What is a Credit Union?

Credit unions are not-for-profit cooperatives, owned by their members who save and borrow there. The philosophy of the credit union movement is “not for profit, not for charity, but for service.” This philosophy dictates how a credit union differs from other financial institutions. When you open your account, you become an owner of your credit union.

The Board of Directors, which is responsible for setting the policies of the credit union, is elected from the membership. As a member of a credit union you can nominate someone for the board or run for office yourself. You may also choose to volunteer to serve on various credit union committees such as the Credit Committee or Supervisory Committee. In selecting the directors, each member receives one vote, regardless of the amount of money the member has with the credit union.

Credit unions are focused on people, not profits. They operate by a “people helping people” philosophy that is hard to find at many other financial institutions.


What makes a credit union different?

Volunteer boards

Every credit union is governed by a board of directors, elected by and from the credit union’s membership. Board members serve voluntarily and receive no compensation.

Hands raised in the air

Ownership

Credit unions are a democracy. Each credit union member has equal ownership and one vote, regardless of how much money they have on deposit.

Drawing of a vote going into a ballot box

Not-for-profit

Credit unions are not-for-profit financial cooperatives. We exist to serve our members, not to make a profit, so credit unions do not issue stock or pay dividends to outside stockholders. Instead, we return our earnings to members by providing lower loan rates, generally pay higher dividends on deposits and charge lower fees.

Bag of money with a circle around it and a line through the circle

Membership eligibility

Credit unions cannot serve the general public; instead people must qualify for membership. People are eligible for credit union membership through their employer, organizational affiliations like churches or social groups, or a community-chartered credit union.

Certificate with a check mark on it

Financial education

Credit unions provide beneficial education to their members so they can become better-educated consumers of financial services. We not only focus on our adult members, but work to give our youth and young adults the skills they need to become financially savvy.

Dollar sign with a graduation cap

'People helping people' philosophy

Credit unions are focused on the common goal of providing quality financial services based on a foundation of financial strength and integrity. The philosophy of “people helping people” extends to our employees who become involved in many charitable activities that benefit the community.

Two human figures, one with an arm around the other's shoulders

How are credit unions different from banks?

Ownership


Credit unions ...

... are member-owned. If you have an account at a credit union, you have a share in it. Every member is equal, regardless of financial investment, and carries one vote in the democratic processes that guide the credit union.

Banks ...

... are owned by shareholders. The more shares you can purchase, the more of the bank you can own, and the more influence you have.

Profit


Credit unions ...

... are not-for-profit cooperatives. Earnings are returned to their members — anyone with a share account — in the form of lower interest rates on loans and higher interest rates on deposit accounts.

Banks ...

... are for-profit. Banks' earnings are distributed to its executives and those who own shares or stock in the company. Customers rarely see the effects of profit.

Boards


Credit unions ...

... are governed by Boards of Directors. Board members set the policies and govern the affairs of the credit union. More importantly, they are elected from the membership, and they are volunteers who receive no compensation for their work.

Banks ...

... are run by board members or executives who are hired, often from outside the organization and even from outside the banking clientele.