Credit Union FAQs
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 policy, 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
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.
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. 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 services.
Why is it important for me to become a member?
Aside from the amenities we offer to our members such as low interest loans and low or no fee transactions, once a year, we hold an Annual Meeting. Being a member gives you the opportunity to have your voice heard in the affairs of the Credit Union. Only Members are eligible to vote at the meeting. Are savings deposits insured? Yes. All savings accounts are insured to at least $100,000 by the NCUSIF(temporarily increased up to $250,000 until December, 2009) , the National Credit Union Share Insurance Fund, which is a division of the NCUA, the National Credit Union Administration, an agency of the federal government. Who can join the credit union? To become a member of the credit union, you must live, work, worship, attend school, or volunteer in Kanawha, Putnam, or Mason county.
What is required to become a member?
Once you meet one of the eligibility requirement for membership, all that you need to do is deposit and keep a minimum of $5.00 in your Regular Share Account at all times.
Does being “joint” on an account make me a member?
No. Each person must have his or her own “Member” number to be considered a member of the Credit Union. Being Joint on someone else’s account only gives you access to all or part of that individual’s account. Any person who lives, works, worships, attends school, or volunteers in Kanawha, Putnam, or Mason County is eligible for membership at Peoples Federal Credit Union.