What is a Credit Union?
A Credit Union is a financial co-operative that is owned and controlled by its members. Credit Unions offer a variety of financial services; providing a safe and convenient place to save your money, accessible loans at a very reasonable rate of interest and a variety of other financial services. As such, Credit Unions have the potential to offer a much more accessible, efficient and cost-effective financial service than either banks or other financial institutions.
Worldwide there are over 100 million Credit Union members in 84 countries, and they are extremely popular in Ireland, America, Australia and the Caribbean. In the UK, the Credit Union movement is growing rapidly with over 325,000 members and over 700 Credit Unions with assets of £215 million.
How is a credit union different from a bank?
Banks are owned by private shareholders and all profits are returned to them. Credit Unions are owned and controlled by every member. The members employ a small professional staff team to run the Credit Union on their behalf. After the costs of running the Credit Union are met, the profits are returned to the members through annual returns known as dividends. This keeps money within the local area and the pockets of each member.
Credit Unions are not-for-profit organisations and are driven by an ethos of service to its members, rather than maximising profit. They are also an ethical way to bank, as they provide social benefits, renew a sense of community identity and retain wealth within the local area.
How safe are Credit Unions?
Credit Unions are regulated like other financial institutions by the Financial Services Authority. They have to comply with the Credit Unions Act 1979 and are regularly audited and monitored. In addition, each Credit Union must be covered by Fidelity Bond Insurance to ensure that Member’s savings are protected.
A Credit Union is a real sign of hope in a community
In the face of powerful multinationals and increased globalisation people feel isolated and less in control of their lives. Credit Unions are a positive response to claiming back control and rebuilding local communities.
Credit Unions give you control of your finances
Credit Unions are committed to giving their members control of their finances by helping them to save for the future and borrow responsibly. Below you can download a number of free leaflets that describe the ways credit unions can help you take charge of your money.
- Credit choices (PDF, 234kb)
- Dealing with debt (PDF, 278kb)
- Borrowing from your Credit Union (PDF, 318kb)
- Budgetting with your Credit Union (PDF, 343kb)
- Safe savings (PDF, 343kb)
- What to do if you have a complaint (PDF, 259kb)