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A '''credit union''' is a cooperative financial institution, operated similar to a traditional bank. They operate on a "not-for-profit" basis (and it is common for the credit union, at the end of a successful year, to declare a special "dividend", similar to an additional interest payment, on deposits).
Unlike banks, which are owned either as publicly-traded companies or as private investments, credit unions are owned its members, and the members elect the major officers of the credit union.
Also unlike banks, credit unions serve limited memberships, which may be based on employment (such as employees of a company) or residence (such as all persons residing in a county). The general rule, though, is "once a member, always a member" (thus, if a member leaves the company or moves outside the residence, so long as s/he maintains an account, s/he remains a member, but if the account is terminated, membership may be lost).
Credit unions operate worldwide.
In the United States credit unions may be governed at the Federal level or at the state level (except Wyoming does not govern credit unions). Deposits are guaranteed (in the same amount as banks) by the National Credit Union Administration or by American Share Insurance (a private company).
Compared to traditional banks, credit unions had a much lower failure rate during the Great Recession, and typically have a higher rate of customer satisfaction.
[[Category:Finance]]
Unlike banks, which are owned either as publicly-traded companies or as private investments, credit unions are owned its members, and the members elect the major officers of the credit union.
Also unlike banks, credit unions serve limited memberships, which may be based on employment (such as employees of a company) or residence (such as all persons residing in a county). The general rule, though, is "once a member, always a member" (thus, if a member leaves the company or moves outside the residence, so long as s/he maintains an account, s/he remains a member, but if the account is terminated, membership may be lost).
Credit unions operate worldwide.
In the United States credit unions may be governed at the Federal level or at the state level (except Wyoming does not govern credit unions). Deposits are guaranteed (in the same amount as banks) by the National Credit Union Administration or by American Share Insurance (a private company).
Compared to traditional banks, credit unions had a much lower failure rate during the Great Recession, and typically have a higher rate of customer satisfaction.
[[Category:Finance]]