Q&A

Credit Union and Money hit the streets to find out what people knew about credit unions and how many were a member of a credit union. The video links below are some of the responses we got.

 

 

Street Videos - Click on the links below to view each video 

Video #1  •  Video #2  •  Video #3  •  Video #4  •  Video #5  •  Video #6  •  Video #7  •  Video #8

 

 

What is a credit union?
(Click here for answer)

A credit union is a cooperative financial institution, 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. Credit unions are not-for-profit, and exist to provide a safe, convenient place for members to save money and to get loans at reasonable rates.
Credit unions, like other financial institutions, are closely regulated. And they operate in a very prudent manner. The National Credit Union Share Insurance Fund, administered by the National Credit Union Administration (NCUA), an agency of the federal government, insures deposits of credit union members at more than 11,000 federal and state-chartered credit unions nationwide. Deposits are insured up to $250,000.
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 investment.

Why join a credit union? (Click here for answer)

Credit unions exist only to serve their member-owners. Consumer surveys repeatedly show members are more satisfied with the service they receive from their credit union than are customers of banks or savings and loans. Credit unions are democratic organizations directed by their members. Members have the power to direct credit union policy and, if dissatisfied, can even replace the board of directors. Credit unions practice a one-member, one-vote philosophy for all elections, unlike for-profit financial institutions whose stockholders vote according to the number of shares of stock they own. Their nonprofit status enables credit unions to operate at a lower cost than many for-profit institutions and helps them to offer competitive loan and savings rates. For instance, credit unions usually charge lower interest on credit cards than most other providers, and many credit unions charge no annual card fee.

What is the purpose of a credit union? (Click here for answer)

The philosophy of the credit union movement is Not for Profit, Not for Charity, But for Service. Credit unions promote thrift and teach the wise use of credit. Credit unions encourage their members to develop a systematic savings program and they provide a source of low-cost credit. Because credit unions are not-for-profit and have low overhead costs, they are usually able to offer lower interest rates on loans and higher dividends on members' shares (savings). A credit union is also non-profit in the sense that its purpose is to serve the members, not to make money. It needs money to provide services and benefits. But money is the means, not the end itself.

Who may join a credit union? (Click here for answer)

Every credit union serves a specific field of membership as defined by its charter. Anyone who falls within the common bond of the credit union may join and share in its ownership. A common bond can be defined as the employees of a company, members of a civic or church group, residents of a community or numerous groups together. Generally, persons within a member's family, by blood or marriage, may also join.

How are credit unions operated? (Click here for answer)

Credit unions are democratically controlled by their members. The members, themselves, elect a board of directors from among the membership, which is responsible for setting policy. Day-to-day operations are handled by paid professionals, or in the case of a small sized credit union, by volunteers.

Is my money safe in a credit union? (Click here for answer)

Yes, your money is insured by the National Credit Union Share Insurance Fund (NCUSIF), a federal fund created by Congress in 1970 to insure member's deposits in credit unions up to the $250,000 federal limit. Administered by the National Credit Union Administration, the NCUSIF is backed by the "full faith and credit" of the U.S. Government.

Who governs credit unions? (Click here for answer)

A credit union receives its authority to operate by obtaining a federal or state charter. Federally chartered credit unions follow the regulations set by the Federal Credit Union Act, and state chartered credit unions follow those under the State Credit Union Act. Annual examinations and oversight is conducted by the supervisory agencies—the National Credit Union Administration (NCUA) for the federal credit unions and the Michigan Office of Financial and Insurance Regulation for credit unions administered under Michigan laws.

How many credit unions are there? (Click here for answer)

There are 74 credit unions in Nebraska, and a total of 8,662 credit unions in the U.S.

How did the credit union idea originate? (Click here for answer)

1849 is generally accepted as the year that the first credit union was organized. Friedrich Wilhelm Raiffeisen, mayor of a small German town whose inhabitants had suffered heavy financial losses due to a crop failure and a depression, conceived the idea. He believed that by pooling small sums of money, a fund could be established from which loans could be made at a low rate of interest. Now, as then, credit unions make small loans that other financial institutions would consider too small for processing.

