Credit unions are member-owned, not-for-profit financial cooperatives that provide savings, credit and other financial services to their members. They are democratically-controlled by their members and operated for the purpose of promoting thrift, providing credit at competitive rates, as well as other financial services to their members.
Credit union membership is based on a common bond or linkage shared by savers and borrowers who belong to a specific community, organization, religion or place of employment. Earnings are returned to the membership by offering lower loan rates, higher dividends on deposits and lower fees. They assist members to become better educated in the financial arena.
Credit unions pool their members’ savings deposits and shares to finance their own loan portfolio rather than rely on outside capital.
In 1934 Congress passed the Federal Credit Union Act which allowed credit unions to incorporate under either state or federal law. That dual chartering remains today.
Membership in a credit union means you are an owner and are responsible for electing its board of directors. Every member has an equal voice and vote, regardless of account size.
Cooperatives often could be considered community development financial institutions like smaller community banks. Many credit unions are helping with sustainable international development on a local level. Credit unions vary in size from small volunteer operations with just a handful of members to institutions with several billion dollars in assets and hundreds of thousands of members.
This local community and member-owned foundation has consistently helped credit unions score higher on customer satisfaction surveys.
Based on data from the World Council of Credit Unions, at the end of 2010 there were 52,945 credit unions in 100 countries around the world. Collectively they served 188 million members and oversaw US $1.5 trillion in assets. About 44 percent of Americans belong to a credit union.
The Illinois Electric Cooperatives’ Federal Credit Union is a financial cooperative for Illinois Electric and Telephone Cooperative employees, directors and family members. It was organized in March of 1970 by Thomas H. Moore, President/CEO of the Association of Illinois Electric Cooperatives. Moore wanted to provide an added fringe benefit the cooperatives could offer their employees. “Once a member, always a member” still stands today. Once you become a member, even after retirement or leaving the cooperative system, as long as you never close your account you will be considered a member.
It is governed by a nine member volunteer board of directors comprised of members throughout the cooperative system. Current directors are from all over the cooperative system. They are elected for three-year terms and all members are eligible to run. The credit union holds its annual meeting every year in March and all members are encouraged to attend.
The IEC Federal Credit Union is insured and governed under the rules and regulations of the National Credit Union Administration. And, as in other credit unions, its field of membership is restricted to those individuals and family members who belong to that specific organization.
Originally the credit union offered share savings and loans. It has now grown to offer share certificates, share draft, club and money market accounts as well as a variety of loans. The IEC Federal Credit Union’s membership currently includes employees, directors and family members of 27 electric and telephone cooperatives.
Credit unions are there to help members succeed by working together. Just as their philosophy says, “people helping people.”
To find a credit union near you go to www.creditunion.coop and type in your affiliation or zip code.