CONSUMER HOW-TO CHOOSE A CREDIT UNION

WHAT IS A CREDIT UNION?

• Photos

A credit union is a cooperative financial institution, owned and controlled by the people who use its services. These people are members. Credit unions serve groups that share something in common, such as where they work, live, or go to church. Credit unions are not-for-profit, and exist to provide a safe, convenient place for members to save money and to get loans at reasonable rates.

Credit unions, like other financial institutions, are closely regulated. The National Credit Union Administration (NCUA), an agency of the federal government, insures credit union deposit accounts up to $100,000.

What makes a credit union different from a bank or savings & loan? Like credit unions, these financial institutions accept deposits and make loans -- but unlike credit unions, they are in business to make a profit. Banks and savings & loans are owned by groups of stockholders whose interests include earning a healthy return on their investments.

FIVE WAYS TO FIND A CREDIT UNION

IMPORTANT NOTES

* Credit unions offer many of the same services as banks, usually at better rates and terms: Checking, consumer loans, mortgages, and investment accounts.

* Credit unions are notfor- profit, and exist first and foremost to serve their members.

* Credit union members are also owners. Members elect a volunteer Board of Directors to strategically guide the organization.

Credit unions are for everyone, but the law places some limits on the people they may serve. A credit union's charter defines its "field of membership," which could be an employer, church, school, or community. Anyone who lives or works in a community, for example, is eligible to join a community-chartered credit union.

If you don't belong, here's how to find a credit union to join:

1. Contact the Minnesota Credit Union Network. Dial (800)477-1034, or visit www.mncun.org on the web to search for credit unions in your area.

2. Ask your family. One in three Americans belong to a credit union. Chances are you have a family member that uses credit union services. And most credit unions allow members' families to join.

3. Quiz your friends and neighbors. Many credit unions have a "community" field of membership, serving a region defined by geography rather than by employment or some other association. Ask friends in the community if they know of a credit union you may join.

4. Read the yellow pages. Some credit unions rarely advertise, so you might not know about them unless you look them up. A yellow pages display ad may state a credit union's field of membership. If not, at least you'll know what number to call to ask about membership eligibility.

5. Contact the Credit Union National Association. Dial (800)358-5710 or visit www.cuna.org and check their online database of credit unions.

CREDIT UNIONS VS. BANKS

A credit union is a cooperative, not-for-profit financial institution. It is owned and controlled by its members, and organized to bring savings and give credit to those who belong. Proponents of credit unions say earnings are returned to members in the form of higher savings rates, lower loan rates, fewer fees, and expanded services.

In contrast, a bank is a financial institution that accepts deposits and makes loans to corporations and individuals for a profit. A savings and loan institution is in business to accept deposits and make loans, primarily for first and second mortgages, at a profit.

Credit unions see healthy returns on investments in order to help their members, while other financial institutions send investment returns to their stockholders.

Credit unions give members a voice. Members vote for a board of directors from the general membership.

Directors serve on a voluntary basis and hire a Chief Executive Officer, who in turn hires staff to manage the credit union. All members receive information on the state of the credit union, generally in the form of newsletters and other periodicals, such as the credit union's annual report.

U.S. credit unions have a flexible, highly organized cooperative network - the Credit Union System. The system works at the local, state, and national level.

There are over 10,000 credit unions throughout the country serving over 80 million members. Minnesota is home to nearly 200 financial cooperatives which serve well over 1,000,000 members.

Founded on a philosophy of service, credit unions adhere to the pledge of 'People Helping People.'