What’s a credit union?
A credit union is a cooperative, not-for-profit financial institution
organized to promote thrift and provide credit to members. It is
member-owned and controlled through a board of directors elected
by the membership. The board serves on a volunteer basis and may
hire a management team to run the credit union. The board also establishes
and revises policies that sets dividend and loan rates, and directs
certain operations. The result: members are provided with a safe,
convenient place to save and borrow at reasonable rates at an institution
which exists to benefit them, not to make a profit.
Who owns a credit union?
Most financial institutions are owned by stockholders, who own a
part of the institution and intend on making money from their investment.
A credit union doesn't operate in that manner. Rather, each credit
union member owns one "share" of the organization. The
user of credit union services is also an owner, and is even entitled
to vote on important issues, such as the election of member representatives
to serve on the board of directors.
How did credit unions start?
The first credit union cooperatives started in Germany over a century
ago. Today, credit unions are found everywhere in the world. The
credit union movement started in this country in Manchester, New
Hampshire. There, the St. Mary's Cooperative Credit Association,
a church-affiliated credit union, opened its doors in 1909. Today,
one in every three Americans is a credit union member.
What is the purpose of a credit union?
The primary purpose in furthering their goal of service is to encourage
members to save money. Another purpose is to offer loans to members.
In fact, credit unions have traditionally made loans to people of
ordinary means. Credit unions can charge lower rates for loans (as
well as pay higher dividends on savings) because they are nonprofit
cooperatives. Rather than paying profits to stockholders, credit
unions return earnings to members in the form of dividends or improved
Are savings deposits insured?
Yes. All savings accounts are insured up to $100,000 by the NCUA,
the National Credit Union Administration, an agency of the federal
government. The NCUA is an equivalent government agency as the FDIC
Who can join a credit union?
A credit union exists to serve a specific group of people, such
as a group of employees or the members of a professional or religious
group. This is called a "field of membership." The PA HealthCare Credit Union has a field of membership of employees and family members
of the Heritage Valley Health System and it’s affiliates.