The association's members promised to deposit a certain sum regularly into the association. Members then took turns borrowing money to build their homes. In short, people had arrangements for funding for home building in areas where other sources of financing were not available. In the 1930's, the Federal Home Loan Bank Board was created to supervise and regulate the individual savings and loan associations. Credit unions, which are owned and operated by and for their members, are another type of depository institution.
Costs are generally low because a sponsor often provides management, help, and office facilities.
Most credit unions are organized around an employer, meaning that contributions generally are deducted directly from a worker's paycheck. Recently, some credit unions began to offer checking deposits. Known as share drafts, they look like any other check or NOW account and provide members with a way to earn interest on deposits that are also available on demand. The positive aspect of credit unions is that they make low interest loans to their members beacuse they are non profit, member service organizations.