A credit union is a hands on cooperative financial institution, owned and controlled by its membership that. Credit unions serve common interest groups, such their place of work, the community they live in, or the church they attend. Credit unions are not-for-profit, and exist as an alternative to banks to provide a safe, convenient place for members to save money and to get loans and other financial products at reasonable rates.
The federal government closely regulates credit unions, just like other financial institutions. The National Credit Union Share Insurance Fund (NCUSIF), which is administered by the National Credit Union Administration, an agency of the federal government, that insures the deposits of credit union members. Just like the FDIC insurance offered to underwrite banking investors, credit union deposits are insured. In the case of credit unions, individual accounts are insured for up to $100,000.
How does a credit union differ from a bank or savings & loan? All three types of financial institutions accept deposits and make loans. Unlike credit unions, banks and Savings and Loan Corporations are in business to make a profit. Banks and Savings & Loans are owned by groups of stockholders whose interest lies in earning a healthy return on their investments. Credit Unions are owned by their members and administrated by a Board of Directors composed of unpaid member volunteers.
Credit unions are for everyone, but the law that governs their charters places some limits on the people who may become members. A credit union's charter defines its "field of membership," which could be an employer, church, school, or community. Anyone working for an employer that sponsors a credit union, for example, is eligible to join that credit union. Individuals who are not members of a group that has credit union sponsorship may still be allowed to join one. Of course, one way is to join the church or organization that sponsors the credit union. You may be unaware that your company sponsors a credit union. Many employers offer direct deposit of payroll to a credit union.
Most credit unions allow the family members of credit union members' to join. A "family" is defined differently by different organizations. At some, it means the immediate family are eligible but other credit unions extend the definition to include cousins, uncles, and aunts. Some credit unions service a specific community and the membership includes residents of the geographic area.
by Sally.Anderson 1 year ago
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