What is a credit union?
A Credit Union is a member owned non-profit financial cooperative. The first credit union was formed in 1850 in Germany. In this first Credit Union members deposited their savings with the credit society to provide working capital with dividends paid on these “share” accounts. Loans were extended for “productive purposes” based on the character of the borrower. The concept of Credit unions quickly spread throughout Europe, then to North America in 1900.
• Background Credit Unions were created in 1933 as an alternative financial option to traditional banks. Developed on the principle of “people helping people”, credit unions offer all of the same products and services as traditional banks while never compromising their dedication to customer service and cultivating member loyalty. • Why Choose a CU A bank’s leadership is comprised of their largest shareholders. Credit unions are owned by their customers/members. Credit unions exist solely to serve their customers/members who are part owners in the credit union and benefits are usually returned to them in the form of lower loan rates and higher deposit rates. Many credit unions in the San Diego area are full-service financial institutions providing one-stop services to meet all of the members financial needs. • Leadership Another difference between credit unions and banks is volunteers. The boards of directors of credit unions are volunteers, as are the supervisory committee members tha
Credit unions are not-for-profit financial co-operatives. The first credit union was established in Western Europe, and the main purpose of a credit union is to give members, who are also owners, a place to save and borrow money. People form credit unions around a common bond, like employment, to help each other out. The money members have in their credit union accounts is lent to other members who pay interest on those loans. The credit union then takes the funds generated by that interest to pay the operating expenses of the credit union. After paying operating expenses, any leftover money is returned to members in the form of dividends and other financial services. Best of all, because credit unions are not-for-profit, they’re able to pay high dividends on savings and charge low interest rates on loans.
by Center for Personal Finance editors A credit union is a cooperative financial institution, owned and controlled by the people who use its services. These people are members. Credit unions serve groups that share something in common, such as where they work, live, or go to church. Credit unions are not-for-profit, and exist to provide a safe, convenient place for members to save money and to get loans at reasonable rates. Did you know there are at least seven ways you can find a credit union that you are eligible to join? Credit unions, like other financial institutions, are closely regulated. And they operate in a very prudent manner. The National Credit Union Share Insurance Fund (NCUSIF), administered by the National Credit Union Administration, an agency of the federal government, insures deposits of credit union members at more than 9,000 federal and state-chartered credit unions nationwide. Deposits are insured up to $250,000. What makes a credit union different from a bank or
• A. A credit union is a nonprofit cooperative financial institution organized and operated for the mutual benefit of its members. The members are the owners of the institution. The membership of a credit union is limited to groups having a common bond of occupation or association or to groups within a well-defined neighborhood, community, or rural district. A person cannot become a member of a credit union unless he or shee belongs to a group that is within a credit union’s field of membership. The field of membership is specified in a credit union’s charter or articles of incorporation. Because credit unions are nonprofit cooperatives, they are exempt from from payment of federal and state income taxes.
