Credit
unions were originally founded in Germany in the late 1800's, and the United
States in the 1920's, to provide a borrowing alternative to high interest
rates being charged by banks. They were founded, and still exist today, as
not-for-profit cooperatives. The board of directors is democratically elected
at the annual meeting, and serves voluntarily, that is, without compensation.
Any profits earned from operations of the credit union are returned to the
members in the form of higher dividends on savings, lower rates on loans,
or reduced costs for services. Last but not least, savings are insured to
$100,000.00, just like banks, by the Federal Government. Unlike banks, however,
insured credit unions nationwide have voluntarily contributed to the insurance
fund (called the National Credit Union Share Insurance Fund, or N.C.U.S.I.F.)
to assure that it remains the strongest of the federal deposit insurance funds.
