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What Is A CU?

A credit union is a financial cooperative. What does this mean?

  • It means depositors (members) own the institution and are not just customers.
  • It means members elect a Board of Directors to govern operations.
  • It means, in most cases, Directors are volunteers (receive no pay).
  • It means there are no stockholders... only members.
  • It means capital comes from retained earnings, not from selling stock.
  • It means credit unions do not operate for the purpose of profit, but to serve members.
  • It means no insiders are getting rich off the operation of the credit union.
  • It means profits are used to pay better than average dividends, offer lower than average loan rates, pay operating expenses and build capital (reserves) for the credit union.
  • Credit unions have a defined "field of membership" (eligibility requirements to become a member).

Do all members share equal ownership in the credit union?

  • No, ownership is based on dollars on deposit. If the credit union were ever to liquidate, retained earnings (capital) would be distributed according to ownership.
  • That being said, each member has only one vote at membership meetings regardless of dollars on deposit.

For more information about credit unions, visit these web sites: