10 Facts About Credit Unions That May Surprise You
Being a member of a credit union is a win for your finances for many reasons. But there are a few facts about credit unions that might surprise you – like how easy it is to join most credit unions today and nationwide access to your accounts and ATMs!
President Franklin D. Roosevelt signed the Federal Credit Union Act in 1934 to promote thriftiness and prevent the practice of lending money at unreasonably high rates of interest (usury) during the Great Depression.
Credit unions can offer better rates on savings accounts, lower interest rates on loans, and little or no fees on accounts because of their not-for-profit structure and federal tax exemption. Credit unions still pay state taxes.
With more than 5,000 credit unions across the country and access to 30,000+ ATMs, credit unions are increasingly convenient on a national scale. Many offer shared branching and ATM networks for added member convenience.
Eligibility to join a credit union is fairly flexible. Most require residency in a certain city or state, or that you are employed by the credit union’s sponsor company.
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. Some credit unions may be state-chartered or have private deposit insurance, or both.
Credit unions are not-for-profit institutions and are owned by the people they serve (members), not by a few shareholders.
The credit union’s board of directors, which is elected by members, volunteer their time to help oversee the overall direction of the cooperative, unlike for-profit banks with highly-paid board members.
Credit union members have democratic control of the credit union and can attend and participate in regular and special membership meetings.
Nonmembers benefit from credit unions, too. Competition for low rates keeps banks’ fees in check, thereby benefiting nonmembers.
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.
Your turn: Tell us your favorite reasons for being a member of a credit union – leave a comment below.