People are ditching their big banks and taking their money to credit unions for good reasons. A Credit Union is owned by its members, not a handful of investors and owners. Unions provide members with consumer loans, mortgages, and other loans that are pooled from members’ savings. As a result of their growth, credit unions are offering  more and more services that rival big banks. They are quickly expanding their lending programs and many include mortgages, member business loans, student loans, and standard consumer loans.

Joining a credit union is limited to qualifying members that live in the area the credit union is in, or that belong to a group that the credit union wants to help. For instance, the Monterey Federal Credit Union is limited to residents of Monterey County. USAA Federal Credit Union is limited to members of the military, as is Navy Federal Credit Union. Credit unions also serve people that have a certain employer, like the USC Credit Union serving employees of the University of Southern California. To join, members must be eligible and purchase a share of the credit union. That share also counts as a vote in the credit union’s officer elections.

This vote actually means something. Members have the authority to set laon limits as the credit union grows. They have the power to elect the board of directors which set the interest rates that are charged. Along with a board of directors, a watch dog committee is also established to make sure the credit union is staying true to its high savings and prudent borrowing philosophy.

Credit unions are banks that are owned by the members that use them. They encourage their members to save regularly and are strict about lending their money out, which only goes to members. Credit unions need to be good stewards to their members’ dollars. If they give without scrutiny, then a few bad loans can turn the entire union upside down.

Customer service reps for credit unions are trained to give their members the best advice for their family, and not the best advice to benefit the bank. If the members have good advice and financial planning, then the bank thrives. More money can be safely lent out, more money comes into the bank as interest that then gets divided amongst the members in the form of dividends. A credit union is cooperative, and is therefore able to fairly price their rates on savings accounts and loans which helps stabilize their members’ finances and solidify the company.

Credit Unions are an alternative to big banks where you can get to know your customer service representatives. You can feel safe that your money is protected by good lending practices and that you are gaining more in interest and dividends than big box banks.