Credit unions can be state or federally chartered not-for-profit financial cooperative that provides financial services to its member-owners, who have met specific employment, residence, or other eligibility requirements. They are similar to banks in that they offer similar banking products to members.
Members are the customers of credit unions and governed by a volunteer board of directors. Credit unions are federally tax-exempt which allows 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