What is a Credit Union?
Federal Credit Unions are not-for-profit cooperative financial institutions that are owned and operated by their members. Through the use of volunteer boards and member ownership, credit unions are able to provide highly competitive loan rates, savings rates and fewer fees than other lending institutions. Credit unions share profits with their members (not shareholders) through the payment of dividends. Members also maintain voting rights for issues concerning operations and policy.
Just as banks are overseen by the Federal Deposit Insurance Corporation (FDIC), federally chartered and insured credit unions are overseen by the National Credit Union Administration (NCUA). Just like FDIC, NCUA also provides credit union savings insurance of at least $250,000 through the National Credit Union Share Insurance Fund (NCUSIF), a savings insurance program backed by the full faith and credit of the United States Government.
Becoming a member of a credit union generally requires eligibility within the common bond provision, submission of a membership application and the purchase of at least one ownership share.