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 (called members) belong to the credit union and the
credit union belongs to them. 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, or provide competitive rates for, 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 8,000 credit unions nationwide. Your deposits and Individual
Retirement Accounts are insured up to $250,000.
Why are credit unions so popular?
Credit unions have been providing cooperative financial services
to Vermonters for more than
60 years. Although they have grown tremendously in size and
sophistication, they maintain the very same characteristics today that
have always made them so popular with consumers:
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.
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.
Credit Unions serve an educational purpose, helping to make their
members wiser consumers and improving their financial well-being.