What’s a Credit Union?
A credit union is a cooperative, not-for-profit financial institution organized to promote thrift and provide credit to members. It is member-owned and controlled through a board of directors elected by the membership. The board serves on a volunteer basis and may hire a management team to run the credit union. The board also establishes and revises policy, sets dividend and loan rates, and directs certain operations. The result: members are provided with a safe, convenient place to save and borrow at reasonable rates at an institution which exists to benefit them, not to make a profit.
Back to Top
Who owns a credit union?
Most financial institutions are owned by stockholders, who own a part of the institution and intend on making money from their investment. A credit union doesn't operate in that manner. Rather, each credit union member owns one "share" of the organization. The user of credit union services is also an owner, and is even entitled to vote on important issues, such as the election of member representatives to serve on the board of directors.
Back to Top
What is the history of Credit Unions?
The credit union idea is a simple one: People should be able to pool their money and make loans to each other. It's an idea that evolved from cooperative activities in 19th century Europe.
Since that time, the idea's guiding principles have remained the same:(1) Only people who are credit union members should borrow there; (2) loans are made for 'prudent and productive' purposes; (3) a person's desire to repay (character) is considered more important than the ability (income) to repay. Members are, after all, borrowing their own money and that of their friends. These principles still govern most of the world's credit unions.
As the 20th century began, the credit union idea surfaced in Canada. Canada's successful efforts profoundly influenced two Americans: Pierre Jay, the Massachusetts banking commissioner, and Edward A. Filene, a Boston merchant.
The two men helped organize public hearings on credit union legislation in Massachusetts, leading to passage of the first state credit union act in 1909.
Back to Top
Why Join a Credit Union?
Benefits of Membership
Founded on the basic democratic premise of the cooperative movement, credit unions believe that access to low-cost financial services is critical to the health and stability of ordinary citizens. In fact, nearly 80 million Americans trust that their credit union will provide the services to improve their financial well being. Credit union membership offers many benefits. Services offered range from simple savings to home equity loans to IRAs. Study after study has revealed that on average, credit unions provide the best financial offerings with fewer fees, lower rates on loans and higher rates on savings. And credit unions continually score higher than all other financial institutions in consumer satisfaction surveys. Credit unions strive to deliver the best possible service to their most important asset -- their members.
Safety & Soundness
Credit unions primarily engage in consumer loans and residential real estate lending to their members. Credit union performance is at a historically high level. Currently, credit union capital nationwide is 10.28% and the equity ratio of the federal insurance fund, the National Credit Union Share Insurance Fund (NCUSIF).
Back to Top
Are savings deposits insured?
Yes. All savings accounts are insured up to $250,000 by the NCUA, the National Credit Union Administration, an agency of the federal government.
Since 1984, credit unions have fully funded their federal deposit insurance program on a pay-as-you-go basis. Each year, credit unions deposit sufficient funds to ensure that the fund's equity ratio is maintained at or above 1.2%. While the NCUSIF is backed by the full faith and credit of the U.S. Government, the structure of the insurance fund ensures that only if all of the capital in the credit union movement were to be exhausted would taxpayer funds be spent on credit unions. Like other deposit insurance funds, NCUSIF protects member deposits to $250,000.
Back to Top
Who is eligible to Join?
Employees and families of the U.S. Geological Survey and select employee groups.
Back to Top
