Credit Unions

What are Credit Unions?

A credit union may seem like a cruel union of banks to squeeze every last penny out of debtors, but it's actually quite the opposite. While it's not a cruel union of debtors squeezing banks it does provide good services for your money. The biggest difference is that credit unions are not set on a profit. They will ideally try to break even exactly, that is why they can provide superior satisfaction and interest rates and so forth. A credit union consists of members and these members are the actual owners of the union. Only owners can deposit money or pick up money from the credit union and the economic practices of the establishment will be better for the members as a whole.

There are some restrictions on unions however. They are limited to a base of members that are in some way geographically connected. Many speculate about this rule, including myself, because the merger of unions is allowed, thus broadening the base to whatever they which. Also if the union was created for lawyers only any you change profession you will still be considered a member. Profit maximizing banks of course have a "slight" problem with credit unions because of the comparative advantages governments give them.

There is always a store of stores where small dealers go for stock. There is also a bank of banks where banks go for credit, this is usually the domestic national bank. it comes as no surprise that there is also a credit union of credit unions. These are called corporate credit unions and have much the same function as individual ones.

Credit unions have become more popular lately and this is also causing profit hunter banks to ease their strategy somewhat. Many unions have slogans like "people are more important than money" and "we put you first" and this puts pressure on banks to do the same. Credit unions communicate these slogans so strongly that they virtually "push" people into joining and looking at some facts their claims are mostly true. Given its benefits you couldalso say that investing in a credit union is riskier business than in a bank. Because banks are for profit maximizing they will probably have tons of cash backing them even in major events. If union members become insolvent at once than major problems could occur within that credit union. While this is not a major cosideration it is not without precedent.

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