A credit union exists to serve a specific group of people, such as a group of employees or the members of a professional or religious group. This is called a "field of membership." The field of membership may include where they live, where they work, or their membership in a social or economic group.
A credit union is a cooperative, nonprofit financial institution organized to promote thrift and to provide credit to members. It is member-owned and controlled through a board of directors elected by its membership. The board serves on a volunteer basis and may hire a management team to run the credit union. The board also establishes and revises policy, sets dividend and loan rates, and directs certain operations. The result: members are provided with a safe, convenient place to save and borrow at reasonable rates at an institution which exists to benefit them - not to make a profit.
Most financial institutions are owned by stockholders, who own a part of the institution and intend to make money from their investment. A credit union doesn't operate in that manner. Rather, each credit union member owns one "share" of the organization. Each member is entitled to vote on important issues, such as the election of member representatives to serve on the board of directors.
The first credit union cooperatives started in Germany over a century ago. Today, credit unions are found everywhere in the world. The credit union movement started in this country in Manchester, N.H. There, the St. Mary's Cooperative Credit Association, a church-affiliated credit union, opened its doors in 1909. Today, one in every three Americans is a credit union member.
The primary purpose is to encourage members to save money. Another purpose is to offer loans to members. Credit unions have traditionally made loans to people of ordinary means. Credit unions can charge lower rates for loans (as well as pay higher dividends on savings) because they are nonprofit cooperatives. Rather than paying profits to stockholders, credit unions return earnings to members in the form of dividends or improved services.
Yes. Vibe members' deposits are federally insured for at least $250,000 by the National Credit Union Administration (NCUA), which is fully backed by the U.S. government. Individual Retirement Accounts (IRAs) are insured for an additional $250,000. For more information, please view the NCUA website.
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