About Credit Unions
What
is a Credit Union?
A
federal credit union is a nonprofit, cooperative financial institution
owned and run by its members. Organized to serve, democratically
controlled credit unions provide their members with a safe place
to save and borrow at reasonable rates. Members pool their funds
to make loans to one-another. The volunteer board that runs each
credit union is elected by the members. Not for profit, not for charity, but for service is a credit union motto.
Credit unions are not new. Originating in Europe, credit union history began in this country when the first credit union was formed in Manchester,
New Hampshire, in 1909. Today, over 10,000 credit unions with over
$480 billion in assets serve more than 79 million people in the United
States. More and more people join credit unions every year and they
are pleased with the service. Credit unions have rated No. 1 in customer
satisfaction at financial institutions for 10 years according to
the American Banker Newspaper's annual customer satisfaction survey.
To join a credit union, you must be eligible for membership. Each institution
decides who it will serve. Most credit unions are organized to serve
people in a particular community, group or groups of employees, or
members of an organization or association.
Low-income
designated credit unions are a unique form of credit union. They serve primarily low-income members in
distressed and financially underserved areas. In the past few years,
NCUA has emphasized the benefits these institutions provide to
the many people who are often unserved by traditional banking institutions.
NCUA also manages a Revolving Loan Fund and provides technical
assistance grants to low-income designated credit unions.
Corporate
credit unions are another form of credit union. While they don't serve people, they play a
vital role in the system by acting as a credit union for credit
unions. The 32 federally insured corporate credit unions across
the country provide investment, liquidity and payment services
for their member credit unions.
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