What is a Credit Union?
A credit union is a group of people (identified as Members) formed around a common bond such as employment, geographic area, or a specific interest. You may find credit unions where the common bond is that they live in a specific city, work for one employer, or have a specific job, like being a teacher. Sometimes credit unions have multiple common bonds that can qualify your eligibility for membership, like at Credit Union of America.
The primary purpose of a credit union is for the Members to put their funds into a variety of savings and investment accounts which supplies the money for the Members that need to borrow by means of auto, home, or personal loans. The interest that is paid by the borrowers is income to the credit union. The net income (after expenses) is returned to the membership in the form of dividends (interest) and/or new financial services, branches, etc. This is a primary difference between credit unions and banks. Credit Unions are “not-for-profit” and our net income is returned to the membership as a whole. At a for-profit bank, the income is returned to a small group of stockholders. A not-for-profit credit union is always working for the entire membership. Join CUA and you can start enjoying the member benefits of better interest rates on savings, lower rates on loans, and low or no-cost financial services!