After operating expenses and reserve requirements are met, the remaining loan income is returned to the members as dividends and other financial services. As a result, credit unions are able to pay high dividends on savings and charge low interest rates on loans. As of January 1997, there are more than 12,000 credit unions in the United States. About 735 of these are in California. Of nearly 70 million credit union members nationwide, more than 7.7 million are in California.
Credit unions exist only to serve their member-owners.
Surveys repeatedly show members are more satisfied with the service they receive from their credit union than bank or savings and loan customers are with their institutions. Because credit unions are democratic, member-owned cooperatives, members have the power to direct credit union policy. If the majority of members are dissatisfied with the directors who set the policies of their credit union, they have the power to replace them. This structure is in contrast to for-profit, public companies where stockholders vote according to the number of shares of stock they own. 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.