What is a Credit Union?

What’s a Credit Union?

A credit union by definition is a not-for-profit banking organization designed to provide financial services and loans to its members. Credit Unions are member-owned, with even the board of directors being voted on by credit union members. The board, elected by and to represent all credit union members, 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. Credit Unions are owned by its members and it’s not for profit.  This means our main focus is to offer you competitive rates and services, not our bottom line.

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 KEMBA’s case, it was a group of Kroger employees.  That gave us our name, 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 community. Because membership was exclusive to a specific group, only people within that group were able to obtain loans from us, as it still 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.

what is a credit union

 

Are my deposits at KEMBA insured?

Yes. Each account is insured up to $250,000 by American Share Insurance, the nation’s largest private deposit insurer.

 

ASI American Share Insuarance
American Share Insurance Logo

Whose bright idea was the credit union?

The earliest credit unions trace their roots back to more than 100 years ago. In this country, the first one was the St. Mary’s Cooperative Credit Association, which was in essence a church-run credit union.

If you’re a KEMBA member, you’re in good company. It’s estimated that one in three Americans is a member of a credit union.