What is a Credit Union?

A Common Bond

"The credit union movement began because of one simple idea: the average man has the ability within himself to control his own economic destiny." - Author Unknown

Credit unions are financial institutions formed by an organized group of people with a common bond.  This can be an employer, civic or religious group, place of residence, etc.  Members of credit unions pool their assets to provide loans and other financial services to each other.  Earnings from credit union operations and investments are returned to the membership (not outside stockholders) through dividends, low loan rates, and provision of financial products at little or no cost to the member.

Credit Unions

Credit Unions are not-for-profit financial cooperative owned by all members. Excess earnings are applied to lower interest rates on loans, higher interest rates on savings, and fewer/lower fees. The credit union strives to offer members loans and financial products at the lowest cost possible. Credit unions are also democratically controlled and operated by a volunteer Board of Directors from local communities elected by the membership. Each member has one share and one vote regardless of how much money the member has on deposit with the credit union.

Other Financial Institutions

However, for-profit financial institutions are owned by a few stockholders. If a customer doesn't own stock, he or she is not an owner. Profits are also paid to stockholders. For-profit institutions strive to sell customers loans and financial products at the highest cost possible, producing the most revenue. Only stockholders vote for the Board of Directors, and level of control is based upon the amount of stock owned. Board of Directors are paid, and may not be from the community served by the institution or even use its services.

Like Banks, Credit Unions Are Federally Insured

Credit union deposits are federally insured. The National Credit Union Administration (NCUA) is the federal agency that charters and supervises federal credit unions, as well as insuring the savings in federal and most state-chartered credit unions in the United States through the National Credit Union Share Insurance Fund (NCUSIF).

Like FDIC (which insures deposits at banks), the NCUSIF is a federal fund backed by the full faith and credit of the United States government.  NCUA currently insures deposits up to $250,000.  Members may qualify for more than $250,000 in coverage, depending on how accounts are structured.  Not one penny of insured savings has ever been lost by a member of a federally insured credit union.

Deposits with Coosa Pines FCU are insured up to an additional $250,000 through Excess Share Insurance, Inc., a division of American Share Insurance, the nation's largest provider of private share insurance to credit unions since 1974.  Members may qualify for more than $250,000 in coverage, depending on how accounts are structured.