Credit union - wikipedia Credit union `` Caisse pop '' redirects here. For Caisse populaire Desjardins, the Quebec credit union, see Desjardins Group. This article has an unclear citation style. The references used may be made clearer with a different or consistent style of citation and footnoting. ( July 2015 ) Part of a series on financial services Banking Types of banks Advising Banq Central Commercial Community development Cooperative Credit union Custodian Depository Direct Export credit agency Investment Industrial Merchant Mutual savings National Offshore Participation Postal savings Private Public Retail Savings Savings and loan Universal Lists of banks Accounts Cards Accounts Christmas club Deposit Money - market Savings Time deposit ( Bond ) Transaction ( checking / current ) Cards ATM Credit Debit Funds transfer Electronic bill payment Wire Cheque SWIFT Automated Clearing House Giro Terms Automated teller machine Bank regulation Loan Money creation Bank secrecy Ethical banking Fractional - reserve banking Islamic banking Private banking Related topics Financial market ( participants ) Corporate finance Personal finance Public finance Financial law Financial regulation List of banks A branch of the Coastal Federal Credit Union in Raleigh, North Carolina A credit union is a member - owned financial cooperative, controlled by its members and operated on the principle of people helping people, providing its members credit at competitive rates as well as other financial services. Worldwide, credit union systems vary significantly in terms of total assets and average institution asset size, ranging from volunteer operations with a handful of members to institutions with assets worth several billion U.S. dollars and hundreds of thousands of members. Credit unions operate alongside other mutuals and cooperatives engaging in cooperative banking, such as building societies. `` Natural - person credit unions '' ( also called `` retail credit unions '' or `` consumer credit unions '' ) serve individuals, as distinguished from `` corporate credit unions '', which serve other credit unions. Contents 1 Differences from other financial institutions 2 Not - for - profit status 3 Global presence 4 History 5 Stability and risks 6 Corporate 7 Leagues and associations 8 Deposit insurance 9 See also 10 References 11 Further reading 12 External links Differences from other financial institutions Credit unions differ from banks and other financial institutions in that those who have accounts in the credit union are its members and owners, and they elect their board of directors in a one - person - one - vote system regardless of their amount invested. Credit unions see themselves as different from mainstream banks, with a mission to be `` community - oriented '' and `` serve people, not profit ''. Credit unions offer many of the same financial services as banks, but often using a different terminology ; common services include share accounts ( savings accounts ), share draft accounts ( checking accounts ), credit cards, share term certificates ( certificates of deposit ), and online banking. Normally, only a member of a credit union may deposit or borrow money. Surveys of customers at banks and credit unions have consistently shown a significantly higher customer satisfaction rate with the quality of service at credit unions. Credit unions have historically claimed to provide superior member service and to be committed to helping members improve their financial situation. In the context of financial inclusion credit unions claim to provide a broader range of loan and savings products at a much cheaper cost to their members than do most microfinance institutions. Not - for - profit Status In the credit union context, `` not - for - profit '' must be distinguished from a charity. Credit unions are `` not - for - profit '' because their purpose is to serve their members rather than to maximize profits, so, unlike charities and the like, credit unions do not rely on donations, and are financial institutions that must make what is, in economic terms, a small profit ( i.e., in non-profit accounting terms, a `` surplus '' ) to remain in existence. According to the World Council of Credit Unions ( WOCCU ), a credit union 's revenues ( from loans and investments ) must exceed its operating expenses and dividends ( interest paid on deposits ) in order to maintain capital and solvency. In the United States, credit unions incorporated and operating under a state credit union law are tax - exempt under Section 501 ( c ) ( 14 ) ( A ). Federal credit unions organized and operated in accordance with the Federal Credit Union Act are tax - exempt under Section 501 ( c ) ( 1 ). Global presence The directors of the Mulukanoor Women 's Thrift Cooperative stand at the entrance to their credit union in Karimnagar district, Andhra Pradesh, India According to the World Council of Credit Unions ( WOCCU ), at the end of 2014 there were 57,480 credit unions in 105 countries. Collectively they served 217.4 million members and oversaw US $ 1.79 trillion in assets. WOCCU does not include data from cooperative banks, so, for example, some countries generally seen as the pioneers of credit unionism, such as Germany, France, the Netherlands, and Italy, are not always included in their data. The European Association of Co-operative Banks reported 38 million members in those four countries at the end of 2010. The countries with the most credit union activity are highly diverse. According to WOCCU, the countries with the greatest number of credit union members were the United States ( 101 million ), India ( 20 million ), Canada ( 10 million ), Brazil ( 6.0 million ), South Korea ( 5.7 million ), Philippines ( 5.4 million ), Kenya and Mexico ( 5.1 million each ), Ecuador ( 4.8 million ), Australia ( 4.5 million ), Thailand ( 4.1 million ), Colombia ( 3.6 million ) and Ireland ( 3.3 million ). The countries with the highest percentage of credit union members in the economically active population were Barbados ( 82 % ), Ireland ( 75 % ), Grenada ( 72 % ), Trinidad & Tobago ( 68 % ), Belize and St. Lucia ( 67 % each ), St. Kitts & Nevis ( 58 % ), Jamaica ( 53 % each ), Antigua and Barbuda ( 49 % ), the United States ( 48 % ), Ecuador ( 47 % ), and Canada ( 43 % ). Several African and Latin American countries also had high credit union membership rates, as did Australia and South Korea. The average percentage for all countries considered in the report was 8.2 %. Credit unions were launched in Poland in 1992 ; as of 2012 there were 2,000 credit union branches there with 2.2 million members. History Friedrich Wilhelm Raiffeisen founded the first rural credit unions in Germany A caisse populaire credit union in Lévis, Quebec, circa 1920 Main article : History of credit unions Modern credit union history dates from 1852, when Franz Hermann Schulze - Delitzsch consolidated the learning from two pilot projects, one in Eilenburg and the other in Delitzsch in the Kingdom of Saxony into what are generally recognized as the first credit unions in the world. He went on to develop a highly successful urban credit union system. In 1864 Friedrich Wilhelm Raiffeisen founded the first rural credit union in Heddesdorf ( now part of Neuwied ) in Germany. By the time of Raiffeisen 's death in 1888, credit unions had spread to Italy, France, the Netherlands, England, Austria, and other nations. The first credit union in North America, the Caisse Populaire de Lévis in Quebec, Canada, began operations on January 23, 1901 with a 10 - cent deposit. Founder Alphonse Desjardins, a reporter in the Canadian parliament, was moved to take up his mission in 1897 when he learned of a Montrealer who had been ordered by the court to pay nearly C $ 5,000 in interest on a loan of $150 from a moneylender. Drawing extensively on European precedents, Desjardins developed a unique parish - based model for Quebec : the caisse populaire. In the United States, St. Mary 's Bank Credit Union of Manchester, New Hampshire, was the first credit union. Assisted by a personal visit from Desjardins, St. Mary 's was founded by French - speaking immigrants to Manchester from Quebec on November 24, 1908. America 's Credit Union Museum now occupies the location of the home from which St. Mary 's Bank Credit Union first operated. On November 1910 the Woman 's Educational and Industrial Union set up the Industrial Credit Union, modeled on the Desjardins credit unions it was the first non-faith - based community credit union serving all people in the greater Boston area. The oldest statewide credit union in the United States was established in 1913. The St. Mary 's Bank Credit Union serves any resident of the Commonwealth of Massachusetts. After