What is a Credit Union?
A credit union is a member-owned, not-for-profit cooperative financial institution formed for the purpose of encouraging savings by offering a fair return, using those savings to make loans at competitively low interest rates to members, and providing other financial services. Members are united by a common bond of association and democratically operate the credit union under state or federal regulation. There are more than 12,000 credit unions in the United States with nearly 72 million credit union members nationwide.
Credit unions exist only to serve their member-owners. Consumer surveys repeatedly show members are more satisfied with the service they receive from their credit union than are customers of banks or savings and loans. Unlike for-profit financial institutions whose stockholders vote according to the number of shares of stock they own, credit unions are democratic organizations directed by their members.
The non-profit status of credit unions enables them to operate at a lower cost than many for-profit institutions and helps them to offer competitive loan and savings rates. For instance, credit unions usually charge lower interest on loans and credit cards, pay higher rates on savings and certificates, and charge fewer and smaller fees for services.
