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What Is A Credit Union?
A credit union is a cooperative financial institution, owned and controlled by the people who use its services. These people are members. Credit unions are not-for-profit, and exist to provide a safe and convenient place for members to obtain financial services.
Credit unions are unique in the world of financial institutions. Although we offer many of the same services as other financial institutions, we are structured differently. Credit union differences include:
Who can use credit union services
Credit union members share a common bond, such as where they work or live. Credit unions can only serve those members within that limited field of membership.
Ownership
Credit unions have members, not customers. As a financial cooperative, each person who deposits money in a credit union becomes a member of the credit union because his deposit is considered his share of the ownership. That means credit unions are member-owned. Each member is also an owner of the credit union.
Governance
Credit unions are run by a board of directors who are elected by and from the membership. Each member has one vote, regardless of the amount on deposit at the credit union. Most credit union boards of directors serve as uncompensated volunteers.
Who gets the “Profits”
Credit unions are not-for-profit. After expenses are paid and reserves (which are required by law to help keep the credit union safe and sound) are set aside, surplus earnings are returned to members in the forms of higher dividends, lower loan rates and free or lower-cost services. This unique structure allows credit unions to make decisions that are in the best interest of their members.
Taxation
Credit unions pay many taxes, including payroll and property taxes. Credit unions are exempt from federal corporate income tax because they are not-for-profit financial cooperatives. Extra earnings are returned to members in the form of dividends to account holders, more products & services, better rates or lower fees.
Account Insurance
Deposit accounts at Mississippi credit unions are
insured up to $250,000 by the National Credit Union Administration (NCUA), a U.S. government agency.
Philosophy
The credit union slogan is “Where People Are Worth More Than Money” and our philosophy is “People Helping People.” Both demonstrate credit unions are committed to being the consumer-friendly choice in today’s financial services marketplace.
The Bottom Line
Credit Unions are not-for-profit, democratically-controlled, member-owned, financial cooperatives – a structure that is different from any other U.S. financial institution. To this day, all credit unions, large or small, regardless of their service offerings, are still without capital stockholders, are still organized and operated for mutual purposes, and are still not-for-profit. We are, and always will be, the financial alternative “Where People Are Worth More Than Money.”