being promoted by the Catholic Church in the 1940s to assist the poor in Latin America, credit unions expanded rapidly during the 1950s and 1960s, especially in Bolivia, Costa Rica, the Dominican Republic, Honduras, and Peru. The Regional Confederation of Latin American Credit Unions ( COLAC ) was formed and with funding by the Inter-American Development Bank credit unions in the regions grew rapidly throughout the 1970s and into the early 1980s. In 1988 COLAC credit unions represented 4 million members across 17 countries with a loan portfolio of circa half a billion US dollars. However, from the late 1970s onwards many Latin American credit unions struggled with inflation, stagnating membership and serious loan recovery problems. In the 1980s donor agencies such as USAID attempted to rehabilitate Latin American credit unions by providing technical assistance and focusing credit unions ' efforts on mobilising deposits from the local population. In 1987 the regional financial crisis caused a run on credit unions. Significant withdrawals and high default rates caused liquidity problems for many credit unions in the region. Stability and risks Credit unions and banks in most jurisdictions are legally required to maintain a reserve requirement of assets to liabilities. If a credit union or traditional bank is unable to maintain positive cash flow and / or is forced to declare insolvency, its assets are distributed to creditors ( including depositors ) in order of seniority according to bankruptcy law. If the total deposits exceed the assets remaining after more senior creditors are paid, all depositors will lose some or all of their initial deposits. However, most jurisdictions have deposit insurance that promises to make depositors whole up to a maximum insurable account level. In the aftermath of the financial crisis of 2007 -- 2008 there was a dramatic increase in the number of bank failures but not in the number of credit union failures, and in 2017 all depositors at failed credit unions were fully covered by deposit insurance but depositors at a failed traditional bank were not covered by deposit insurance. Corporate Main article : Corporate credit union Credit unions as such provide service only to individual consumers. Corporate credit unions ( also known as central credit unions in Canada ) provide service to credit unions, with operational support, funds clearing tasks, and product and service delivery. Leagues and associations Credit unions often form cooperatives among themselves to provide services to members. A Credit Union Service Organization ( CUSO ) is generally a for - profit subsidiary of one or more credit unions formed for this purpose. For example, CO-OP Financial Services, the largest credit union owned interbank network in the United States, provides an ATM network and shared branching services to credit unions. Other examples of cooperatives among credit unions include credit counseling services as well as insurance and investment services. State credit union leagues can partner with outside organizations to promote initiatives for credit unions or customers. For example, the Indiana Credit Union League sponsors an initiative called `` Ignite '', which is used to encourage innovation in the credit union industry, with the Filene Research Institute. The World Council of Credit Unions ( WOCCU ) is both a trade association for credit unions worldwide and a development agency. The WOCCU 's mission is to `` assist its members and potential members to organize, expand, improve and integrate credit unions and related institutions as effective instruments for the economic and social development of all people ''. The Credit Union National Association ( CUNA ) is a national trade association for both state - and federally chartered credit unions located in the United States. The National Credit Union Foundation is the primary charitable arm of the United States ' credit union movement and an affiliate of CUNA. Deposit insurance In the United States, federal credit unions are chartered by and overseen by the National Credit Union Administration ( NCUA ), which also provides deposit insurance similar to the manner in which the Federal Deposit Insurance Corporation ( FDIC ) provides deposit insurance to banks. State - Chartered credit unions are overseen by the state 's financial regulation agency and