Credit unions are subject to similar, and often stiffer, safety and soundness regulation as banks and other depository institutions. Credit unions are formed around groups having some common bond or association, such as the employees of a particular company, or the members of a civic association or club, or the residents of a particular local community. Federal law in fact prohibits credit unions from serving the general public beyond the particular field of membership for each credit union. Consequently, credit unions are the only financial institutions that are not allowed to serve the general public, but are limited in each case to a specific narrow membership group. The great majority of credit unions are formed by employers to serve their workers.
Credit unions form a relatively small part of the nation's financial industry.
By contrast, the banking industry is 13 times larger than credit unions combined, and the average bank is 16 times as large as the average credit union. Indeed, Chemical Bank's announced merger with Chase Manhattan bank will alone produce a single bank that is about as large in terms of assets as all credit unions combined. Nations Bank and Bank America would have total assets of over one and a half times combined credit union assets. Credit unions are basically working people pooling their assets to provide essential credit and other financial services to each other. As a result, they often provide loans and services to people of modest means who can't get credit or financial services anywhere else.