What is a Credit Union
Credit unions began as an idealistic, yet practical experiment. The concept was simple: Members pool their savings and lend to each other.
Today, thousands of credit unions- which are democratically controlled financial cooperatives- serve millions of members worldwide. In the U.S., credit unions have been the favorite among consumers surveyed in the American Banker satisfaction survey every year the independent publication has done the study-since 1983.
Credit union founders had a motto, still used today, describing why credit unions were started in the first place: "Not for profit, not for charity, but for service." From the beginning, credit unions sought to keep people economically independent - by helping them learn to save and borrow prudently.
Not-for-profit. Credit unions are not-for-profit financial cooperatives. We exist to serve our members, not to make a profit. Earnings are returned to our members in the form of lower loan rates, higher interest on deposits, and lower fees.
Ownership. Each credit union member has equal ownership and one vote -- regardless of how much money a member has on deposit. At a credit union, everyone is both a member and an owner.
Volunteer Boards. Another feature of credit unions is their volunteer leadership. Each credit union is governed by a volunteer board of directors, elected by and from the credit union’s membership. Credit union board members (directors) are qualified, unpaid volunteers the members elect. They work for the membership's best interest, not for the interest of a few stockholders. Most credit unions have paid professional staff and management, but some of the smallest credit unions have volunteer staffs. Each credit union is governed by a volunteer board of directors, elected by and from the credit union’s membership.
Membership Eligibility. By current federal statute, credit unions cannot serve the general public. People qualify for a credit union membership through their employer, organizational affiliations like churches or social groups, or a community-chartered credit union.
Financial Education for Members. Credit unions have a tradition of member education assisting members to become better-educated consumers of financial services. We offer seminars on topics such as buying a car or preparing for retirement; provide publications that promote ways to manage money and use credit wisely; and counsel members about ways to curb spending problems before they become serious.
Social Purpose. Credit unions exist to help people. Our goal is to serve all of our members well, including those of modest means – every member counts. Our members are fiercely loyal for this reason. They know their credit union will be there for them in bad times, as well as good. The same people-first philosophy causes credit unions and our employees to get involved in community charitable activities and worthwhile causes – just ask us.
Funds are federally insured. Your accounts are backed up to $250,000 by a private insurer or by the National Credit Union Share Insurance Fund (NCUSIF). NCUSIF is a unique protector in the financial services world.
Technology and remote access. Credit unions are leaders in providing remote access via telephone and the Internet and have pioneered or greatly improved key services such as Direct deposit and payroll deduction. These services provide a safe and convenient way for members to save regularly and repay loans. Other institutions offer the services, but credit unions were the first to make them work.
As times change, so do credit unions. When new member needs surface, credit unions find ways to satisfy those needs. Credit unions remember their mission. Follow the credit union lead by joining today!