March 12, 2021
Established in 1850s Germany, credit unions made their way to North America in the early 1900s — but if you’re just now getting in the know, you’re not alone. Turns out that credit unions could use a little more street cred. We’re going to give you a rundown on the basics and dish out some facts about credit unions you might not know.
Credit Union 101
Before we dive into the facts, let’s start with the basics. You may already know some of this information, so we’ll review it quickly.
One of the differences between credit unions and banks is that credit unions are not-for-profit, so they don’t have to answer to shareholders like banks do. This means a credit union’s sole focus is to help its members, not increase shareholder profits.
One of the biggest misconceptions about credit unions is that many people don’t qualify to join. A fun fact about credit unions, however, is that most people are eligible.
While some credit unions can only offer membership to people who live in certain communities or work for certain employers, others can accommodate anyone across the country.
You simply need to join based on the credit union’s field of membership, also known as the common bond between members. The common bond could be your:
- Occupational (Employer)
- Community (Geographic region)
- Associational (this could be a school, place of worship, or other associations)
Even if a person does not qualify under one of these common bonds, they may still be eligible to join because of a close relationship with someone who does qualify.
5 Facts About Credit Unions You Didn’t Know
Ready to dig in a little deeper? Here are five facts about credit unions that, unlike the bond, aren’t so common.
Credit Union Fact #1: Becoming a Member Means Becoming an Owner
While banks are owned by shareholders, credit unions are owned by their members. If you’re a member of a credit union, you are a part-owner of it.
When you become a member of a credit union, you get a share account. That account represents your share of ownership.
One of the perks that comes with ownership is the ability to elect the Board of Directors. Board members are actually voted upon by the members of the credit union in a democratic election process.
Credit Union Fact #2: Credit Unions Reinvest in Their Communities
By broadening the scope of focus from the individual to the community, credit unions take financial well-being to another level.
One example of this is that deposits made at a local credit union stay in the local community. From there, your money could:
- Help finance a student’s education through scholarships and grants
- Help a family get a home loan
- Go toward local fundraisers
- Support small-business expenses
Credit unions follow a philosophy of “people helping people,” and there’s no better way to show that than a credit union investing in its community.
Since 2001, the PenFed Foundation has provided more than $38.5 million in financial support to more than 140,000 military families.
Credit Union Fact #3: Credit Unions Actively Serve the Underserved
By providing affordable financial services and exploring workable solutions, credit unions are dedicated to serving underserved populations.
According to the Federal Credit Union Act, credit unions have the “specified mission of meeting the credit and savings needs of consumers, especially persons of modest means.”
Credit unions believe everyone deserves the opportunity at financial success, so they actively work to make that possible.
Credit Union Fact #4: Credit Unions Are Everywhere
What if you’re traveling and need cash from an ATM or move to a different city or country and need to take out a loan? Think you won’t be able to find a credit union? Think again!
- According to the World Council of Credit Unions, 86,054 credit unions throughout 118 countries serve over 291 million members worldwide.
- There are over 5,000 credit unions in the U.S.
Some credit unions even participate in something called shared branching. If your credit union participates in shared branching, it means you make certain transactions at any other credit union that also participates in shared branching.
Let’s say you live in California, and you bank at a shared branch credit union. If you go on vacation to Florida and need to withdraw money or make a loan payment, you can walk into any shared branch credit union in Florida and make your transactions as if you were at your own credit union.
Credit Union Fact #5: Credit Unions Help People Pursue Their Financial Goals
Credit unions work together with members in a real partnership to help them plan out and stay on track toward their financial goals. You might call it elevated personal service, but it’s just the credit union way.
What’s more, credit unions keep financial inclusion top of mind by providing services to — and considering the right approaches for — members of all income levels.
Bonus Credit Union Fact: There’s an International Credit Union Day
Did you know the third Thursday of every October is International Credit Union Day? It’s been celebrated since 1948! So, remember to wish your favorite credit union a happy International Credit Union Day this year.
Fact Check: Credit Unions Score Big
There you have it — five (or more) not-so-known facts about credit unions served up to show how credit unions can help empower people to reach their full financial potential. If you’re not a member of a credit union, today is a good day to join.
Learn More About PenFed Membership
See the discounts and benefits we offer our members.