A credit union is a member-owned, nonprofit cooperative financial institution formed for the purpose of encouraging savings by offering a fair return, using those savings to make loans at competitively low interest rates to members, and providing other financial services. Members are united by a common bond of association and democratically operate the credit union under state or federal regulation. Credit unions exist only to serve their member-owners. Consumer surveys repeatedly show members are more satisfied with the service they receive from their credit union than are customers of banks or savings and loans.
Credit unions are democratic organizations directed by their members.
Members have the power to direct credit union policy and, if dissatisfied, can even replace the board of directors. Their nonprofit status enables credit unions to operate at a lower cost than many for-profit institutions and helps them to offer competitive loan and savings rates. For instance, credit unions usually charge lower interest on credit cards than most other providers, and many credit unions charge no annual card fee. Credit unions are for everyone, but not everyone can belong to every credit union. Being employed at the same workplace, belonging to the same church, or living in the same community are examples of some of the more common fields of membership.