What is a credit union?
A credit union is a member-owned, not-for-profit financial cooperative formed solely to meet the needs of its membership. Credit union members can be people who share something in common such as where they live, work or worship. Credit unions pool their members’ deposits in order to provide loans to other members at affordable rates. Members also benefit from higher returns on savings and fewer fees, on average, as compared to for-profit banks.
What are the benefits of credit union membership?
Members benefit from credit unions' not-for-profit structure because surplus earnings are returned to them in the form of higher dividend rates, lower loan rates and new product offerings. In the credit union system, members have ultimate control over their money and the policies of the credit union.
How do I become a credit union member?
To become a credit union member, you must have a "common bond" with a certain employment group, association membership or a well-defined geographical region. IowaCreditUnions.com allows you to locate credit unions near you to help you determine your eligibility for membership. If you have additional questions about credit union membership, please contact the Iowa Credit Union League at 800-860-6180.
How are credit unions governed?
Each credit union member has one vote, no matter how much money the individual has in the credit union. Members elect a volunteer board of directors, who set the policies and rates of the credit union. Credit unions hold annual membership meetings to elect new board members.
How are credit unions chartered?
Credit unions have either a federal or state charter. Federal charters are granted by the National Credit Union Administration (NCUA) in Washington, D.C. In Iowa, state charters are granted by the Credit Union Division of the Iowa Department of Commerce.
Who regulates credit unions?
The National Credit Union Administration (NCUA) and the Iowa Credit Union Division regulate Iowa's state-chartered credit unions. Sixty percent of the nation's credit unions operate under a federal charter and are regulated solely by the NCUA. As mentioned above, however, the vast majority of Iowa's credit unions are state chartered and are primarily regulated by the state.
Are credit unions safe?
Yes! There are two primary indicators of a credit union's safety and soundness: its capital-to-asset ratio and the National Credit Union Share Insurance Fund (NCUSIF). On average, Iowa credit unions reserve more than 10 percent of their capital. These funds protect credit union members from unexpected losses. The NCUSIF, which is administered by the federal government, insures credit union accounts up to $100,000. Credit unions capitalize the NCUSIF in an amount equal to one percent of their deposits. The one percent capitalization along with earned interest brings the fund to approximately $1.30 per one hundred dollars of deposits. The NCUSIF is considered the premier insurance fund among all financial institutions. Every credit union in Iowa is federally insured, and no one has ever lost money in an Iowa credit union.
Do credit unions offer leading edge services?
Yes! Many Iowa credit unions are on the cutting-edge of products and service delivery. Products like home banking, online loan applications, automated response systems, check imaging, online bill pay, smart cards and debit cards can be found in credit unions of all sizes.
What is the Iowa Credit Union League?
Founded in 1930, the Iowa Credit Union League is the non-profit, professional trade association representing the interests of Iowa’s state and federally chartered credit unions.
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