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The basic concept of a credit union is that people should be able to pool their money and make loans to each other.
History
Credit unions began in the 19th century because at that time, leaders showed a lack of interest in serving the financial needs of the average worker. Thus, the concept of credit unions quickly spread in Europe and soon reached North America. After the first credit union opened in Quebec, Canada, the United States joined the bandwagon shortly after, opening the first U.S. credit union in 1909 in New Hampshire.
Not for Profit, but for Service
Unlike a bank or savings & loans, a credit union is not formed to make a profit. Because banks and savings & loans are owned by a group of stockholders who want to earn their investments and more back, banks and savings & loans consider making a profit to be a primary goal. Credit union members, on the other hand, all own a share of the organization. Thus, members can make important decisions such as choosing who represents them on the Board of Directors.
Basic Guiding Principles
- Only people who are members of the credit union should borrow there.
- Loans should be made for productive purposes.
- A person's desire to repay is weighed more heavily than a person's ability to repay.
For more information about credit unions,  FAQ.
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