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Credit Unions are nonprofit, cooperative financial institutions
that are owned and controlled by the people who use its services.
These people are members. Credit unions serve groups that share
something in common, such as where they work, live, or go to
church. Organized to serve and democratically controlled, they
exist to provide a safe, convenient place for members to save
money and to get loans at reasonable rates. Members pool their
funds to make loans to one another. The volunteer board that
runs each credit union is elected by the members of that particular
credit union. Not for profit, not for charity, but for service is
a common credit union motto.
Credit unions, like other financial institutions, are closely
regulated. In addition, they operate in a very prudent manner.
What makes a credit union different from a bank or savings & loan? Like credit unions, these financial
institutions accept deposits and make loans--but unlike credit unions, they
are in business to make a profit. Banks and savings & loans are owned
by groups of stockholders whose interests include earning a healthy return
on their investments. On the other hand, credit unions are owned by its members.
Volunteer boards of directors (that the members themselves elect) are responsible
for running and overseeing credit union business. Any profit that a credit
union makes is returned to its members in higher dividend rates, lower loan
rates, and personalized service.
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