HOW DO CREDIT UNIONS WORK?
The best credit unions are values-based, nonprofit financial cooperative institutions, formed by groups of people with a "common bond," (same employer, belonging to the same social group or church, or living or working in the same area.)
Credit unions are member-owned not-for-profit financial cooperatives that do almost anything a bank or savings association can do, including offering checking accounts, savings accounts, credit cards, personal loans, auto loans, home loans, home equity products, and even making some commercial loans.
The National Credit Union Administration (NCUA) insures all credit unions deposits up to at least $250,000 per individual depositor or share owner. The same as the Federal Deposit Insurance Corporation (FDIC) does to banks.
These two types of financial institutions are likely to offer the same industry-standard encrypted security measures.
THE RATES AND FEES - How Credit Unions Work
Since credit unions have tax exemptions and don't have to pay shareholders, they can offer lower rates and fewer fees. Credit unions’ financial services include almost anything a bank can do including issuing credit cards, making home loans and commercial loans.
The best credit unions encourage savings and make excess funds within a community (the profit) available at lower interest rates loans to their members, fewer fees, higher dividends, and more charitable programs to improve the community.
Federal Credit unions were first chartered in the United States in 1934, under the Farm Credit Association. At the state level, Credit unions were first chartered much earlier, in 1909. In 1970 the National Credit Union Administration (NCUA) was created.
According to the “CUNA” Credit Union National Association, there are over 7,200 credit unions in the United States today.
TYPES OF COMMON BONDS
Credit unions were designed to serve their community and bring people together who share a common bond. They require you to be a part of their “common bond” to become a member of the organization.
BENEFITS OF USING A CREDIT UNION - Purpose of Credit Union
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