A federal credit union is a nonprofit, cooperative financial institution owned and run by its members. Organized to serve, democratically controlled credit unions provide their members with a safe place to save and borrow at reasonable rates. members pool their funds to make loans to one-another. The volunteer board that runs each credit union is elected by the members. Not for profit, not for charity, but for service is a credit union motto.
Credit unions are not new. Originating in Europe, credit union history began in this country when the first credit union was formed in Manchester, New Hampshire, in 1909. Today, over 10,000 credit unions with over $480 billion in assets serve more than 79 million people in the United States. More and more people join credit unions every year and they are pleased with the service. Credit unions have rated No. 1 in customer satisfaction at financial institutions for 10 years according to the American Banker newspaper’s annual customer satisfaction survey.
To join a credit union, you must be eligible for membership. Each institution decides who it will serve. Most credit unions are organized to serve people in a particular community, group or groups of employees, or members of an organization or association.
President Roosevelt signed the Federal Credit Union Act in 1934, forming a national system to charter and supervise federal credit unions.
In 1970, the National Credit Union Administration (NCUA) became an independent federal agency and the National Credit Union Share Insurance Fund was formed to insure members’ deposits.