A credit union is a not-for-profit financial cooperative. They are similar to banks in that they offer similar banking products to members. Members are the customers of credit unions which is governed by a volunteer board of directors. Credit unions are federally tax-exempt which allow them to reinvest profits back into the membership in terms of better products, enhanced services, higher savings rates, lower loan rates and little or no fees. Credit unions are regulated by the National Credit Union Administration and deposits are insured up to $250,000.
- are not-for-profit organizations
- require membership eligibility
- serve members rather than to maximize corporate profits
- accept deposits and make loans
- offer savings and loans at reasonable rates
- return surplus income to their members in the form of dividends
- regulated by the NCUA a federal agency
Who Owns a Credit Union?
A credit union is a member-owned financial cooperative. It is a not-for-profit financial institution organized to promote thrift and provide credit to members. It is member-owned, member staffed and controlled through a volunteer board of directors elected by the membership.