Over 7,250 credit unions provide financial services to more than 93 million consumers in the United States. Using modern technologies, they offer a wide range of services at prices that are usually lower than those of commercial organizations. While most credit unions serve the broad middle class, an increasing number of them are meeting the financial service needs of low-income citizens. As many banks refuse to work in this area, communities are developing credit unions aimed at serving the interests of low- and middle-income households.
During the recent financial crisis, credit unions showed that “banking” and human values can indeed go together, and the number of credit union members increased during the crisis. Because credit unions were not forced to pursue the most profitable and risky investments, they generally weathered the crisis well enough and did not require government assistance. At the same time, an important detail is that contributions to credit unions are insured through a special insurance fund.
While most cooperatives are open to anyone who wants to join, credit unions are required to restrict membership to only certain groups of people, such as residents of certain localities or employees of certain organizations.
Credit unions are generally a form of consumer cooperatives, but they can also be organized into purchasing cooperatives or collective service cooperatives — so-called “corporate” credit unions, as well as numerous credit union service organizations (CUSOs).
The United States is experiencing a veritable explosion of new cooperative development. Every year, millions of people across the country choose to have more control over their lives by joining cooperatives. The growth of the cooperative movement and a renewed surge of enthusiasm for cooperation can be observed throughout the United States.
The growth in the number of the credit union’s members is confirmed by public opinion research, which shows that 70 % of consumers of this union’s services believe that credit unions provide a better level of service for a fairer fee than banks, focused on profit making.
The main advantage of credit unions is transparency, accountability, and manageability for shareholders. As a result, it is very simple to borrow money in the Union: it is issued on demand with the availability of funds in the cash desk and without collateral. The money is transferred to the borrower, as a rule, on the day of circulation. For members of the Union, the credit union thus provides benefits that no other organization, not even a bank, can provide. In the latter, the solvency of members is estimated more stringent and, before granting a loan, they require confirmation of its payback. On-time and full loan repayments are common in US credit unions. Unpaid and overdue loans make up no more than 3% of the total amount. In addition to savings and lending, US credit unions also perform certain other functions for the benefit of their members.