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Delaware First FCU's Information Desk
In this area, you can find information about our site and the items that we are offering you.
What is a credit union?
Perhaps at first glance a credit union might look like a bank, but credit unions are different. Credit unions were created for a different reason than banks; they have a different structure, are governed differently, raise capital differently, offer slightly different services to a different demographic and are taxed differently than banks. The differences are what make credit unions stand out as a unique financial option for millions of Americans.
Credit unions are not-for-profit cooperative financial institutions owned and operated by their members. The members -- who are united by a common bond of employment, association, or community -- democratically operate their credit unions under state and federal regulations. There are more than 9,000 credit unions in the United States, serving more than 81 million members.
What are the benefits of credit union membership?
Credit unions have only one purpose and that is to meet the financial needs of their member-owners. Because of the sole focus on serving their owners, credit unions provide excellent personal service and members often earn higher returns on their savings while paying lower rates for loans.
Credit unions are based on a one-member, one-vote structure, which gives members the power to direct credit union policy to meet their needs. This structure is very different from the for-profit sector where stockholders vote according to the number of shares of stock they own. The not-for-profit status is what enables credit unions to return more of their earnings to their members in the form of competitive loan and savings rates and lower priced services.
Who can join a credit union?
Credit union members share a common bond such as occupation (same employment or line of work), community (live or work in a well-defined area), association (same church, professional, civic or fraternal group, etc.) and family (membership is extended to any member's immediate family). Federal and state credit union laws restrict credit unions to serving only the groups specified in their charters. The group or groups served by a credit union are referred to as its field of membership (FOM). This differs from banks that generally can serve anybody in the state and can even recruit customers nationwide with credit card programs.
What types of services do credit unions offer?
Because each credit union is autonomous, the financial products and services offered vary. For example, while most credit unions offer savings accounts and consumer loans, many also offer a full spectrum of financial products and services such as dividend-bearing checking accounts, payroll deduction, direct deposit, automated teller machines (ATMs), credit cards, individual retirement accounts (IRAs), share certificates (similar to Certificates of Deposit, or CDs), money orders, traveler's checks, home mortgage loans and much more. And best of all, credit unions are safe and sound -- deposits are federally insured up to at least $100,000 by the National Credit Union Administration, a U.S. government agency.
How do credit unions differ from banks and other types of financial institutions?
The largest difference between credit unions and other financial institutions is that credit union members own their credit unions. The benefits of ownership are returned to the members in the form of lower loan rates, higher dividends, and lower-cost financial services. After meeting normal expenses and the reserve requirements needed to ensure financial stability, credit unions return all net earnings to their members in one form or another. Without a profit motive, credit unions can focus on members' needs -- and this has helped credit unions follow a different path from that taken by other financial institutions. Instead of trying to maximize profits from members, credit unions are partners to their members and they promote the financial well-being of everyone who uses their services.
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