What is a Credit Union
For Members, By Members
Credit unions are member-owned, not-for-profit financial institutions with member-elected, volunteer board members. Credit unions operate for the benefit of their members, not a select group of stockholders. Since 1940, LGWFCU has exemplified the credit union motto, “Not for profit, not for charity, but for service.”
More than 100 million Americans are members of credit unions. Collectively, credit unions hold more than $1.026 trillion in assets.
Credit Unions versus Banks
| CREDIT UNIONS | BANKS |
| Not for Profit Corporations | For Profit Corporations |
| Owned by Members | Owned by Outside Stockholders |
| Lower and Less Fees | Higher and More Fees |
| Pay Higher Savings Rates | Pay Lower Savings Rates |
| Volunteer Board Members | Paid Board of Directors |
HISTORY OF CREDIT UNIONS
In the mid-1800’s, crop failure and famine in Germany sparked the co-op movement, allowing members to purchase bread and other necessities from other members at substantial savings by pooling their resources together.
Following that concept, the first co-op credit society was organized to give people a different source of credit rather than loan sharks or banks. The first credit union in the United States opened in 1908 to provide credit to working class families.
During the 1920s, credit unions became increasingly popular. Families had more money to save and could afford products like automobiles and washing machines. They, however, needed a source of inexpensive credit to purchase these goods. The popularity of credit unions grew because commercial banks and savings institutions generally showed limited interest in offering such consumer loans.
