposit into their credit union. Credit unions cannot create money-credit through fractional reserve banking the way real banks (including public banks) can do.

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