There are approximately 7160 member-owned cooperative financial institutions, known as credit unions, in the U.S. Their roots go back to 1849 when the first credit union was established in Western Europe.

  • Credit unions are usually formed around a common bond, generally employment.
  • Their main purpose is to provide members a place to save and borrow.
  • Members put their money into a variety of share and investment accounts. This money is then lent to members who pay interest.
  • After operating expenses and reserve requirements are met, the remaining loan income is returned to the members as dividends and other financial services.

Member-owned credit unions are not for profit; they exist only to serve their membership. As a result, credit unions are able to pay high dividends on shares and charge low interest rates on loans.