People Helping People
"Credit unions exist to help people, not make a profit. Our goal is to serve all of our members well, including those of modest means - every member counts. Our members are fiercely loyal for this reason. They know their credit union will be there for them in bad times, as well as good. The same people-first philosophy causes credit unions and our employees to get involved in community charitable activities and worthwhile causes." - Credit Union National Association (CUNA)
Not for profit, not for charity…
The first U.S. credit union opened in New Hampshire in 1908; however it was not until 1934 that President Franklin D. Roosevelt signed the Federal Credit Union Act, forming a national system to charter and supervise federal credit unions. By 1935, credit unions were busy helping Americans get through the Great Depression. The harsh economic climate made it very difficult for the average consumer to borrow money or gain essential services from traditional financial institutions. As a result, Americans were turning to credit unions for the loans and banking services needed by their families. By this time, 39 states had adopted credit union laws, and 3,372 credit unions were already serving over 640,000 members. The treasurer of a Midwestern credit union stated that credit unions were "not for profit, not for charity, but for service," and that philosophy still holds true.
Credit unions have continued to look out for their members’ interests and provide a level of service that is not generally available at other financial institutions. Whether it’s supplying the tools to manage basic personal or family finance, providing a loan to cover unexpected medical bills, giving financial counseling to a member whose company closed its doors, helping to fulfill a need in the community, or simply offering a better deal on a car loan, credit unions strive to make a difference for their members and the communities they serve.
But for service.
Credit unions are unique financial institutions in that they are created not for profit, but to serve the member-owners who save and borrow there. Unlike most other financial institutions, credit unions do not issue stock or pay dividends to outside stockholders. Instead, earnings are returned to members in the form of lower loan rates, higher interest on deposits, and fewer and lower fees.
By federal statute, the general public cannot join credit unions. Instead, people qualify for credit union membership because they are united by a common bond – such as their employer, church, social or civic organization, or community. Credit unions are exempt from Federal and most State taxes because they are member-owned, democratically operated, not-for-profit and managed by volunteer boards of directors.
Credit unions worldwide have a common mission of meeting the credit and savings needs of consumers; they exist to serve all members well, including those of modest means who have traditionally been underserved by banks and other institutions. Beyond this mission, they seek to improve the lives of members and others by promoting financial literacy, supporting worthwhile charities, and volunteering in their own communities.