Credit Unions Are Not-For-Profit Financial Cooperatives
Interesting Credit Union Facts
1. President Franklin D. Roosevelt Signed the Federal Credit Union Act in 1934
This established credit unions as an alternative to banks to promote thrift and prevent usury during the Great Depression. Many credit unions have decades of history, with members spanning generations.
2. Credit Unions are not-for-profit financial cooperatives
Like other not-for-profit organizations, credit unions enjoy federal tax exemptions, allowing them to offer better rates on savings accounts, lower rates on loans, and little or no fees. Credit unions might pay other types of taxes, such as state, sales, and payroll taxes.
3. There are over 4500 credit unions in the United States
Credit unions might share the same mission statement of “people helping people,” but they have their own distinct culture, identity, and community focus.
4. Credit unions are convenient
Credit unions offer many of the same convenient services to manage your accounts. They also collaborate with one another through a shared branching network, giving you access to thousands of branches nationwide. Many also offer their members access to tens of thousands of surcharge-free ATMs.
5. Once a member, always a member
If you leave your community, change jobs, or leave an association, you don’t have to close out your account. You can keep your credit union membership.
Top Credit Unions in the US
5 Value-Based Reasons to Choose a Credit Union
A study of 10,000 millennials showed the four most hated brands were banks. This is probably why many have turned to alternative banking services. However, credit unions were the original banking alternative. They were founded to provide access to financial services when traditional banks turned many away.
A study found 81% of millennials believe their credit union provides “outstanding customer service” compared to 59% of bank customers. According to CUNA, there are now over 130 million credit union members.
Here are five value-based reasons to choose a credit union:
1. You value self-identity.
As a customer, you want to be heard. With credit unions, you’re a member-owner, not just an account number. The member-owner status gives you more say about the direction of your credit union.
2. You value cooperative sharing.
Credit unions are financial cooperatives meaning it operates for the mutual benefit of members, not profit or shareholders.
3. You value community.
Credit unions are formed to serve the interests of a group of people with a common bond. This includes living in the same area, working at the same employer, attending the same school, worshipping together and so on. The common bond focus ensures profits are reinvested to better members and the communities they serve.
4. You value social responsibility.
Credit unions were formed to give access to credit and banking services to people not served by traditional banks. Today, credit unions offer a full-suite of financial products from checking accounts to credit cards to investments. This ensures access to financial services in many more communities.
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Everything You Need to Know About Credit Unions
What is a credit union?
A credit union is a not-for-profit financial cooperative that offers banking products like checking, savings, and loans to members.
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- Credit unions are regulated by the National Credit Union Administration, an independent federal agency, and manage the NCUSIF (National Credit Union Share Insurance Fund) that insures deposits of federally insured credit unions.
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- Credit unions are governed by a volunteer Board of Directors elected among its memberships.
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- Credit unions have federal tax-exemption status but pay other types of taxes (payroll, property, etc). The federal tax exemption allows credit unions to reinvest profits into the membership in terms of better products, enhanced services, higher savings rates, lower loan rates, and offering little or no fee services.
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- Credit union customers are called “members” and anyone can join a credit union. Once you’ve joined a credit union, you are a member for life unless you choose to close your membership. Membership can extend to your family members too.
Learn more about the differences between credit unions vs banks.
What banking products are offered?
- Deposit Accounts: Savings, checking, money markets, certificates, club accounts, and Individual Retirement Accounts. Credit unions may call these similar banking products a different name but, in effect, do the exact same things (For example, a savings account may be called a share deposit account).
- Credit Cards: Low-interest rate cards, travel rewards, and points accruing credit cards.
- Consumer Loans: Personal loans and lines of credit, student loans and lines of credit, debt consolidation, and many other types of loans to meet different needs.
- Auto loans: New and used car loans, including auto refinancing options.
- Boat/Recreational Vehicle loans
- Home loans: Mortgages, second mortgages, rental and vacation home loans, home equity loans, and lines of credit. Including different types of mortgages, from fixed to adjustable rates, FHA, and VA loans.
- Services and Access to Accounts: Debit cards, ATM cards, checkbooks, bill payment services, mobile banking, and online account access. Some credit unions may also offer 24-hour call center access.
How to Join a Credit Union
Credit Union Access, Branches, and ATM Networks
Shared Branching
Shared Branching is a national cooperative network of credit unions that share branches to give members access to thousands of locations to perform basic banking transactions just as if they were at their hometown credit union. You can make deposits, withdrawals, transfers, and loan payments.
To find a shared branch location, visit SharedBranching.org
Surcharge-Free ATM Access
There are typically two types of fees associated with ATM withdrawals. The fee that your credit union may charge you and the fee the ATM owner will charge. Surcharge-free ATM use means you won’t be charged an ATM owner fee.
To find a surcharge-free ATM, visit your credit union’s website or co-opcreditunions.org
Credit Union Resources from the US Government
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- The National Credit Union Administration (NCUA) is the independent federal agency that regulates, charters, and supervises federal credit unions. With the backing of the full faith and credit of the U.S. Government, NCUA operates and manages the National Credit Union Share Insurance Fund. Visit, ncua.gov
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- MyCreditUnion.gov is the consumer friendly website by the National Credit Union Administration, visit mycreditunion.gov
Calculate your Share Deposit Insurance
The NCUSIF (administered by the NCUA) is a federal insurance fund backed by the full faith and credit of the United States government. The NCUSIF insures deposits in federally insured credit unions, which account for about 98 percent of all credit unions in the United States. Visit mycreditunion.gov/share-insurance