Just What IS a Credit Union?
And Why Should YOU Join?
The first "credit association" was organized in Germany in the 1840's to provide a source of credit for working class citizens at a reasonable cost. At the time, most of these people were subject to loan sharks and had to pay exorbitant rates for any credit they could obtain. Groups of workers and citizens formed these early credit unions to provide a safe place to borrow at reasonable rates, and to allow those that wanted to save to do so and to receive a return on their funds.
The same principles still apply to today's credit unions! The credit union is a financial cooperative. Savers deposit funds which are in turn loaned to those who need to borrow. The interest generated from the loans pays the operating expenses of the credit union, provides capital reserves, and, most importantly, pays dividends to the depositors. This simple formula has been the backbone of credit unions for over 160 years, and they provide relief to their member/owners today, much the same as they did back then.
The first credit union in the United States was organized in 1909, and is still in operation today! Today there are more than 9,000 credit unions operating in the U.S., serving more than 90 million members! Approximately one out of every three Americans belongs to a credit union.
Unlike other financial institutions, credit unions are not-for-profit, democratically controlled cooperatives that are owned and operated by credit union members. In other words, as a member, you are the credit union! For more on how credit unions help their members, click here to see the "Looking out for the Little Guy" campaign.
That unique member-owned structure, a structure that is different from any other U.S. financial institution, is one of many differences that give credit unions a special tax-exempt status. Other differences include:
· Credit Unions are not-for-profit, democratic, financial cooperatives.
· Credit Union Boards serve as unpaid volunteers.
· Credit Unions are restricted by statute to a limited market (field of membership composed of a specific group or set of groups).
· Credit Unions have a social mission to provide service to people of modest means in addition to the rest of their member base. The credit union philosophy is “People Helping People.”
As a member of Statewide Federal Credit Union, we want you to understand why credit unions are different and how you and others benefit from credit union membership.
Today's credit unions provide some of the highest quality, lowest cost financial products and services available. Credit unions have been on the forefront of offering innovative and advanced services that will save their members' funds, and make their financial lives easier. Explore this website to discover all that Statewide Federal Credit Union can do for you and your family!
What's A Credit Union
