What Is a Credit Union and How Can It Help Me?

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The Activist for Activists. Author of Make a Difference with Mental Health Activism and The Happy Activist: Journey the 5-Step Activism Path to Focus Your Passion and Change the World. Teacher, Psychologist, Environmental Activist, Animal Lover.

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What Is a Credit Union?

When I tell people I am on the board of credit union many admit they don’t know what services a credit union provides. When I explain, they sometimes comment, “Oh, it’s like a bank.”

This annoys me. Yes, the services are usually the same but there is one gigantic difference between them.

At Alcoa Tenn, you are a member/owner.

There are no shareholders, and board members are volunteers. Imagine how that changes the organization’s focus. Rates are lower because we don’t pay shareholders. Since you are an owner, we make all decisions on your behalf. In a bank, those decisions consider how much profit can be distributed to shareholders.

Here is a summary from Dupaco of the differences between these financial institutions:

How Can It Help Me?

Credit unions originated in Germany in the 1800s when a group of people pooled their money and loaned it to each other, so they would not have to rely on unreliable sources such as loan sharks. Over time they have achieved their mission to provide financial services to everyone, from the wealthy to the struggling.

Credit unions, particularly larger ones, provide services similar to banks.

Checking and savings accounts
ATMs, debit, and credit cards
Personal, auto, RV, boat and home loans
Governmental account insurance up to $250,000

But unlike banks,they offer:

Voting rights – if you don’t like what they are doing, vote for new board members.
Access to services to those of all incomes, including people who banks would not welcome – for those struggling with fluctuating income, a trusted advisor and products designed to increase financial capability can make the difference between thriving and spiraling into debt.
Access to financial counseling – many provide in-house financial counseling or access to services offered by a vendor.
Shared branching – banks with branches across the country allow you access to services when you are out of town. Credit unions provide the same services through the power of shared branching. You can do financial transactions at any member institution.

Credit unions provide support during tough times. When my mother died, I was the trustee for her estate and Jessica at Alcoa Tenn helped me. She listened while I told her a few stories about my mother, including the one where she kicked me out of her assisted living facility so she could play cards with the other ladies. Laughing, she shared a few stories about her mother. Then she gently helped me through the process.

[Read posts about consumer activism.]

Find a Credit Union

In the past, you had to be a part of a group to be a member of a credit union. For example, Alcoa Tenn was started in 1936 by a group of ALCOA employees. Membership was for people who worked at the plant and their families. Later, we amended the charter to allow membership to anyone who lives, works, or worships in three local counties.

An excellent place to start your search is to use the Credit Union Locator. Your place of employment may offer membership in a credit union. You may be able to join the credit union of a family member, even if you are far apart on the family tree.

Then research your local credit unions. Credit unions offer different products, so check to see which local credit union will serve your needs best. Since one of the advantages of a credit union is the personal touch, I recommend stopping by, getting a cup of coffee, and asking questions. Why not? You are a potential owner.

Credit Unions Can Change the World

I’m a big fan of credit unions because of the focus on you – your financial needs and capabilities. But credit unions also focus on the community.

Credit unions employees and volunteers strive to help their community. For example, when the fires that raged through Gatlinburg a few years ago burned a member’s home, the staff and board took up a donation for them.

My credit union supports many local charities and sends employees to local schools to teach financial capability. We opened several school branches, which are run by the kids!

And if you are worried about the environment, there are ‘green’ credit unions. Clean Energy credit union operates online and offers loans for solar electric systems, electric vehicles, home energy efficiency retrofits, electric-assist bicycles, and net-zero energy homes. The Minnesota Credit Union Network and the University of Minnesota launched CU-Green, an online resource for members considering solar energy for their home. They can find information, installers, and loans.

When you choose a credit union, you are a member of an industry that does not invest in projects that harm the environment, unlike banks.

“The banking industry makes its money by investing in development projects that are lucrative to shareholders, no matter how environmentally or socially damaging they might be. In fact, almost every major environmentally-destructive project on the planet was funded by Big Banks.”

We have wealthy members at our credit union who give us glowing feedback about our services. But I admit my favorites stories are those like Jane’s, where people bettered their future with the help of the credit union. When banks would not have given them aid. That is why I volunteer.

[Please share this post with a friend who could use a credit union for better financial health.]