10 Facts About Credit Unions
A credit union is a financial lending-institution that is not-for-profit and offers its members funds and loans. Just like other financial institutions and banks, a credit union offers a wide variety of financial services such as providing loans for different reasons and accepting money deposits. Furthermore, even though many credit unions are small, they still acquire just as much power as a traditional bank. Because credit unions are member-owned, people can have the assurance that it is a safe establishment to save money and can also take advantage of the affordable and reasonable rates that come with being a part of a credit union.
For people thinking “where is a federal credit union near me”, it is good to educate themselves on more information and facts about this type of financial institution before becoming a member. Here are 10 facts about credit unions:
To join, people must be eligible
Credit unions have a set of eligibility factors to consider if anyone is wanting to become a member and make use of the services. This is so that there is a fairness and somewhat bond between all the members involved.
In order to be a member, people must live or reside in the area that the credit union serves. However, if someone doesn’t currently reside in the required location but qualifies under the other requirements, or has a family member that is already part of that union; they can still be eligible.
Although it may seem that joining a credit union and being eligible is hard, this isn’t actually the case and is a lot simpler than people may imagine.
Not insured by the FDIC
The FDIC is a corporation and part of the federal government that acts as an independent agency, who makes sure that big financial institutions and banks are compliant with consumer protection laws and act to monitor the overall financial operations that take place. When it comes to a credit union, they are not overseen or insured by the FDIC.
They’re insured, but by the NCUA
The NCUA is the main insurer of credit unions, however other private insurers sometimes oversee it. The one downside of not being insured by the FDIC is that they protect and cover consumer’s deposits of up to $250,000, nonetheless, the NCUA still provides good coverage for members of credit unions.
The terminology is different
People asking “where is a federal credit union near me” should know that the terminology and phrases used at credit unions are different from what’s used at a traditional bank. It’s good to understand and get to grips with the difference in terminology for those looking to become a member so that they are well prepared.
Member for life
Once someone has passed the eligibility stages and become a member of the credit union, they are a member then for life. Even if someone’s qualifications, circumstances or even location changes, they still get to keep the membership to the union.
Members can vote
Every credit union has a board of directors and when voting time comes, each and every member that’s a part of the credit union is allowed to have their say and vote.
Because credit unions are exempt from federal taxes, this means that they can offer their members a lot lower rates of interest and better rates of various accounts.
There are over 5000 credit unions all over the world and they also provide free access to most ATMs, which is a big plus seeing as ATM fees can be incredibly expensive.
Roosevelt and the Credit Union Act
In 1934 President Roosevelt signed the Federal Credit Union Act, this was to help people financially and to come together during the Great Depression.
Not all credit unions are the same
Even though all credit unions share the same principles and are member-driven, not all of them have the same features or offer the same services. There are big and small credit unions all over the world and some may have more power than others that may be limited with what they can provide to their members.