When were credit unions first organized in the united states? (Click here for answer)

The first U.S. credit union was formed in Manchester, New Hampshire in 1909. This was accomplished with the help of Alphonse Desjardins, a Canadian journalist, who had introduced the idea to Canada in 1901.

How did the credit union movement expand in the united states? (Click here for answer)

Edward A. Filene, the famous Boston merchant, was on a world tour in 1909 and witnessed credit unions in action...first in India and later in Europe. When he returned home and learned that there was such an organization in New Hampshire, he began a one-man campaign to extend the idea in this country. He is reported to have used more than a million dollars of his personal funds for this purpose. He succeeded in getting state laws giving credit unions legal status, and in 1934 he saw his dream come true when the United States Congress enacted a federal credit union law. Since then the movement has grown tremendously.

What is the difference between credit unions and banks? (Click here for answer)

While consumers may think that credit unions look like banks from the outside, they are very different on the inside. Credit unions and banks typically offer similar products and services, which can frequently lead to confusion. Review the chart below to discover the differences between banks and credit unions.

Credit Unions

Banks

Not-for-profit cooperatives

For-profit organizations

Credit unions returns profits to members in the form of lower loan rates, higher savings rates, and free or low-cost services.

Banks returns profits to shareholders.

Each person who deposits money into the credit union is a member with a share of ownership.

Customers have no ownership in the corporation.

Credit unions are controlled by Board of Directors elected by members.

Banks are controlled by stockholders who elect the Board of Directors.

Most credit union board members are volunteers.

Bank board members are generally paid for their service.

Credit unions are only allowed to serve a select group of individuals that have a common bond such as where they work, live or even their religion.

Banks can serve anyone in the general public.

How does everyone benefit from credit unions? (Click here for answer)

Credit unions provide numerous benefits to not only their members but also to consumers and communities. Keep reading to discover how credit unions make a difference in the lives of all Nebraskans.

Credit unions benefits to members

Nebraska credit union members save approximately $20,740,694 a year by using a credit union rather than a bank.

This savings works out to about $51 per a member and $97 per household. Credit unions are able to offer these savings because they exist to serve members not profit from them. The profits a credit union makes are returned to members in the form of lower fees, better rates on loans and more services. (CUNA Research & Statistics)

Credit union benefits to consumers

Credit unions create competition in the financial services industry. When financial institutions are forced to compete with one another, they must work hard to provide quality services at competitive rates.

In 2007, bank consumers nationwide saved approximately $6 billion due to the presence of credit unions in the financial marketplace. (CUNA Research & Statistics)

It is the top priority for credit unions to improve services for members, not to increase profits for stockholders. When credit unions provide exceptional service to members, they raise the bar for other financial institutions. Ultimately all consumers benefit.

Credit unions benefits to communities

Credit unions have a history of giving back to the communities they serve. Credit unions have repeatedly proved that their philosophy of “people helping people” is an everyday way of doing business.

All around the state credit unions are working to provide communities the services and resources they need. Through involvement in numerous community organizations, credit unions are actively demonstrating what it means to be a corporate citizen.

Nebraska & U.S. Credit Union Statistics

 
 

Nebraska

U.S.

Number of Credit Unions

73

7,905

State Chartered

20

3,099

Federally Chartered

53

4,807

Under $5 Million in Assets

19

2,152

Over $100 Million in Assets

7

1,370

Number of Members

409,192

90,520,000

Savings ($000)

2,248,500

735,444,000

Loans ($000)

1,931,600

576,342,000

Assets ($000)

2,702,300

869,009,000

 

All data as of 3/09

All data as of 3/09

Credit unions are also actively involved in reaching out to underserved areas and providing services to those who are not traditionally served by financial institutions. By teaching citizens how to properly build, maintain and use credit wisely, credit unions are giving them the tools they need to achieve financial success and further contribute to the Nebraska economy.