Credit unions are cooperatives with one primary mission:
To serve their member/owners.
Credit Unions Are Different
The opening statement presents the essence of what sets credit
unions apart from commercial banks and other financial institutions. As nonprofit cooperatives, credit unions have members,
not customers. And those members—not stockholders or Wall Street—are always the number one priority.
The credit union cooperative is owned and controlled by the members who use its services. A member’s account
represents his/her share of ownership in the cooperative. And since a credit union is nonprofit and has no stockholders
to placate, it is able to keep its members best interests at the fore when setting rates and fees.
By contrast, banks and savings and loans are for profit entities that have stockholders who expect to earn healthy
returns on their investments. Therefore, a bank or savings and loan’s obligation to its stockholders may override its
responsibility to provide low cost loans, low maintenance fees and competitive savings rates to its customers.
Credit Unions Have Member- and Service-Oriented Operating Principles
Credit unions have a long history of helping members reach their financial goals. From the first U.S. cooperative
efforts in the late 1800s, through the Great Depression, to present day, credit unions are now and always have been
"not for profit, not for charity, but for service." To underscore and formalize this pledge to member service, the
National Cooperative Business Association developed seven principles of cooperation in the mid-1990s. The Credit Union
National Association (CUNA) Cooperative Alliances Committee later expanded these principles in order to more accurately
reflect the structure and characteristics of credit unions.
Credit unions are voluntary, cooperative organizations, offering services to people
willing to accept the responsibilities and benefits of membership, without gender, social, racial, political or religious
Many cooperatives, such as credit unions, operate as not-for-profit institutions with volunteer board of directors.
In the case of credit unions, members are drawn from defined fields of membership.
Democratic Member Control
Cooperatives are democratic organizations owned and controlled by their members,
one member one vote, with equal opportunity for participation in setting policies and making decisions.
Members’ Economic Participation
Members are the owners. As such they contribute to, and democratically
control, the capital of the cooperative. This benefits members in proportion to the transactions with the cooperative
rather than on the capital invested.
For credit unions, which typically offer better rates, fees and service than for-profit financial institutions,
members recognize benefits in proportion to the extent of their financial transactions and general usage.
Autonomy and Independence
Cooperatives are autonomous, self-help organizations controlled by their members.
If the cooperative enters into agreements with other organizations or raises capital from external sources, it is done so
based on terms that ensure democratic control by the member and maintains the cooperative autonomy.
Education, Training and Information
Cooperatives provide education and training for members, elected
representatives, managers and employees so they can contribute effectively to the development of the cooperative.
Credit unions place particular importance on educational opportunities for their volunteer directors, and financial
education for their members and the public, especially the nation’s youth. Credit unions also recognize the importance of
ensuring the general public and policy makers are informed about the nature, structure and benefits of cooperatives.
Cooperation Among Cooperatives
Cooperatives serve their members most effectively and strengthen the
cooperative movement by working together through local, state, regional, national, and international structures.
Concern for Community
While focusing on member needs, cooperatives work for the sustainable development of
communities, including people of modest means, through policies developed and accepted by the members.