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Typical Questions about Credit Unions


A. Credit Unions Banks
  • Credit Unions are not-for-profit, member-owned, cooperative institutions that work for the benefit of its members. Credit Unions are required by law to reinvest all profits in the form of dividends, services, low fees, or lower interest rates. Credit Unions exist solely to serve their members.
  • Credit Unions are democratically run and have a member-elected board of directors. Each member is a shareholder with one vote.
  • Car loans, VISA®, and personal service loans account for more than half of all total loans. The revenue earned from loan interest is used to cover operating expenses, pay dividends, and provide low-cost services to members.
  • Banks are in business to make a profit for stockholders. They use fees to increase income and often attempt to maximize profits.
  • Board members are paid to work on behalf of stockholders.
  • Business and large real estate loans tend to dominate bank lending.

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Q. How can I sign myself or a family member up for membership?

A. You or a member of your family can either apply right on our website under Membership Application or we will be happy to mail a membership application if the request is sent to our Financial Services center.

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Q. Who may join a credit union?

A. Every credit union serves a specific field of membership as defined by its charter. Anyone who falls within the common bond of the credit union may join and share in its ownership. A common bond can be defined as the employees of a company, members of a civic or church group, residents of a community or numerous groups together. Generally, persons within a member's family, by blood or marriage, may also join.

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Q. What is a credit union?

A. A credit union is a not-for-profit financial cooperative that is owned and operated by its members. Member savings form a pool of money from which low-cost loans are made to other members. Once overhead and other expenses are paid and reserves set aside, income from loans is returned to members in the form of dividends on savings, expansion of services, a larger cushion against loss, etc. After a credit union has met its other goals, it may give any remaining surplus back to the members as bonus dividends on savings or loan interest rebates.

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Q. What is the purpose of a credit union?

A. The philosophy of the credit union movement is Not for Profit, Not for Charity, But for Service. Credit unions promote thrift and teach the wise use of credit. Credit unions encourage their members to develop a systematic savings program and they provide a source of low-cost credit. Because credit unions are not-for-profit and have low overhead costs, they are usually able to offer lower interest rates on loans and higher dividends on members' shares (savings). A credit union is also nonprofit in the sense that its purpose is to serve the members, not to make money. It needs money to provide services and benefits. But money is the means, not the end itself.

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Q. How are credit unions operated?

A. Credit unions are democratically controlled by their members. The members, themselves, elect a board of directors from among the membership, which is responsible for setting policy. Day-to-day operations are handled by paid professionals, or in the case of a small sized credit union, by volunteers.

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Q. Who governs credit unions?

A. A credit union receives its authority to operate by obtaining a federal or state charter. Federally chartered credit unions follow the regulations set by the Federal Credit Union Act, and state chartered credit unions follow those under the State Credit Union Act. Annual examinations and oversight is conducted by the supervisory agencies-the National Credit Union Administration (NCUA) for the federal credit.

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Q. Are savings insured?

A. Member savings accounts at all Pennsylvania credit unions are federally insured up to at least $250,000 and backed by the full faith and credit of the United States Government through the National Credit Union Administration.

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Q. How many credit unions are there?

A. In Pennsylvania, there are 700 federal credit unions and 84 state chartered credit unions. Combined, they hold more than $15 billion in assets and serve more than 3.2 million members. In the United States, there are more than 10,800 credit unions that hold $407 billion in assets and serve 74.6 million members. Credit unions also operate in 88 countries worldwide, providing affordable financial services to 100.8 million members.

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Q. How did the credit union idea originate?

A. 1849 is generally accepted as the year that the first credit union was organized. Friedrich Wilhelm Raiffeisen, mayor of a small German town whose inhabitants had suffered heavy financial losses due to a crop failure and a depression, conceived the idea. He believed that by pooling small sums of money, a fund could be established from which loans could be made at a low rate of interest. Now, as then, credit unions offer small loans that other financial institutions would consider too small for processing.

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Q. When were credit unions first organized in the United States?

A. The first U.S. credit union was formed in Manchester, New Hampshire in 1909. This was accomplished with the help of Alphonse Desjardins, a Canadian journalist, who had introduced the idea to Canada in 1901.

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Q. Can I reorder checks through this website?

A. Yes, If you need to reorder checks you can log on to Online Direct, select the maintenance button, then select check re-orders. This will link you to Liberty Checking Company. Simply follow the instructions.

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