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What is a credit union and how it is different from Other Financial Institutions (OFIs)

A credit union is a not for profit financial cooperative, owned and operated by its members. Unlike other financial institutions (OFIs), credit unions have no stockholders; instead, they are owned by their member depositors. When you join a credit union, you become an owner. After necessary reserve and capital levels are achieved, profits made by credit unions are returned to the member/owners through lower rates on loans, higher rates on deposits, and no or low fee services, In contrast, at an OFI, rates and fees are driven by stockholders who consider their ownership an investment and place more emphasis on profits, not service.

Another distinct difference between a credit union and an OFI is in the leadership of the organization, the board of directors. At a credit union, the board of directors is elected by the membership of the credit union from within the membership of the credit union. Upon joining a credit union, you become eligible to vote for the board of directors who are serving you. Credit union board and committee members volunteer their time and being members themselves, they care about the organization and the membership. They simply have the members’ best interest in mind.

The foundation of their credit union philosophy is people helping people.

Members join together with each other, in a cooperative form and structure, to encourage savings and use collective moneys to make loans.

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