A credit union is a cooperative financial institution that is owned and controlled by its members, and operated for the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members. Many credit unions exist to further community development or sustainable international development on a local level. Worldwide, credit union systems vary significantly in terms of total system assets and average institution asset size since credit unions exist in a wide range of sizes, ranging from volunteer operations with a handful of members to institutions with several billion dollars in assets and hundreds of thousands of members.
Credit unions differ from banks and other financial institutions in that the members who have accounts in the credit union are the owners of the credit union and they elect their board of directors in a democratic one-person-one-vote system regardless of the amount of money invested in the credit union. A credit union's policies governing interest rates and other matters are set by a volunteer Board of Directors elected by and from the membership itself.
In the credit union context, "not-for-profit" should not be confused with "non-profit" charities or similar organizations. Credit unions members are "not-for-profit" because they operate to serve their members rather than to maximize profits. But unlike non-profit organizations, credit unions do not rely on donations, and are financial institutions that must turn what is, in economic terms, a small profit to be able to continue to serve their members.
When you become a Credit Union Member , you enter into a very special relationship. It is a cooperative relationship. In order for members to get higher dividend rates and lower loan rates, members have to use the products and services that are available to them now. This creates growth, which allows newer products and services to be developed and added in the future. When you get down to basics, the Credit Union is whatever the members choose to make of it.