may, but are not required to, obtain deposit insurance. Because of problems with bank failures in the past, no state provides deposit insurance and as such there are two primary sources for depository insurance -- the NCUA and American Share Insurance ( ASI ), a private insurer based in Ohio. In Canada, most credit unions are provincially incorporated and regulated, with deposit insurance provided by a provincial Crown corporation. For example, in Ontario, up to $250,000 of coverage is provided through the Deposit Insurance Corporation of Ontario. See also Bond of association Consumers ' cooperative Cooperative Democratic member control ( cooperatives ) History of credit unions Humanomics Labour Bank Credit unions in Canada Credit unions in the United Kingdom Credit unions in the United States References ^ Jump up to : `` 12 U.S.C. § 1752 ( 1 ), CUNA Model Credit Union Act ( 2007 ) '' ( PDF ). National Credit Union Administration. Archived from the original ( PDF ) on 2009 - 05 - 09. Retrieved 26 August 2015. Jump up ^ O'Sullivan, Arthur ; Steven M. Sheffrin ( 2003 ). Economics : Principles in action. Upper Saddle River, New Jersey 07458 : Pearson Prentice Hall. p. 511. ISBN 0 - 13 - 063085 - 3. Jump up ^ `` Slide 1 '' ( PDF ). Retrieved 2011 - 10 - 09. Jump up ^ Frank J. Fabozzi & Mark B. Wickard, Credit Union Investment Management ( 1997 ), pp. 64 - 65. Jump up ^ Wendell Cochran, `` Credit unions pay for risky behavior by a few '', NBC News ( December 21, 2010 ). Jump up ^ `` Corporate System Resolution : Corporate Credit Unions : Frequently Asked Questions ( FAQs ) '', National Credit Union Administration ( September 24, 2010 ). Jump up ^ `` The Credit Union Difference ''. Credit Union National Association. Jump up ^ ( 1 ) Archived January 15, 2012, at the Wayback Machine. Jump up ^ `` Converts sing praises of credit unions ''. MSN Money. Archived from the original on 2012 - 03 - 09. Jump up ^ Allred, Anthony T. & Adams, H. Lon ( 2000 ). `` Service quality at banks and credit unions : what do their customers say ? ''. Managing Service Quality. 10 ( 1 ). CS1 maint : Uses authors parameter ( link ) Jump up ^ Allred, Anthony T. ( 2001 ). Employee evaluations of service quality at banks and credit unions. International Journal of Bank Marketing. 19. ^ Jump up to : `` What is a Credit Union ? ''. woccu.org. ^ Jump up to : `` Not - for - profit '', noun, Oxford English Dictionary ( 2008 ) ^ Jump up to : `` WOCCU, `` PEARLS : Ratios : R -- Rate of Return and Costs & S -- Signs of Growth ''. Woccu.org. Retrieved 2011 - 10 - 09. Jump up ^ `` Part 4. Examining Process : Chapter 76. Exempt Organizations Examination Guidelines : Section 22. Credit Unions -- IRC 501 ( c ) ( 14 ) ''. Internal Revenue Manual. Internal Revenue Service. Retrieved August 31, 2015. Jump up ^ `` Other Section 501 ( c ) Organizations ''. Publication 557 : Tax - exempt Status and Your Organization. Internal Revenue Service. February 2015. Retrieved August 31, 2015. ^ Jump up to : `` Statistical Report -- World Council of Credit Unions ''. woccu.org. Jump up ^ `` European Association of Cooperative Banks, Annual Statistical Report, 2010 ''. Eurocoopbanks.coop. Retrieved 2012 - 06 - 06. Jump up ^ Percival, Geoff ( March 19, 2012 ). `` 75 % of Irish adults in credit unions ''. Irish Examiner. Archived from the original on April 12, 2012. Jump up ^ Diekmann, Frank J. ( July 2, 2012 ). `` Poland 's CUs : From Zero To Mature In Just 20 Yrs ''. Credit Union Journal. pp. 1, 22. ^ Jump up to : J. Carroll Moody & Gilbert C. Fite. The Credit Union Movement : Origins and Development 1850 to 1980. Kendall / Hunt Publishing Co., Dubuque, Iowa, 1984 Jump up ^ Singh, S.K. ( 2009 ). Bank Regulations. Discovery Publishing House. p. 199. Retrieved October 16, 2014. Jump up ^ `` St. Mary 's Credit Union ''. Retrieved 2009 - 08 - 24. Jump up ^ Bernd Balkenhol ( 1999 ). Credit Unions and the Poverty Challenge. Upper Saddle River, New Jersey 07458 : International Labour Organization. pp. 45 -- 47. ISBN 9789221108528. Jump up ^ `` Review of the 2017 Bank Failures and Their Effects on Depositors ''. Deposit Accounts. Retrieved 2018 - 05 - 06. Jump up ^ `` Indiana credit union reps chosen to take part in ICUL ignite program for innovation ''. Bank Credit News. Archived from the original on 2014 - 02 - 10. Jump up ^ `` Mission ''. WOCCU. Retrieved 2009 - 11 - 25. Cite error : A