Financial cooperative and credit Association

Credit Union, financial cooperative and credit association that provides loans to its members at lower rates of interest than would otherwise be available. The capital funds of credit unions come from the purchase of shares by members, who receive yearly dividends on the basis of their investment.


Credit unions are operated for the mutual benefit of their members and are usually formed by persons who share a common bond, such as membership in a church, lodge, trade union, or professional association. Many corporations have assisted their employees in establishing credit unions, as has the civil service at the federal, state, and local levels.


The loans are usually for the acquisition of consumer goods rather than for the purchase of real estate.The first credit union was established in 1864 by a group of farmers in the German Rhineland. The movement was soon introduced to North America.


The first Canadian credit union was founded in Québec in 1900; the first in the United States was organized in New Hampshire in 1909. In the U.S. credit unions must be chartered by the federal or state government; federally chartered credit unions are under the supervision of the National Credit Union Administration.


Almost all credit union savings are insured by the federal government or by cooperative insurers. In 2000 the over 10,000 federally insured credit unions in the United States reported more than 77 million members and total assets of about $438 billion.