10 Facts About Credit Unions
Being a member of a credit union is a coup for your finances for many reasons. Here are just a few facts that make credit unions a great option.
Fact #1: President Roosevelt signed the Federal Credit Union Act in 1934 to promote thriftiness and prevent usury during the Great Depression.
Fact #2: Credit Unions are insured. Most credit unions are insured by the National Credit Union Administration (NCUA), which provides essentially the same coverage on funds as does the FDIC for banks. If the word "federal" is in the name, they are insured. If not, check with your credit union. It may be state-chartered and/or have a private deposit insurance.
Fact #3: Eligibility is fairly flexible at most credit unions. Most require residency in a community, city, or state, or that you are employed by the credit union's sponsor company, also known as a Select Employee Group (SEG). But requirements are pretty broad on most, making eligibility at a credit union a possibility for almost anyone.
Fact #4: Credit Unions are not-for-profit institutions and are owned by the people they serve, not by a few shareholders.
Fact #5: Credit Unions can offer better rates on savings accounts, lower interest rates on loans, and little or no fees on accounts because they are exempt from federal taxes. Credit unions still pay state taxes.
Fact #6: The credit union's board of directors, which is elected by members, can set loan limits which can help the credit union grow.
Fact #7: Credit union members have democratic control and can attend and participate in regular and special membership meetings.
Fact #8: Nonmembers benefit from credit unions too. Competition for low rates keeps banks' fees in check, thereby benefiting nonmembers.
Fact #9: With more than 5,000 credit unions across the globe and access to tens of thousands of ATMs, credit unions are increasingly convenient on a national scale.
Fact #10: Once you are a member of a credit union, you stay a member for as long as you maintain your deposit account (share), regardless of whether or not you continue to meet the original eligibility requirements.