How do credit unions differ from other chartered financial institutions?
Credit unions serve defined fields of membership, for example, the employees of a particular business. There are also community-based credit unions which serve geographic areas and do not have CDCU designation. Credit unions cannot serve those outside their fields of membership. Reflecting this emphasis, credit unions set up their accounts for “members” rather than “customers”. Once the institution is established, it can apply to its appropriate chartering authority to expand or to add fields of membership. Because they are cooperative, non-profit organizations run for the benefit of their members, credit unions are exempt from taxation. In part because of this exemption, CDCU’s generally provide services at lower rates than do for-profit financial institutions.
