Credit Union Facts

Origin of Credit Unions

The first credit union sprouted in Germany during the mid-19th century as a result of the endeavors of two pioneers, Hermann Schulze-Delitzsch and Friedrich Wilhelm Raiffeisen. Their intention was to serve local communities that were often overlooked by traditional banks.

Unique Ownership Structure

Unlike banks, credit unions operate on a member-owned and cooperative basis. That’s right! As a member, you essentially become a part-owner of the credit union.

A Global Phenomenon

Credit unions are not limited to the United States alone. There are over 85,000 credit unions in 118 countries worldwide.

The ‘Not-For-Profit’ Status

Credit unions function under a not-for-profit model. While they do generate income, the excess profits are typically returned to the members in the form of lower fees, higher savings rates, and lower loan rates.

The Presence in America

Credit unions in America have a significant presence. According to the Credit Union National Association (CUNA), there were over 5,000 credit unions in the United States, serving more than 120 million members as of 2021.

Tailored Services

Credit unions tend to serve specific communities, employer groups, or organizations, which allows them to offer services and products tailored to their members’ needs. This could range from home loans to educational initiatives.

Democratic Principle

One person, one vote! Yes, irrespective of the size of their deposits, each member of a credit union gets a vote in electing the board of directors.

Tax Benefits

Credit unions in the U.S. enjoy tax-exempt status due to their cooperative structure, which enables them to extend more favorable rates to their members.

Competitive Rates

With their member-centric model, credit unions often offer competitive interest rates on loans and credit cards when compared to traditional banks.

Lower Fees

Similarly, the fees charged by credit unions on various services, like overdrafts and account maintenance, tend to be lower than those imposed by regular banks.

Membership Growth

Over the past decades, credit union membership has experienced robust growth. Between 2015 and 2020, the CUNA reported a growth of over 20% in membership.

Social Responsibility

Credit unions place a strong emphasis on social responsibility. They frequently engage in community development and contribute to local charities and causes.

Focus on Financial Education

Many credit unions prioritize financial literacy, offering resources and workshops to help their members better understand and manage their financial life.

FDIC vs. NCUA

While banks have the Federal Deposit Insurance Corporation (FDIC), credit union accounts are insured up to $250,000 by the National Credit Union Administration (NCUA), a U.S. government agency.

Financial Inclusion

Credit unions often serve communities that are underserved by traditional banks, thus promoting financial inclusion.

Shared Branching

Through a shared branching network, credit union members can use the services of any participating credit union across the nation, a unique benefit not offered by traditional banks.

Technological Adoption

Contrary to common misconceptions, many credit unions are tech-savvy and offer services like online and mobile banking, remote deposit capture, and mobile payment options.

High Member Satisfaction

Multiple studies and surveys have indicated that credit unions generally enjoy high member satisfaction levels, thanks to their member-centric approach and personalized services.

Final Word

Credit unions are much more than just another type of financial institution. With their unique structure, dedication to service, and focus on community engagement, they offer a fascinating alternative for individuals seeking a more personalized and community-oriented banking experience. As these 18 facts illuminate, credit unions certainly deserve a second look when choosing your financial partner.