How Credit Unions Differ From Banks
Credit unions are not-for-profit organizations that exist to serve their members rather than to maximize corporate profits. Like banks, credit unions accept deposits, make loans, and provide a wide array of other financial services. But as member-owned institutions, credit unions focus on providing a safe place to save and borrow at reasonable rates. Unlike banks, credit unions return surplus income to their members in the form of dividends.
Favorable Rates and Customer Service
Fees and loan rates at credit unions are generally lower, while deposit dividend and interest rates are generally higher than banks and other for-profit institutions. Credit unions are democratically operated by its members (those joining the credit union), allowing account holders an equal say in how the credit union is operated, regardless of how much they have on deposit at the credit union.
The credit union’s Board of Directors, who are elected by the members, decide who the credit union will serve. In order to join a credit union, potential members must be part of a field of membership, which is typically based on one’s employment, community, or membership in an association or organization. As credit unions serve members of modest means, many will actively expand their field of membership to serve other select groups and/or geographic areas when identified as needing access to affordable financial services. Credit unions designated low-income predominately focus on providing financial services at reasonable rates in areas that are often underserved or unserved by banks.
NCUA Share Insurance Coverage
Federally insured credit unions are insured by the National Share Insurance Fund (NCUSIF). The NCUSIF is operated by the National Credit Union Administration (NCUA), a federal government agency, backed by the full faith and credit of the United States government. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 increased the maximum share insurance coverage at all federally insured credit unions to $250,000. Account balances in excess of $250,000 at a federally insured credit union can be fully insured if properly structured.
Article reprinted from www.mycreditunion.gov
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The mission of the South Side Community Economic Development Center is to build community capacity through a holistic and cooperative approach to financial education and economic development.
The South Side Community Economic Development Center (“The Center” or “SSCEDC”) was organized in 2006 as a 501(c)3 nonprofit organization exclusively for charitable, educational and scientific purposes. It was established to advance community economic development on Chicago’s south side. The Center’s specific purposes are:
• To research the financial, economic and educational needs of low income individuals, families and organizations;
• To design, develop and/or facilitate services, programs and/or products that alleviate poverty;
• To provide financial education, counseling and training to low income individuals and families with a particular focus on activities that:
1. Increase basic financial literacy among residents
2. Aid in the formation and maintenance of local micro-enterprises, small businesses and community organizations;
3. Offer home ownership education programming and counseling to low-and moderate income individuals seeking to purchase and/or maintain a home;
4. Help to develop other assets, investments and ownership opportunities for LMI individuals.
5. Engage and strengthen other community economic development organizations through partnerships, networking, training, technical assistance, access to capital, urban planning and public policy.
South Side Community Economic Development Center
“Building Community Capacity through Partnerships”
5401 S Wentworth Street, Suite 25, Chicago, IL 60609
Phone: (773) 548-8859 Fax: (773) 548-5533