Have you ever wondered about the differences between credit unions and average run-of-the-mill banks?
First, let’s start with their similarities. For example, credit unions and banks both accept deposits and withdrawals, while providing loans and a variety of checking and savings accounts. But credit unions have one very significant and noteworthy difference. Unlike banks, credit unions are not-for-profit, cooperative institutions. Unlike banks, which are owned by groups of stockholders and operated by a paid board of directors for the benefit of the stockholders, credit unions are owned by their members and operated by a volunteer board of directors for the benefit of the members.
As cooperative financial institutions, credit unions are owned and operated by the very people who use the services. Each credit union’s charter defines its “field of membership.” This designates who can join. Because of that membership requirement, all members of a particular credit union are united by a common bond. As such, they share something in common: where they live or work, or their association with a recognized group or organization. Once someone qualifies for membership, often family members may join also.
Since credit unions are not-for-profit associations, profits are returned to the members in the form of lower loan rates, higher savings rates, and many free or discounted services.
What do you have to do to join a credit union? While the actual requirements vary from credit union to credit union, some sort of action is required to designate you as a member. Often, it’s as simple as making a small deposit that acts as your “share” of ownership in their institution. Think of it as your share of “stock” in the business (after all, you are the owner). And, because of the democratic characteristics of a credit union, all members have an equal voice in the way the organization functions.
Credit unions represent a different type of financial institution, as they believe fair and equitable financial service is vital to the well-being and stability of the average, ordinary United States citizen. Research shows that the United States has roughly 9,000 functioning credit unions. In 2004, federally insured state and federal credit unions had combined assets of $647 billion, which does not include approximately 500 non-federally insured state credit unions. From those 9,000 institutions, greater than 79 million members believe that their individual credit union sincerely wants to provide them with the financial services that will allow them to improve their economic well-being. The 79 million members are also satisfied with the benefits they realized as credit union members. Some of the most popular services available through credit unions are savings accounts, checking accounts, vehicle loans, and personal loans. Finally, research reflects that credit unions characteristically provide the finest financial assistance at reduced rates and with fewer finance fees on loans while offering their members higher rates on savings accounts.
So if you’re a WVU Employees Federal Credit Union Member, and your friends and family are eligible for membership, let them in on one of your best secrets. A credit union is the best place to, well, bank. Because credit unions consistently endeavor to provide the very best and most economical financial services possible to their most valuable, and indeed priceless, asset – their credit union members.