Chances are many of you have heard of credit unions, belong to a credit union, or drive by a credit union. Just what is a credit union and why would someone choose this option for their financial services?
Credit unions are a not-for-profit financial cooperatives. This means they are not out to make money. They are in an area network that shares resources and connects to automated teller machines (ATMs) of credit unions. A credit union is located locally for its members only. Based on where you work, live, worship or membership in a certain organization – you can open an account and become a member of a credit union. Usually the place you work or the organization you belong to will provide information on the credit union which they are connected to.
Credit unions are owned and operated by the individuals who use them otherwise known as “members”. That makes you the “shareholder” and therefore you earn the benefits of the credit union’s success. Credit unions work for their members. Banks are required to make profits for its stockholders. You may be a customer of a bank but not a “stockholder” unless you own shares of the bank’s stock. As a credit union “shareholder” you get a say in how the institution is run. Members have the opportunity to run for the credit union’s board of directors and vote on official positions open for election at the annual membership meeting. Each credit union member gets one vote.
Since credit unions are not-for-profit financial cooperatives whatever profit is made comes back to the member in some manner. This can be seen in fewer fees, lower fees, no checking account minimum balance requirement, and receiving the earning benefit of higher savings rates and lower loan rates – to name a few.
A few credit union and bank similarities:
- A credit union offers products and services just like a bank. These include checking and savings accounts, loans and share certificates/certificate of deposit (CD), debit and credit cards, online and mobile banking.
- Credit unions, banks, lenders, and other financial companies are monitored by the Consumer Financial Protection Bureau (CFBC), a U.S. government agency, in order to protect consumers and make sure you are being treated fairly.
A few credit union and bank differences:
- The products and services offered at credit unions are usually scaled down. They often do not have the usual “bells and whistles” of a banking financial institution. For example, some credit unions are not open throughout the week or may have shorter hours. For some people this can be an inconvenience.
- Many credit unions are insured by the National Credit Union Administration (NCUA) where as many community banks are insured by the Federal Deposit Insurance Corporation (FDIC).
Think a 
credit union might be right for you? Stop by your neighborhood credit union, locate shared branches and ATMs at this link https://co-opcreditunions.org/locator/?ref=allco-op.org&sc=1, and find out if you meet the membership requirements – chances are you do.
