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Some of the most common questions about credit unions revolve around membership - namely what it means and what privileges it offers. Credit unions are fundamentally different than other financial institutions because if you join one, you become a part-owner and can participate in governance. Let's explore what member-owned means in practice.
Understanding credit union membership
Established by the Federal Credit Union Act of 1934, credit unions are cooperative financial institutions chartered by the federal or a state government and owned by the members. Like banks, members can save and borrow money at credit unions. Unlike banks, credit unions are not-for-profit organizations. Any financial benefits they make flow right to their members. If a credit union does well, it passes on the "profits" to its members. It does this in the form of low to no fees, higher deposit interest rates, lower loan interest rates and many other benefits. Credit union accounts are federally insured, just like bank accounts.
In other words, credit unions are member-owned, giving members immediate and direct control. You aren't just a depositor like you are with a big bank. Instead, the credit union you join is a locally-owned and community-focused organization. It caters to the local businesses and residents to help them succeed financially. You and your credit union live in and support the same community. As a credit union member-owner, you vote for the board of directors and have a voice in many policies.
How credit unions operate
When you open a credit union account, you are assuming partial ownership of the credit union itself. As a member, you get access to financial services like loans, checking and savings accounts, credit cards, and more. These services from a credit union often offer better rates and lower fees than you would receive at for-profit banks.
Credit union membership eligibility is based on common characteristics such as living in a certain area, sharing an occupation, studying at the same institution and so on. Most are open and eager to invite new members, allowing anyone residing within the community to join. For example, Power Financial Credit Union has been serving tens of thousands of South Florida members for seven decades and counting.
Because of this local nature, credit unions tend to have fewer locations than banks. However, utilizing the Shared Branch network allows members of one credit union to perform a range of transactions at another institution. This gives members access to thousands of locations from coast to coast. Additionally, modern online banking and mobile banking apps give you the ability to securely use your credit union services wherever you are 24/7.
Member-owned means community-focused
Credit unions tend to focus on their local community. They don't have to worry about outside shareholders. Instead, they invest in members and their financial well-being. This doesn't just mean better interest rates, but also personalized services, support and financial education. Credit unions often join local charity initiatives, offer advice to startups and small businesses, and team up with other organizations to improve their communities.
This mindset is reflected in governance as well - credit union boards of directors are chosen by members and are accountable to them. It's common for CEOs (such as Allan Prindle) to develop connections between their credit union and the community they serve. As a result, members get personal financial relationships that they need, but wouldn't get in commercial institutions.
Become a member of South Florida's best credit union
If you live or work in South Florida, you can join Power Financial Credit Union today. Join a community of almost 35,000 members and enjoy the benefits of a personal member-first approach with a full platform of traditional branch and state-of-the-art digital banking services. Get all the resources you need on your journey to financial success and stability.
Some of the most common questions about credit unions revolve around membership - namely what it means and what privileges it offers. Credit unions are fundamentally different than other financial institutions because if you join one, you become a part-owner and can participate in governance. Let's explore what member-owned means in practice.
Understanding credit union membership
Established by the Federal Credit Union Act of 1934, credit unions are cooperative financial institutions chartered by the federal or a state government and owned by the members. Like banks, members can save and borrow money at credit unions. Unlike banks, credit unions are not-for-profit organizations. Any financial benefits they make flow right to their members. If a credit union does well, it passes on the "profits" to its members. It does this in the form of low to no fees, higher deposit interest rates, lower loan interest rates and many other benefits. Credit union accounts are federally insured, just like bank accounts.
In other words, credit unions are member-owned, giving members immediate and direct control. You aren't just a depositor like you are with a big bank. Instead, the credit union you join is a locally-owned and community-focused organization. It caters to the local businesses and residents to help them succeed financially. You and your credit union live in and support the same community. As a credit union member-owner, you vote for the board of directors and have a voice in many policies.
How credit unions operate
When you open a credit union account, you are assuming partial ownership of the credit union itself. As a member, you get access to financial services like loans, checking and savings accounts, credit cards, and more. These services from a credit union often offer better rates and lower fees than you would receive at for-profit banks.
Credit union membership eligibility is based on common characteristics such as living in a certain area, sharing an occupation, studying at the same institution and so on. Most are open and eager to invite new members, allowing anyone residing within the community to join. For example, Power Financial Credit Union has been serving tens of thousands of South Florida members for seven decades and counting.
Because of this local nature, credit unions tend to have fewer locations than banks. However, utilizing the Shared Branch network allows members of one credit union to perform a range of transactions at another institution. This gives members access to thousands of locations from coast to coast. Additionally, modern online banking and mobile banking apps give you the ability to securely use your credit union services wherever you are 24/7.
Member-owned means community-focused
Credit unions tend to focus on their local community. They don't have to worry about outside shareholders. Instead, they invest in members and their financial well-being. This doesn't just mean better interest rates, but also personalized services, support and financial education. Credit unions often join local charity initiatives, offer advice to startups and small businesses, and team up with other organizations to improve their communities.
This mindset is reflected in governance as well - credit union boards of directors are chosen by members and are accountable to them. It's common for CEOs (such as Allan Prindle) to develop connections between their credit union and the community they serve. As a result, members get personal financial relationships that they need, but wouldn't get in commercial institutions.
Become a member of South Florida's best credit union
If you live or work in South Florida, you can join Power Financial Credit Union today. Join a community of almost 35,000 members and enjoy the benefits of a personal member-first approach with a full platform of traditional branch and state-of-the-art digital banking services. Get all the resources you need on your journey to financial success and stability.