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. The difference between credit unions and banks is clearly is apparent when comparing the structure of assets and liabilities of credit unions and banks. To reduce the risk of default on loans members of the credit union shall the joint guarantee. National Credit Union Insurance Fund was created by Congress in 1970 to insure deposits of credit union members in the amount of 100 thousand dollars. Until the mid-XX century, credit unions in the United States had little assets that did not exceed, as a rule, 100 thousand dollars In the UK, credit unions are a source of financing of people groups. This tool is not widely used. The right to use the services of the credit union have only its members. Credit cooperatives and credit unions exist in many different forms. The main differences relate to the nature of the membership and the opening of a credit institution.
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To reduce the risk of default on loans members of the credit union shall the joint guarantee. National Credit Union Insurance Fund was created by Congress in 1970 to insure deposits of credit union members in the amount of 100 thousand dollars. The difference between credit unions and banks is clearly is apparent when comparing the structure of assets and liabilities of credit unions and banks.
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In 1908. the spread of credit unions has reached the United States. In 1935 President Roosevelt signed the state Charter on credit unions, which became a law. 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. 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. Share contributions are transferred to the credit union on the basis of membership for the whole stay of a shareholder as member of the credit union and are the basis of membership. Since the early 80's started the process of consolidation of credit unions, leading to a decrease in their number with a simultaneous increase in the total number of members. The relationship of shareholders with credit union are not client-based, they are co-operative, based on different principles and standards, in particular, on the principles of the law of obligations. A credit union on its own initiative order is created by citizens (individuals) to solve their financial problems that they could not solve in other financial institutions.