What is a federal credit union?

How can I become a credit union member?
How is a credit union founded?
Glossary of terms

A federal credit union is a cooperative, not-for-profit financial institution organized to promote thrift and provide credit to its members. Federal credit union members are provided with a safe, convenient place to save and borrow at reasonable rates, with savings insured to at least $250,000 (under a temporary increase in effect through Dec. 31, 2009) by the National Credit Union Share Insurance Fund (NCUSIF).

A federal credit union is member-owned and controlled through the election of a board of directors drawn from membership. Board members serve on a volunteer basis; one board member may be compensated.

Federal credit unions have been serving the nation's consumers for 75 years. As of Dec. 31, 2008, there were 4,847 federal credit unions with $448.3 billion in assets and serving more than 49 million people.

Membership in federal credit unions is not open to the general public. Instead, it is limited to persons sharing a common bond of occupation, community or association. Examples are employees of corporations, members of associations (such as Knights of Columbus) and residents of a defined area (such as a town or a neighborhood).

To join a credit union, a potential member must be first eligible under the common bond provisions, and submit a membership application. Upon submittal of the application, and the purchase of at least one share (typically $5), a person becomes a member with full voting rights.

Many credits unions have a "once a member, always a member" policy, and most also permit members of the immediate family or household of a member to join.