list - defined reference named `` Raiffeisen '' is not used in the content ( see the help page ). Cite error : A list - defined reference named `` safety '' is not used in the content ( see the help page ). Further reading Ian MacPherson. Hands Around the Globe : A History of the International Credit Union Movement and the Role and Development of the World Council of Credit Unions, Inc. Horsdal & Schubart Publishers Ltd, 1999. F.W. Raiffeisen. The Credit Unions. Trans. by Konrad Engelmann. The Raiffeisen Printing and Publishing Company, Neuwid on the Rhine, Germany, 1970. Fountain, Wendell. The Credit Union World. AuthorHouse, Bloomington, Indiana, 2007. ISBN 978 - 1 - 4259 - 7006 - 2 External links Wikimedia Commons has media related to Credit unions. Credit Union National Association national trade association for credit unions World Council of Credit Unions global trade association for credit unions Association of Asian Confederations of Credit Unions regional federation representing 21 national federations in Asia with 35 million retail members National Credit Union Service Organization directory of all credit unions in the U.S. National Credit Union Foundation charitable arm of credit union industry Cooperative banking Types Building society Credit union Mutual savings bank Savings and loan association See also Co-operative Party Co-operatives UK Consumers ' co-operative International Co-operative Alliance List of cooperatives List of cooperative federations List of worker cooperatives Purchasing cooperative Worker cooperative Cooperatives and mutual organizations Types of cooperatives By governance Consumer Cooperative federation list Cooperative wholesale society Worker ( list ) Employee ownership Workers ' self - management Workers ' control Workplace democracy Business and employment co-operative Purchasing Retailers ' cooperative Other Social cooperative Agent - owned company By purpose Banking Credit union Mutual savings bank Savings and loan association Building society Housing Building Cohousing Student housing Housing society ( egalitarian ) Intentional community Agricultural Collective farming Reforestation Winemaking Wheat pool Utility ( list ) Community wind energy Electric Telephone Mutual education Anarchistic free school Homeschool Democratic education Learning by teaching Mutual insurance Health insurance cooperative Other Food list Recycling Topics Identity Rochdale Principles ICA Statement on the Cooperative Identity Political and economic theories Co-operative economics Cooperative federalism Distributism Economic democracy Mutualism Neo-Capitalism Owenism Social enterprise Socialism Socially responsible investing Solidarity economy Key theorists G.D.H. Cole Charles Gide David Griffiths William King Robert Owen Friedrich Wilhelm Raiffeisen David Schweickart Rochdale Pioneers Beatrice Webb By region Canada Ukraine United Kingdom United States Organizations List of cooperatives worker energy federations International Co-operative Alliance Co-operative Party History of the cooperative movement. coop NARA : 10637485 NDL : 00571186 NKC : ph182346 Retrieved from `` https://en.wikipedia.org/w/index.php?title=Credit_union&oldid=839937789 '' Categories : Credit unions Banks Cooperative banking Credit Mutual organizations Rural community development Social economy Community building Hidden categories : Pages with reference errors Pages with incorrect ref formatting Webarchive template wayback links CS1 maint : Uses authors parameter Wikipedia references cleanup from July 2015 All articles needing references cleanup Articles covered by WikiProject Wikify from July 2015 All articles covered by WikiProject Wikify Articles containing potentially dated statements from 2012 All articles containing potentially dated statements All articles with unsourced statements Articles with unsourced statements from January 2012 Talk Contents About Wikipedia Azərbaycanca Беларуская ( тарашкевіца ) ‎ Català Čeština Eesti Español Esperanto فارسی Français Frysk 한국어 Bahasa Indonesia Italiano Lietuvių Nederlands 日本 語 Polski Português Română Русский Simple English Suomi Svenska Tagalog ไทย Українська Tiếng Việt 中文 19 more Edit links This page was last edited on 6 May 2018, at 18 : 04. 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Question: what is a checking account called at a credit union
Answer: share draft accounts