Credit unions are not-for-profit cooperative (co-op) financial institutions owned by their members instead of stockholders. Because credit unions are not-for-profit, they return their earnings to members in the form of more competitive rates, lower and fewer fees, and improved services. (In 2018 alone, Wisconsin's 3.3 million members saved a quarter of a billion dollars statewide in reduced loan rates, interest rates, and banking fees.)
Credit Union Structure
Credit unions offer familiar services to other financial institutions, such as savings and checking accounts, debit and credit cards, vehicle and mortgage loans, student loans, IRAs, and more. Deposits in credit unions are fully insured up to $250,000 by the NCUA, similar to FDIC coverage at banks.
The difference with credit unions lies in their structure: they are not governed by stockholders expecting to earn hefty profits, but by volunteer boards democratically elected by their membership. Account holders at a credit union are referred to as "members" or "member-owners" because credit unions serve defined fields of membership based on common bonds such as an employer, family, geographic location, or membership in a group (examples - place of worship, school, labor union, homeowners' association).
Credit unions are also cooperative, meaning that they work together--rather than against one another--towards the mutual goal of their members' financial well-being. They are guided by the 7 Cooperative Principles, adopted in 1995 by the International Cooperative Alliance.
Most importantly, credit unions' not-for-profit status uniquely equips them to serve underserved populations that other financial institutions can't or won't.
The Credit Union Difference is not only about the unique structure of credit unions and how they are governed, it is also underscored by what credit unions offer their members and the value they bring to their communities. "People Before Profit" is our rallying cry.
As not-for-profits, money that is made by credit unions is invested in member benefits in the form of higher interest rates on savings, lower interest rates on loans, fewer fees, complimentary financial counseling, and more.
That means retirees have larger nest eggs, families can afford to buy the home of their dreams, and individuals with less than great credit can consolidate debt and get back on track. Small businesses and self-employed individuals also thrive with credit unions, and lower and middle income members are treated with the same consideration and respect as wealthier members. In other words, credit unions are uniquely equipped to provide a lifeline when other financial institutions can't or won't.
And, through initiatives like The League's REAL Solutions® program, credit unions continue to develop programs, products, partnerships, and services that go above and beyond to improve the financial and economic well-being of all Wisconsin families and invigorate the communities they serve.
Here are stories of the credit union difference in action and videos of the positive impact credit unions have in Wisconsin.