By: Sammi Coppedge, Marketing Assistant
The credit union movement began 160 years ago with a simple but radical idea. That with the help of your neighbors, you can improve your financial well-being. Today there are more than 200 million credit union members worldwide—100 million of them in the U.S.
After all of this time, Credit unions are still:
- People coming together to be their own bank, so no one can deny them a path to prosperity.
- People pooling their savings to provide each other affordable credit.
- People helping people.
Most people who do not bank with a credit union, have heard about them. However, they might not understand the fundamental difference between credit unions and banks. In honor of International Credit Union Day, here are some of the other unique aspects that make a credit union… a credit union.
1. Serving Members
First and foremost, credit unions exist to serve their members, not to make a profit. Yes, credit unions are non-for-profits. Not in the traditional sense of a non-for-profit, but credit unions do not issue stock or pay dividends to outside shareholders like banks. Instead, they take that profits and put it right back into the credit union itself. Oftentimes, this is reflected in the form of lower interest rates on loans, higher interest on deposits, and oftentimes lower fees on products and services. Credit unions exist to serve their members and not their shareholders.
2. Democratic Control
Credit unions are member owned. Members own a share of the credit union through an initial deposit into their savings account. As owners, members have a democratic vote in electing board members. Additionally, members can run for a position on the board to help influence the operations of the credit union. Additionally, all board members are volunteers, whereas in banks, board members are paid positions.
3. Social Responsibility
Doing good is something credit unions take seriously, locally and globally. This cooperative spirit of people helping people has led to life-changing opportunities in the form of small business start-ups, home ownership and education.