Who Owns the Credit Union?

Credit unions are unique financial institutions, but who actually owns them? It’s a question that we get asked a lot, so let’s explore the answer in today’s blog post.

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A credit union is a member-owned and controlled financial institution, created for the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members.

Membership in a credit union is open to all people who have a common bond, such as those who live or work in the same area, belong to the same employer, or worship at the same church. Once you join a credit union, you become a member-owner with a say in how your credit union is run.

What is a Credit Union?

A credit union is a type of financial institution that is owned and controlled by its members. Unlike a bank, which is owned by shareholders, a credit union is a non-profit organization that runs solely for the benefit of its account holders. Credit unions offer many of the same services as banks, including savings accounts, checking accounts, and loans.

The main difference between a credit union and a bank is that credit unions are typically much more focused on customer service than banks are. Credit unions also tend to offer lower fees and better interest rates than banks. Because they are not-for-profit organizations, credit unions often give back to their communities in the form of scholarships, low-interest loans, and other programs.

What are the Different Types of Credit Unions?

There are three different types of credit unions:
1. Federal Credit Unions- FCCUs are regulated by the National Credit Union Administration. There are about 5,600 of these in the United States. Anyone can become a member as long as they live, work, worship, or attend school in the area served by the credit union.
2. State-chartered Credit Unions- CUs are regulated by their state’s depository division. They can choose to be federally insured or not. If they decide not to be, then they typically have insurance through a private company. There are about 3,000 CUs in the United States that are state-chartered but not federally insured.
3. Natural Person Credit Union- NPCUs are credit unions that only serve individuals and not businesses or other organizations. There are only about 200 of these in the United States.

How are Credit Unions Governed?

Most credit unions are organized as not-for-profit entities. This means that any “profits” generated by the credit union are reinvested back into the organization to help it better serve its membership. While all credit unions have the same general structure, there are two different types of governing structures that credit unions can choose from: federal and state.

Credit unions that opt to be federally chartered are regulated by the National Credit Union Administration (NCUA), a federal government agency. Federally chartered credit unions must have a minimum of seven members and can serve people who work for the same employer, live in the same community, or belong to the same organization. State-chartered credit unions must also have a minimum of seven members, but they are not restricted to serving only certain groups of people. Instead, they can serve anyone who lives or works in their defined field of membership.

Who Owns the Credit Union?

Credit unions are member-owned, not-for-profit cooperatives. This means that credit unions are owned by the people who use and benefit from their services. That’s you, and every other credit union member!

When you join a credit union, you become a member-owner with a say in how the credit union is run. You have the opportunity to vote for the members of the Board of Directors, who serve staggered terms and set policy for the credit union.

The Board of Directors hires a CEO to manage day-to-day operations, in much the same way that a Board of Directors for a corporation hires a CEO.

In addition to the Board of Directors and CEO, credit unions are assisted by volunteer committees made up of member-owners. These committees focus on areas like marketing, lending, and auditing.

Being member-owned means that credit unions can reinvest their profits back into their membership in the form of higher dividends on deposits, lower rates on loans, and low or no fees.


The credit union is a nonprofit financial institution that is owned by its members. The members are the customers who use the credit union’s products and services. Credit unions are formed to help people save money and to provide loans to members at low interest rates.

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