CreditUnion

Credit Unions are managed through the election of a volunteer Board of Directors elected from the membership itself. Only a member of a credit union may deposit money with the credit union, or borrow money from it.

A credit union differs from a traditional financial institution (banks, savings and loan, etc.) in that the members who have accounts in the credit union are the credit union's owners.

A credit union is a co-operative institution, with policies governing interest rates and other matters set to benefit the interests of the membership as a whole.

As such, credit unions have historically marketed themselves as providing superior member service and being committed to helping members improve their financial health.

Credit unions typically pay higher dividend (interest) rates on shares (deposits) and charge lower interest on loans than banks.

Credit unions offer many of the same financial services as banks, including share accounts (savings accounts), share draft (checking) accounts, credit cards, and share term certificates (certificates of deposit) and home banking.

The for-profit banking industry has a conflicted relationship with credit unions. Bank trade associations are opposed to the tax-free structure on earnings that credit unions enjoy and the American Bankers Association has identified the revocation of credit unions' tax-free status as topping its political agenda in 2004 and 2005. However, bank holding companies and their affiliates aggressively compete to provide services to credit unions through their ATM networks, corporate checking accounts, and Certificate of Deposit programs.

WHAT IS A FEDERAL CREDIT UNION?

A federal credit union is a financial cooperative chartered by the federal government and owned by its members. Federal credit unions offer members a safe place to save and borrow at reasonable rates. Surplus income is returned to members in the form of dividends.

Originating in Europe, credit unions began organizing in America in the early 1900s to promote thrift among their members. Credit unions then and now serve many left un-served by traditional banking institutions and provide an alternative to oppressive loan-rate charges. Law Schools

Today's credit unions remain unique financial institutions with a philosophy to operate not for profit but for service. Annual polls show that credit unions lead the financial community year after year in providing top-quality personal service to millions of Americans.

Federal credit unions are chartered, supervised, and insured by the National Credit Union Administration (NCUA, an agency of the federal government.