Credit Union

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A credit union is a financial institution that acts a little like a bank, but there are two important differences: First, a credit union is owned and controlled by the people who use it. Second, a credit union is there to take care of the financial needs of its members, and so it does not exist to make a profit. It's a very old form of saving and money-lending that dates back to nineteenth-century England. To qualify for membership in a credit union, the members must typically share a "common bond" such as working for the same company, belonging to the same church or living in the same geographic region. Members can deposit money into their credit union account, which earns them interest, and they can apply to the credit union for loans. Credit union loans tend to be for smaller amounts. While most loans are to individuals for personal use, some loans are for business purposes. Some larger credit unions can issue their own credit cards. Also, depending on the size and resources of the credit union, it can provide a form of checking account, sell travelers checks, and offer various other services beyond the original purpose of saving and lending. Credit unions can be chartered by either the federal government or the state government. Federally chartered credit unions are under the authority of the National Credit Union Administration and provide insurance for their members through the National Credit Union Share Insurance Fund (NCUSIF). This is similar to the FDIC insuring deposits at commercial banks. Credit unions that are chartered by individual states are not obliged to obtain insurance from the NCUSIF (unlike federally chartered credit unions), and may choose to obtain insurance privately. There are over 9,500 federally insured credit unions in America (including around 4,000 state chartered credit unions), with over 80,000,000 individual members: a significant part of personal finance in America.