Member Connect Find a Branch How Credit Unions Work Self-governed and member-owned, credit unions pass profits back to members through lower loan rates and higher dividends on deposits. You might think credit union is just another way to say bank. But it’s not! Although we often offer the same products and services, there are many differences. Credit unions are not-for-profit cooperatives owned and governed by members; banks operate for profit and are owned by stockholders, who aren’t necessarily customers of that bank. Credit unions also universally follow a set of cooperative principles created in 1844. At LGFCU, these principles aren’t just a list, but the core of everything we do. We live the cooperative principles The original seven cooperative principles serve as a foundation and continue to contribute to the great success of many cooperatives around the world today. As credit unions continue to grow and evolve, LGFCU has led the way for the creation of an eighth cooperative principle focused on diversity, equity and inclusion. In 2019, the Credit Union National Association adopted this 8th Cooperative Principle, establishing it as a cooperative principle for America’s credit unions. Voluntary membership. Credit unions are voluntary, cooperative organizations, open to all people eligible to use their services and willing to accept the responsibilities of membership — without gender, social, racial, political or religious discrimination. Democratic member control. Credit unions are democratic organizations owned and controlled by their members, who each have one vote and equal opportunity to participate in setting policies and making decisions. Member economic participation. Members are the owners, contribute to and democratically control the capital of the credit union, which directly impacts the success of a credit union. Autonomy and independence. Credit unions are independent, self-help organizations controlled by their members. Education, training and information. Credit unions provide financial education for members, and training for all volunteers and employees so they can contribute effectively to the development of the cooperative. Cooperation among cooperatives. Credit unions serve their members most effectively and strengthen the cooperative movement by working together through local, state, regional, national and international structures. Concern for community. Credit unions work for the sustainable development of their communities through policies approved by their members. Diversity, equity and inclusion. Cooperatives seek to incorporate diversity, perform equitably and ensure inclusion at all levels of their organizations to better serve members, show members they are valued and ensure members receive equitable service. Whenever you’re doing business with LGFCU, online or offline, you’ll see the eight cooperative principles in action. For more on how all of these principles are incorporated into what we do for you every day, read the LGFCU story. How does a credit union work? Credit unions offer products and services to a defined field of membership. That field of membership is a defined group or area. This group might be a particular profession, workplace, church, school, community, or other particular group. Although the field itself is defined, membership is all-inclusive within that field. Profits are passed back to members through lower loan rates, higher dividends on deposits, expanded financial products and services, and a more personal member experience. Credit unions vs. Banks Credit Unions Banks Providing services to members Purpose Providing services to customers at a profit Not-for-profit cooperatives owned and operated by members who own an equal share of the organization Definition Businesses owned by stockholders with the intention of making money from their investment Democratically structured. Each member has one vote, regardless of the level of personal investment. Structure Depositors have no vote; only stockholders may vote on goals, functions and services. Directors are elected from among the membership and are unpaid volunteers. Directors Directors are elected by stockholders and paid for their time. Earnings are returned to members in the form of dividends, higher savings rates, lower loan rates and improved services. Earnings Earnings are returned to stockholders. Nearly 5,100 credit unions in the United States, comprise nearly 125 million members Credit unions in the United States have approximately $1.85 trillion in combined assets. Size More than 5,000 banks and savings and loans in the United States Combined, banks and savings and loans have more than $21.8 trillion in assets. Sources: Industry at a Glance by NCUA.gov and Statistics at a Glance by FDIC.gov; all figures as of December 2020. Credit unions sometimes say things differently You may not be familiar with words credit unions use for some products and services. Here’s a starter list: Member: an individual who maintains his share in the credit union. Each member has voting privileges and all members are equal. Share: an amount required for deposit to join a credit union. This amount also represents ownership. All members receive one share of credit union ownership when they join. Dividend: any declared or prospective earnings on a member's shares in a credit union, to be paid to a member's account. NCUA Deposit Insurance: The National Credit Union Administration (NCUA) is a federal agency that oversees the regulation of federal credit unions. NCUA Deposit Insurance protects credit union members against losses, just like the FDIC protects bank customers. Next Steps Want to know about the benefits of LGFCU membership? Visit Why Join LGFCU. Find out how to join. If you’re ready to get started, get your Share Account. Membership Resources Related Calculators The Benefits of Compounding Related Links Members elect 2 to board LGFCU again ranked best credit union in NC Celebrate International Credit Union Day Website LGFCU Home Sitemap Company Careers Contact Us Media Contact Security Social Media Legal HMDA Legal Information Privacy Notice Connect with us: Facebook Twitter LinkedIn Instagram Federally insured by NMLS #1079297 323 West Jones Street, Suite 600 Raleigh, NC 27603 © 2021 Local Government Federal Credit Union. All rights reserved. Rate comparisons used throughout the LGFCU site are based on the lowest rate available. Your calls with the Credit Union may be recorded. Share your feedback Routing Number: 253184537 Wire Transfer ABA Routing Number: 253177049