What is a Credit Union?
A Credit Union is a not-for-profit banking organization designed to provide financial services and loans to its members. Credit Unions are member-owned, and governed by a board of directors. The board is elected by and represents all members. They help to sets policies and rates for share accounts and loans. That’s one of the reasons credit unions are considered to be one of the safest institutions to do business with.
If you’re not in the business of profit, what’s the goal?
Credit Unions were established nearly a century ago by various communities and groups of employees of a company. In KEMBAs case, it was a group of Kroger employees. KEMBA stands for Kroger Employees Mutual Benefits Association. Basically, we provide a way to pool resources in a local banking institution as opposed to larger national organizations that don’t necessarily benefit the local community. Credit Union membership is exclusive to a specific group, or community. Only people within those groups were able to obtain services, just as it is today. That’s also why there is a latent incentive to have policies that are in the interest of the members and investors, like keeping rates low and dividends high.