As a member of Money FCU, you know credit unions are always striving to serve their members and community as much as possible. We value each member’s input as an equal owner in our business. We work for our members, not stockholders. That’s why we are “not-for-profit”. In turn, we offer flexible loan terms, low-cost accounts and higher dividends. This helps members achieve and maintain financial wellness. However, are you still asking what is a credit union?
Both credit unions and banks provide consumers with financial services and products. However, there are many distinctions between the two. The primary difference lies at its core.
Banks generate profit for owners. On the contrary, credit unions provide members with a place to manage their finances at the best possible terms.
Putting members first is deeply rooted in the history of the movement.
The first not-for-profit financial institution was established in 1864 by Friedrich Raiffeisen in southern Germany. Raiffeisen proposed that all community members pool resources. By doing so, individuals in need of loans could easily access the necessary funds. His idea was well-received and the first credit union model was soon established.
In 1909, the movement reached American shores. With Edward Filene serving as its pioneer, the movement gained momentum and continued to grow. In 1920, Edward hired attorney Roy F. Bergengren to assist him in the movement’s expansion. Roy created a more organized concept for the credit union we know today.
In 1934, President Franklin D. Roosevelt signed the Federal Credit Union Act into law.
Now, federally chartered credit unions in every state were legally able to create not-for-profit cooperatives. They were meant to promote smart spending and sound financial practices.
In 1970, the public’s confidence in this new bank-like model grew stronger as the National Credit Union Share Insurance Fund was established. With it, deposits became federally insured much like the FDIC insures bank deposits.
The movement was growing at its most rapid pace. Assets in America tripled between 1970 and 1979. Then, in 1977, another credit union-friendly regulation was signed into law. It empowered them to offer more services and products to members.
Today, the movement continues to thrive and is backed by the “full faith and credit of the United States Government.” Together, credits unions serve over 103 million members and always keep the member as their top priority.
Here, we’re proud to join the thousands of institutions committed to the credit union mission. As a member-owned cooperative, our only objective is your success.
We hope that answered your question of what is a credit union? Be a part of history by calling, clicking, or stopping by Money FCU today to experience the credit union difference – it’s where you belong.