A credit union is a cooperative financial institution which is controlled and owned by its members, operating solely for the provision of credit, promotion of thrift, as well as different financial services to its members. It is a democratic institution with member owned financial cooperatives, allowing members, regardless of the sizes of their accounts, to also run as a volunteer on the board and able to cast their vote during union elections.
Operating as financial intermediaries, credit unions finance its loan portfolios with the mobilization of member savings and shares within the union, instead of using outside capital resources. This ensures opportunities for members for many generations.
Compared to a bank which are owned by various shareholders, that does not necessary belong to the specific bank in question. They are paid board members and boards of directors and will make decisions that are good for the small group of shareholders as oppose to the average members of the financial institution. A credit union allows all its members to have a voice in the financial institution, regardless of the size of their portfolio.
Operating as a non-profit organization, a credit union uses excess earnings of the financial institution to offer its members better and more affordable loans, lower fees as well as higher return on their savings. Members from all walks of life are welcome to join and in order to find out if you qualify, it is simply done by contacting the desired credit union interested in as there is literally hundreds available for the individual.
In order to apply for membership of a particular credit union there is some important information for the individual to know about the procedures for opening an account. It is specific identification procedures and requirements which was mandated by the Patriotic Act of the USA. This Act was established to fight funding of possible terrorism as well as money laundering activities within the unions in the USA.
Everything done within is all for the safety and protection of its existing and potential members as is the case with all financial organizations.