Credit Unions were born from a very simple idea: People helping people. They began in 1849 in Germany. By pooling their money, neighbors could make low-cost loans to each other. To assure that the lending pool would grow, each member was required to save something each month. Finally, every member is an equal owner, no matter how much or how little he or she has on deposit.
In the United States today, credit unions operate with the same philosophy. Credit unions are cooperative, not-for-profit financial institutions. They are 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.
Deposits in federally chartered and most state chartered Credit Unions are insured to $250,000 by the National Credit Union Credit Union Share Insurance Fund (NCUSIF), a U.S. government agency.