Consumer Resources
What is a Credit Union?
A credit union is a not-for-profit financial co-operative and is owned by its members. Credit unions can and do operate to produce a profit making this type of organization different from a non-profit organization. Credit unions do not pay income tax.
Credit unions are formed and chartered based on an association that individuals have with one another, such as: place of employment, place of residence or membership in an organization. To join a credit union you must be within the credit union's field of membership. Credit unions offer a range of financial services and products that vary from credit union to credit union. Deposits in the credit union are insured by the National Credit Union Administration. Credit unions can be chartered either by an individual state regulatory agency or by the federal regulatory agency, the National Credit Union Administration.
A member’s deposit in a credit union entitles them to a share in the cooperative. The member receives a dividend, typically quarterly, based on the amount of money deposited. Dividend rates and loan rates vary depending on the policies of the individual credit union.
Credit unions are governed by a committee of member-volunteers who receive no compensation for their service. These volunteers are organized into a Board of Directors, a Supervisory Committee and a Credit Committee.
Credit unions are unique among other financial institutions because
its members are co-owners in the cooperative. Members work together to
run the credit union with the main purpose to provide a means of thrift
and borrowing for each member. Only a member of a credit union can deposit
money and receive a loan.
Current Topics
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This page was modified on Friday, 11-May-2007 20:24:43 CDT .