- A non-profit, cooperative financial institution owned and controlled by the people who use its services, usually a group such as employees in the same company or industry. Credit unions historically have been able to offer lower rates and fees and still operate in the black. Credit unions rely on a financial reserve to absorb unexpected losses from loan defaults or other financial setbacks, and the majority of credit unions carry federal deposit insurance that protects individual accounts up to a specified amount in the event the credit union fails.
Credit unions are member-owned, full service co-operative financial institutions.
cooperative bank, interdependent, co-op
Related Terms and Acronyms
- Bank — Definition,
- An institution that acts as a financial intermediary by receiving money from depositors and lenders and also lending to borrowers.
- Mutual Insurance Company — Definition,
- An insurance company where the each policyholder is a part owner of the company.
- Niche Banks — Definition,
- Smaller banks that cater to particular communities or certain industries. These banks have been thriving in the fallout from mega-bank mergers.
- Reciprocal Insurance Exchange — Definition,
- A group of individuals, firms and corporations that mutually insure each other.
- Regional Bank — Definition,
- A bank with a primary market in a regional or metropolitan area but takes deposits from throughout the province in which it is located. Usually called a Credit Union in Canada.
- Share Certificate — Definition,
- A certificate of deposit issued by a credit union that pays a specific dividend if held for a specific period. It's the credit union equivalent of a certificate of deposit. A penalty is usually assessed if all or any of the principal is withdrawn before maturity.
- Stock Insurance Company — Definition,
- An insurance company with multiple stockholders each owning shares in the corporation.