What is a Credit Union?

A credit union is a not-for-profit financial cooperative, owned and operated by its members and governed by a volunteer board of directors. The credit union is dedicated to the credit union philosophy of “people helping people.” Rather than paying profits to stockholders, credit unions return earnings to members in the form of dividends and improved member services. Loan and dividend rates are frequently more favorable than those available at commercial lending institutions. Although the structure and philosophy behind credit unions are unique, in some ways, credit unions are indeed like banks. They offer many of the same services and each depositor is insured up to $250,000 by the NCUA, a federal agency.

What is a Community Development Credit Union?

More than sixty years ago, a small number of credit unions were founded with the specific mission of serving low-income and minority communities beyond the reach of banks and mainstream credit unions. These “community development credit unions” (CDCUs) also offer an alternative banking option for social investors.

CDCUs offer an economic lifeline to low-income communities that have been abandoned by commercial banks and targeted by high-priced check cashers and predatory lenders. CDCUs also provide a platform to serve the broader community through outreach to disadvantaged populations and neighborhoods, participation in government programs, and partnerships with the private-sector in community revitalization efforts.