In the next segment of “Informed” with Rob Lowe, credit unions will be taking center stage. These are perhaps the most under-appreciated financial institutions that are consumer-friendly. The membership growth of credit unions grew by 3.6 percent in 2016 according to the Credit Union National Association estimates. Currently, there are more than 7,000 credit unions in the United States of America. Unlike other financial institutions, credit unions operate on the simple principle of cooperatives. Its members are the major investors hence any profit realized through loan interests are shared among the members.
The profits realized through credit unions are solely used to enhance the financial lives of its members. Most people tend to confuse credit unions with other financial institutions such as banks. Although they offer the same services as banks, there is a clear distinction between the two when it comes to the manner in which credit unions are managed. Some of the loan products offered by these institutions include home equity loans, vehicle loans, credit cards, and mortgages. Some of the credit unions also offer health savings accounts.
The credit unions are insured by the National Credit Union Administration (NCUA) which is a government-backed agency. For you to become a member of a credit union, you will be required to initiate an initial deposit ranging from $5 to $50 with your preferred credit union. Catch up the next episode of the “Informed” with Rob Lowe for more information on credit unions.