If you haven’t heard of Credit Unions, then you must be living in a cave, as they are considered a popular financial institution that has more than 90 million. They are also serving more than 45 percent of the financially active community in the United States.
Credit Unions began as a single church, a workplace, or a town and they are only serving people who are a member of the institution or those who simply attended these places. They eventually came under the umbrella of the Federal Credit Union Act of 1934, described as thus:
“Groups having a common bond of occupation or association, or to groups within a well-defined neighborhood, community or rural district.”
So what are they?
Credit Unions are financial institutions who don’t aim to make a profit. They are in fact owned by the members, and the overall aim is to provide a quality service, though of course they must make sensible financial decisions and pay salaries just like banks. They also need to compete with other financial institutions, though most members tend to be in the low to middle income brackets.
‘BECAUSE CREDIT UNIONS ARE NOT FOR PROFIT THEY HAVE GAINED GREAT RESPECT FROM PEOPLE ACROSS THE UNITED STATES. IN THESE DAYS OF HIGH BANK CHARGES THEY PROVIDE A CREDITABLE AND SUCCESSFULL ALTERNATIVE.’
“They really make you feel part of something in a credit union, knowing most other members may be similar to you as an individual. They put people first and I like that very much”Says John from New York
Note the language
You’ll realise quite quickly the language used in a credit union is a little different to that of a bank. What you recognise as a checking account in a bank will be known as a ‘share draft account’. The customers are called members in a credit union. That apart they provide great competition to the banks.
What do credit unions provide?
They have very similar financial products to banks but these can vary a little. Credit Unions in some cases will choose not to provide exactly the same products however.
This is largely because they don’t carry the same volume of customers. The truth is you’ll find they offer products most members are very likely to use. You can choose between auto and personal loans and a whole host of other similar products.
The great thing is all members pool their assets to provide loans and other financial services to each other, so it’s a very personal thing to some people.
If I’m eligible how do I join a credit union?
Once you’ve established whether or not you can join as having a common bond, then all you have to do is go into a branch and simply as for an application. But you’ll need your driver’s license or some other form of identification. The form is straightforward and most unions will require a minimum deposit of $25 via cash or check. It’s as simple as that! The great thing is decisions are made locally and this means you also get a much faster service in certain circumstances. Have a good look around to find the best credit union for your own personal circumstances. The Credit Union National Association (CUNA)has its own website to help find a credit union near you. It also has various financial tools you can use to help make decision s on the product you need.
The Credit Union may carry out a credit check on those applying for a debit card or individual checking account. Check your FICO score just in case! Remember you are entitled to at least one free credit check every 12 months to ensure all of your details are correct.
Ben from Washington took out an auto loan from a credit union after doing plenty of research. He said:
“It amazed me to discover only one used car loan in five is through a credit union. Maybe it’s because a lot of people don’t realise their rates are very competitive against other financial institutions.”
Who supervises credit unions?
There’s a Government agency responsible for overseeing credit unions called ‘The National Credit Union Administration’
Who is the largest credit union?
At the time of writing The Navy federal Credit Union was the biggest – they serve the U.S. Department of Defence and have $45 billion worth of USD assets across 3.4 million members. It’s worth noting this is a perfect example of those sharing a common bond!
You can see why Credit Unions are so popular especially with the lower paid – why not check one out soon?
Is it a bird, is it a plane?…………..No it’s a credit Union………even Superman would be impress with that!!
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