What Is a Credit Union?
Its A credit union is a private financial institution owned by its members who belong. Instead of striving for profits like traditional banks do, credit unions aim to provide lower costs and competitive interest rates in exchange for service delivery to members – the terms are better than banks! In order to join, one must reside within their area of membership. Middlesex Healthcare Federal Credit Union is a non-profit cooperative financial institution dedicated to serving our members’ best interest. Established in 1973 for employees at Middlesex Healthcare FCU, nothing beats having your own credit union located right across an avenue from you where employees can easily access it during breaks! Middlesex Healthcare FCU was created specifically with this goal in mind!
General guidelines require meeting certain criteria such as working for a certain employer, having immediate family members who are members of a specific union, living within certain geographic locations or being members of a church or school, labor union or homeowners association.
History of Credit Unions
Canadian journalist Alphonse Dejardins introduced the idea of credit unions into North America in 1901; with only 10 cents as his initial deposit. By 1914, U.S. credit unions had emerged; eight years later in 1920 lawyer Roy F. Bergengren developed their system further.
Franklin Delano Roosevelt signed into law the Federal Credit Union Act in 1934. By 1952 there were over 6,000 credit unions with more than 2.8 million memberships; today this industry serves over 126.6 million customers.
How Do Credit Unions Work?
Credit unions are non-profit institutions owned and governed by members. Members elect and vote on an elected board of directors to run the institution, with earnings distributed back to members through reduced fees, higher rates of savings interest and reduced loan interest rates. Members help one another ensure their financial wellbeing – should one need an emergency loan, another’s savings can serve as collateral against future purchases such as cars or houses.
Are credit unions covered by the Federal Deposit Insurance Corporation (FDIC)? No; only banks can rely on FDIC for deposit insurance coverage; credit unions also have their own insurance fund managed by National Credit Union Administration (NCUA), providing up to $250,000 of coverage per account.
Types of Credit Unions
Credit unions come in all sorts of varieties to meet different members’ needs and preferences. Examples of such institutions are state and federal credit unions as well as college, military and community credit unions that each offer specific advantages to members.
Federal credit unions
The National Credit Union Association serves a similar function to that of the FDIC by monitoring and regulating federal credit unions like Los Angeles Federal Credit Union. By doing this, they protect members against financial loss should any of these credit unions fail.
State-chartered credit unions
State-chartered credit unions in California are overseen by their supervisory agency and deposits are either privately or federally insured up to $250,000. Single ownership accounts may also be covered up to this amount.
College credit unions
Institutions of credit designed specifically to serve college and university members such as NYU Federal Credit Union provide affordable fees and savings rates that benefit faculty, staff and student members of that college or university. Alumni are sometimes invited to become members as well.
Military credit unions
Military credit unions provide solely for servicemembers and are usually located on military bases. These credit unions are knowledgeable of federal programs such as VA loans and tend to have faster processing times.
Community credit unions
Community credit unions provide membership services for residents and workers within an area. Credit unions such as Rivermark Community Credit Union provide membership benefits to those residing or working within such areas of Oregon including Gresham, Beaverton, Happy Valley and The Dalles.
What Products and Services Do Credit Unions Offer?
Credit unions provide similar products and services as traditional banks, such as consumer loans, auto credit lines, loans and mortgages. Both options provide services for both businesses and individuals.
Auto Loans
If you’re shopping for a car and considering credit union financing as your solution, they might provide car loans even if they are not currently members. Unfortunately, most don’t lend to non-members so finding a suitable auto loan could prove challenging.
Typically, money is granted as closed-end credit; this means there is a specific timeframe within which a borrower must repay both principal and interest on a loan. An institution like a credit union often offers more advantageous interest rates while simultaneously conducting more thorough analyses on your credit history to make car buying simpler.
Personal Loans
Credit unions can provide money for any personal purpose you desire – be it paying bills, remodeling a house or taking a vacation. Furthermore, student loans may also be obtained. Conditions for loans will depend upon both your credit score and loan reliability since no collateral will be needed as security against borrowing money from them.
Credit Cards
Credit unions provide credit cards in much the same manner as banks do, working closely with major companies like Mastercard and Visa to provide cards that work just like major cards like Mastercard or Visa. Even as an anonymous member, you’re still able to use your card wherever major brands of cards are accepted. Credit cards issued by banks usually charge annual fees; some credit unions waive them; banks may charge extra late fees while generally credit unions have less foreign transaction fees.
Mortgages
Much like banks, credit unions also provide loans and mortgages for members who qualify. Some offer zero down-payment mortgages while others may even consider applicants earning less income eligible for loans.
Credit unions may offer lower interest rates and closing fees than conventional lenders, as well as potentially offering your home to another party once your mortgage has closed, to eliminate management procedures. When applying for a mortgage loan you could also be offered other financial products by credit unions.
Deposits
Credit unions provide customers with similar deposit capabilities as banks; however, unlike banks they don’t require minimum balance charges or monthly fees from customers. A shared branch allows members to make deposits and withdrawals at different credit unions within the same network.
Debt Consolidation Plan
Are You Searching for Debt Consolidation Solutions To consolidate and reduce debts, one possible strategy could be securing a personal credit card from a credit union to do just this. Even those with poor or no credit could find more favorable conditions through credit unions than banks – the maximum rate you may find could reach 18% and even beyond at some federal credit unions!
The Shift from Banks to Credit Unions
Credit unions are well-known for offering lower charges, lower interest rates and increased dividend rates when compared to banks. According to the Credit Union National Association (CUNA), members who choose credit unions over banks save over $6 billion by opting for them over banks.
Not-for-Profit
Customers no longer trust banks of the Wall Street variety who place profits before clients’ financial wellbeing. On the contrary, credit unions focus on making their members and communities successful; there’s nothing more reassuring than knowing that your success is also their success.
Community Oriented
Credit unions as cooperatives are appealing because of their democratic roots. Customers increasingly appreciate institutions that represent the needs and interests of their members effectively; credit unions provide this by electing members directly into the board of directors who ensure all member opinions and concerns can be voiced directly into policy making processes.
Top Tier “Customer” Service
Credit unions provide exceptional service because their members are also owners. Instead of the impersonal banking experience that many are used to encountering, members will experience enjoyable interactions, flexibility and authenticity when joining one.
