What is a Credit Union?
Credit unions are cooperative, not-for-profit financial institutions set up for promoting savings and providing credit to its members. Credit unions are member-owned and run through a board of directors elected by the membership. Board members serve on a volunteer basis. The board works to establish and revise policy, set dividend and loan rates, and direct certain operations within the credit union. This results in the credit union providing a safe, convenient place for members to save and borrow at an institution that exists to benefit them.
Who owns a Credit Union?
Financial institutions are typically owned by stockholders, who own a part of the institution and intend to make a profit from their investment. Credit unions do not operate in this manner and each member owns one "share" of the organization. As a member of the credit union you are also an owner. This entitles you to vote on important issues such as electing your board of directors.
How did Credit Unions start?
Credit union cooperatives began in Germany over a century ago. Today, you can find credit unions everywhere in the world. St. Mary's Cooperative Credit Association opened its doors in 1909 in Manchester, New Hampshire. This began the credit union movement within the U.S. and today one in every three Americans is a credit union member.
What is the purpose of a Credit Union?
The main purpose of credit unions is to encourage their members to save money. Instead of paying profits to stockholders, credit unions return quarterly earnings to its members in the form of dividends or even enhanced services. Credit unions also offer loans to its members and have traditionally focused on people of ordinary means. Because credit unions are non-for-profit cooperatives they are able to offer lower rates for loans as well as pay higher dividends on their savings.
Who can join a Credit Union?
Credit unions exist to serve a specific group of people, such as members of a professional group, a group of employees, or a religious group. This is called a field of membership and may include where they live, work, or their membership in a social or economic group.
Who is eligible to join our credit union?
To Join The Credit Union Just Come By Our Office And Complete The Membership Application.
There is a $10.00 deposit required to become a member. Of that, $5.00 is your new membership fee and the other $5.00 goes to becoming a shareholder in the credit union. Members of your immediate family are eligible to join. Once you have joined our credit union, simply maintain a minimum of $5.00 in your regular savings account to keep your membership active. As a member of our credit union, you are one of the owners. Show your support by taking advantage of all the services we have to offer.
What is the difference between a credit union and a bank?
Credit unions are not-for-profit organizations whose mission is helping members achieve financial independence. They are owned by the members which have money on deposit within the credit union. Banks are owned by investors who are seeking a profit.
- Banks offer many of the same services as credit union, however, their main mission is to succeed on returning on their own investments.
- One of the main differences is that credit unions are in control of their board of directors. Banks only allow shareholders to have a voice in the election of board members, their customers have no voice in the leadership of their institution. Board members at credit unions operate on an entirely voluntary basis. It is illegal for them to receive compensation for their work which means they make decisions based upon the membership's best interests.
- These differences in leadership and philosophy all credit unions to offer services with lower fees with better rates. Every year banker's own trade publication, American Banker, rates credit unions highest in customer satisfaction.