What’s a Credit Union

What is a Credit Union?

The International Credit Union Operating Principles are founded in the philosophy of cooperation and its central values of equality, equity and mutual self-help. Recognizing the varied practices in the implementation of credit union philosophy around the world, at the heart of these principles is the concept of human development and the brotherhood of man expressed through people working together to achieve a better life for themselves and their community.1

A credit union is a cooperative financial institution, owned and controlled by the people who use its services. These people are called “members.” Credit unions serve people who share something in common, such as where they work, live, occupational background, or go to church. Credit unions are not-for-profit and exist to provide a safe, convenient place for members to save money at higher rates of return, and to receive loans at reasonable rates. Most importantly, credit unions provide greater and friendlier service to the membership, as well as dividends.2

7 Cooperative Principles for Credit Unions2

  1. Voluntary Membership
    Credit unions are voluntary, cooperative organizations, offering services to people willing to accept the responsibilities and benefits of membership, without gender, social, racial, political or religious discrimination. Many cooperatives, such as credit unions, operate as not-for-profit institutions with volunteer boards of directors. In the case of credit unions, members are drawn from defined fields of membership.
  2. Democratic Member Control
    Cooperatives are democratic organizations owned and controlled by their members – one member, one vote – with equal opportunity for participation in setting policies and making decisions.
  3. Members’ Economic Participation
    Members are the owners. As such, they contribute to and democratically control the capital of the cooperative.
  4. Autonomy and Independence
    Cooperatives are autonomous, self-help organizations controlled by their members. If the cooperative enters into agreements with other organizations or raises capital from external sources, it does so based on terms that ensure democratic control by its members and maintains the cooperative autonomy.
  5. Education, Training, and Information
    Cooperatives provide education and training for members, elected representatives, managers and employees so they can contribute effectively to the development of the cooperative. Credit unions place particular importance on educational opportunities for their volunteer directors and financial education for their members and the public, especially the nation’s youth. Credit unions also recognize the importance of ensuring the general public and policy markers are informed about the nature, structure and benefits of cooperatives.
  6. Cooperation Among Cooperatives
    Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, state, national and international structures.
  7. Concern for Community
    While focusing on member needs, cooperatives work for the sustainable development of communities, including people of modest means, through policies developed and accepted by the members.

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