They are restricted to servicing only those from the credit union s field of membership, who obtain a membership share. With the purchase of one share, a member is given one vote. Credit unions have non-profit tax status. In 1937, Congress exempted federal credit unions from federal and state income taxes because of the credit union structure. Member services are very similar to those provided by other financial institutions, but there are a few nuances.
Many credit unions are small in size and offer very basic services.
Loans to members are credit unions major investment. These loans are consumer type loans, primarily home equity, automobile, and residential real estate loans. Credit unions often offer higher interest rates on savings and lower loan rates than other lenders and deposit takers because they save money due to their non-tax status and volunteer boards and committees. While many credit unions offer most of the same services as the other financial institutions, the accounts are named differently. Share draft accounts, share certificates, and regular share accounts are comparable to checking, certificates of deposit, and saving accounts.