Historically, credit unions were preceded by widespread development of credit cooperation in many countries of Europe and America. Credit union is created by a group of members who pursue a common interest. Agreeing to make regular contributions, they create a fund from which can borrow money for investments and replenishment of working capital at favorable interest rates. Specialization of credit unions to provide financial services to its shareholders requires a particularly strict regulation of membership and acceptable activities. In the U.S. credit unions timely and full repayment of loans is a common phenomenon. Unpaid and delinquent loans are not more than 3% of their amount. At the organization of the credit union it is important that people know each other and know the extent to which each of them is trustworthy. The main advantage of credit unions consists in transparency, controllability, governance for shareholders. Membership in the credit union forms responsible citizens and conscientious attitude to their obligations as a norm of behavior, identify the value of a decent man's reputation in the business turnover. In the credit union compensation for use of the loan (interest) is a source of compensation for savings. Credit unions base their activities on savings of shareholders, their shares and savings contributions, which make up the fund of mutual financial assistance - a source of cash loans to shareholders. U.S. credit unions have another significant difference from the credit cooperatives of farmers: the first have major proportion of short-term loans, the second - long and mostly in real estate.
Credit Union Location in Indiana
Specialization of credit unions to provide financial services to its shareholders requires a particularly strict regulation of membership and acceptable activities. In the U.S. credit unions timely and full repayment of loans is a common phenomenon. Unpaid and delinquent loans are not more than 3% of their amount. Credit union is created by a group of members who pursue a common interest. Agreeing to make regular contributions, they create a fund from which can borrow money for investments and replenishment of working capital at favorable interest rates.
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The economic basis of credit unions - finances of a household. The main objective of the credit union - to ensure financial stability of a household, to ensure the priority of their shareholders' financial interests. Like the credit cooperatives, credit unions form associations of a higher level, which are called corporate credit unions. Credit unions encourage savings of citizens, setting compensation payments (interest) on savings and provide from these savings loans to their members. The uniqueness of credit unions is that they put together the principles and benefits of financial cooperatives, consumer cooperatives and mutual aid funds, born once by trade unions. First Credit Union was savings unprofitable institution, or rather credit cooperative, providing services to its members. Typically new members of the credit union become citizens having suretyship or recommendations from their friends - members of the credit union. Shareholders in corporate organizations are basic credit unions, besides the same union can be a shareholder of several corporate organizations. Credit unions historically formed as a special form of social support, initially taken upon themselves the social mission of protecting the interests of citizens in the field of financial services.