Consumer Information:
What Is A Credit Union?

Not all financial institutions are alike . . .
. . . banks and savings & loans are financial institutions, chartered under
state or federal law, that accept deposits and make loans for businesses and individuals
in order to make a profit. Typically, they're owned and controlled by groups of
stockholders whose interests include maximizing the return on their investment in the
institution.
A Credit Union, on the other hand, is a not-for-profit cooperative
financial institution. It is owned and controlled by all of the people who use its
services. These people are members. Credit Unions exist to provide a
safe, convenient place for members to save money and to get loans at reasonable rates.
Like all cooperatives, they are based on the concept of "people helping
people." And unlike
banks any income that a credit union collects is distributed as
dividends to its members or used to provide competitive rates to its
members.
Credit Unions are closely regulated, just like other financial institutions. The
National Credit Union Share Insurance Fund, administered by an agency of the federal
government, insures the members' deposits at every Credit Union in Vermont and more than
10,000 Credit Unions nationwide. Your deposits are insured up to $100,000.
Why are Credit Unions so popular?
Credit Unions have been providing cooperative financial services for more than
150 years. Although they have grown tremendously in size and sophistication, they maintain
the very same characteristics today that have made them so popular with consumers through
the years:
The Credit Union mission is service, not profit . . . Credit Unions
return profits, after expenses and reserves, to their members in the form of dividends and
interest on deposits, low loan rates and improved services.
The members own and democratically control their Credit Union.
Credit Unions are dependent upon elected and appointed volunteers
on the Board and various Committees. Their time and efforts amplify the "people
helping people" philosophy of Credit Unions.
Members of Credit Unions share a common bond through employment,
location, family and other factors. It unites the members and creates a greater feeling of
responsibility since they are saving money together and making low cost loans to each
other.
Credit Unions serve an educational purpose, helping to make their
members wiser consumers and improving their financial well-being.