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Consumer Info

What Is A Credit Union? |"> <--Icon Image Files-->

Consumer Info

What Is A Credit Union?
Benefits Of Joining A Credit Union.
How Are Credit Unions Different From Banks?
Top Ten Facts About Credit Unions
How Can I Join A Credit Union

A credit union is a non-profit, financial cooperative formed by people who have common bond – they live in the same community, work at the same company, are the same ethnicity or religion, etc. Members of the credit union pool their money with other members to provide services exclusively for members of the credit union. Each member of the credit union has a voice – and a vote – in how their credit union operates. Once you are a credit union member, you are always a member.

Credit unions are closely regulated and operate in a very prudent manner. The National Credit Union Share Insurance Fund insured deposits of credit union members up to $100,000. The National Credit Union Administration is the agency of the federal government charged with regulating federal credit unions. The State Department of Banking and Insurance regulates state-chartered credit unions.

Nationally, over 75 million consumers are members of the nation’s 12,000 credit unions. In New Jersey, there are over 1 million credit union members who belong to the state’s 300 credit unions.

Benefits of Joining A Credit Union

Since credit unions are non-profit, financial cooperatives, they can provide many of the same services that banks do, except with better rates and better service. Savings accounts, also called share accounts, earn competitive returns. Checking accounts are called Share Draft Accounts at credit unions. They usually have no service fees or minimum balance, and many even pay interest and provide free checks. Credit unions also provide auto, home and personal loans, usually at lower rates than banks. ATM & debit cards, credit cards and home banking are also being offered.

How Are Credit Unions Different From Banks?

Because of our non-profit status, credit unions are able to consistently offer the best rates on savings and loans in the financial services industry. Credit unions also come out on top of banks when consumers are surveyed on customer service and trustworthiness.

An all-volunteer board of directors, who are elected from the credit union membership, governs credit unions. Banks have paid board of directors. This helps keep credit union’s overhead low, enabling better rates to be offered to consumers.

Banks are owned by groups of stockholders concerned about profits. Credit unions are owned by the individual members of the credit union, who each have one vote regardless of how much money they have at the credit union.

What differentiates credit unions most is their guiding philosophy of “people helping people.” America’s credit unions truly believe that “people are worth more than money.”

Top Ten Facts About Credit Unions

1. Credit unions are not-for-profit, cooperative financial institutions, owned and controlled by the people who use its services.
   
   
2. There are approximately 12,000 credit unions in the United States with over 75 million members. There are 320 credit unions in New Jersey with over one million members.
   
   
3. The National Credit Union Share Insurance Fund, which insures all federal and most state credit unions, has the highest reserve ration for any government insurance fund and is funded solely by credit unions, not taxpayers.
   
   
4. The average credit union is small, just $23 million in assets – less than a tenth the size of the average bank. The entire credit union movement has about $330 billion in assets, less than the single largest U.S. banking company (Chase/Chemical).
   
   
5. Credit unions are the embodiment of democracy…each member has one vote, no matter how much money they have deposited with the credit union.
   
   
6. An American Banker/Gallup survey shows that consumers give credit unions the highest ranking in customer satisfaction of any financial services organization. This marks the 5th straignt year credit unions have led the survey.
   
   
7. An American Banker/Gallup survey shows that consumers give credit unions higher ratings than banks on trustworthiness.
   
   
8. According to a survey conducted by the Consumer Federation of America and the Credit Union National Association, credit unions charge fewer fees and lower fees than banks.
   
   
9. While banks argue that credit unions enjoy a competitive advantage because of their tax-exempt status, Consumer Action – a national consumer education and advocacy group – found that banks receive far greater benefits than credit unions, including significant tax advantages and numerous additional federal subsidies.
   
   
10. Credit unions raised more than $3 million in 1998 in their “Credit Unions for Kids” program for local children’s hospitals affiliated with the Children’s Miracle Network. Every dollar raised goes towards children in a credit union’s own community.

E-mail: info@cuanj.org

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