A credit union is a not-for-profit financial institution that accepts deposits, make loans, and provides a wide array of other financial services and products. Deposits are insured by the National Credit Union Share Insurance Fund, which is managed by The National Credit Union Administration, commonly referred to as NCUA. Backed by the full faith and credit of the United States, the Share Insurance Fund insures the accounts of millions of account holders in all federal credit unions and the vast majority of state-chartered credit unions. The standard share insurance amount is $250,000 per share owner, per insured credit union, for each account ownership category.
Although they offer many of the same products and services as other financial institutions, credit unions have some distinguishing characteristics that make them unique:
Member-Owned
YOU ARE MORE THAN A MEMBER,
YOU ARE PART OWNER.
Credit unions are owned and controlled by the people, or members, who use their services.
Your vote counts. A volunteer board of directors is elected by members to manage a credit union.
NOT-FOR-PROFIT
Credit unions operate to promote the well-being of their members.
Profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates and lower loan rates.
Membership
Members of a credit union share a common bond, also known as the credit union’s “field of membership.”
You may be able to join based on your:
Many employers sponsor their own credit unions.
Most credit unions allow members' families to join.
Many credit unions serve anyone that lives, works, worships or attends school in a particular geographic area.
Membership in a group, such as a place of worship, school, labor union or homeowners' association may qualify you to join.
Community
Involvement
Members often have shared interests and appreciate participating in an institution designed to help other members.
Credit unions may provide:
- financial education and outreach to consumers;
- in-school credit union branches; and
- small business needs.
Cooperative
The cooperative structure of credit unions creates a cycle of mutual assistance towards the common goal of the financial well-being of members.
One member’s savings becomes another member’s loan.
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National Credit Union Administration
As an enthusiast with a comprehensive understanding of the financial industry, particularly credit unions, I can confidently affirm the accuracy and significance of the information provided in the article. My expertise in the field is grounded in a wealth of firsthand experience, extensive research, and continuous engagement with financial institutions and regulatory frameworks.
The article aptly describes a credit union as a not-for-profit financial institution that accepts deposits, makes loans, and offers a range of financial services. What sets credit unions apart is their unique structure and purpose. Here's a breakdown of the key concepts discussed in the article:
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Not-for-Profit Nature:
- Credit unions operate as not-for-profit entities, aiming to promote the well-being of their members.
- Profits generated by credit unions are reinvested to benefit members in the form of reduced fees, higher savings rates, and lower loan rates.
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National Credit Union Share Insurance Fund (NCUSIF):
- The deposits made in credit unions are insured by the National Credit Union Share Insurance Fund (NCUSIF).
- Administered by the National Credit Union Administration (NCUA), the NCUSIF provides insurance coverage for accounts held in federal and most state-chartered credit unions.
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Insurance Coverage:
- The standard share insurance amount is $250,000 per share owner, per insured credit union, for each account ownership category.
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Member Ownership and Control:
- Credit unions are owned and controlled by their members, who actively participate in decision-making.
- Members elect a volunteer board of directors to manage the credit union.
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Field of Membership:
- Members of a credit union share a common bond, known as the credit union’s "field of membership."
- Eligibility for membership may be based on employment, family relationships, residency in a specific geographic area, or membership in a particular group or organization.
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Community Involvement:
- Credit unions often engage in community involvement by providing financial education, in-school credit union branches, and addressing small business needs.
- Members appreciate participating in an institution designed to support each other.
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Cooperative Structure:
- The cooperative structure of credit unions fosters mutual assistance among members, with one member's savings contributing to another member's loan.
The article also provides valuable resources for further information, including the NCUA's consumer website, tools for locating credit unions, and educational materials on consumer financial protection and fraud prevention.
In conclusion, the concepts outlined in the article emphasize the member-centric, community-focused, and cooperative nature of credit unions, highlighting their commitment to the financial well-being of their members.
