Like the credit cooperatives, credit unions form associations of a higher level, which are called corporate credit unions. 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. Is necessary that all shareholders of the credit union were members of a single community, would know each other well enough to enjoy mutual trust. To reduce the risk of default on loans members of the credit union shall the joint guarantee. Shareholders in corporate organizations are basic credit unions, besides the same union can be a shareholder of several corporate organizations. The supreme body of the World Council of Credit Unions is the Assembly, which elects the president and the board of directors of WOCCU. In the UK, credit unions are a source of financing of people groups. This tool is not widely used. Credit unions, like today's credit unions, emerged in the 19th century in Germany as a result of crop failure and famine. 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.
Credit Union Location in Massachusetts
Is necessary that all shareholders of the credit union were members of a single community, would know each other well enough to enjoy mutual trust. To reduce the risk of default on loans members of the credit union shall the joint guarantee. 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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Main share of credit unions assets is concentrated in loans (about 50%), while the share of consumer loans in commercial banks and finance companies active operations rarely exceeds 15%. The most common type of loans in credit unions are loans to purchase new and used cars (40%), followed by first mortgages and second mortgages (35%), about 10% are unsecured personal loans to member of unions and about 15% - are loans on credit cards and other loans. The main advantage of credit unions consists in transparency, controllability, governance for shareholders. Income derived from the provision of services to its members, does not become the profit of credit union and is distributed among its members in proportion to their savings. 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. On the consumer credit market in the U.S. credit unions are on the third place after the commercial banks and finance companies and are ahead of savings institutions, not taking into account the loans on real estate. Worldwide credit union movement is represented by regional confederations and national organizations within the World Council of Credit Unions.