Why are Credit Unions Tax Exempt?
Most financial institutions like banks are owned by stockholders or shareholders, who intend on making money from their investment. A credit union doesn’t operate in that manner. Rather, they are owned by their members. Credit Unions provide financial services in a democratic, not-for-profit, cooperative manner. The board of directors serve as unpaid volunteers, elected by and from the membership. Credit Unions return excess income to members in the form of higher deposit rates, lower fees and loan rates, along with giving back to the local community in various forms. On the other hand stockholders are highly compensated directors.
What is the purpose of a Credit Union?
The primary purpose in furthering their goal of service is to encourage members to save money. Another purpose is to offer loans to members. In fact, credit unions have traditionally made loans to people of ordinary means. Credit Unions can charge lower rates for loans (as well as pay higher dividends on savings) because they are not-for-profit cooperatives. Rather than paying profits to stockholders, credit unions return earnings to members in the form of dividends or improved services.
Are savings deposits insured?
Yes. Your accounts are insured up to $250,000 per social security number by the NCUA, the National Credit Union Administration, an agency of the federal government.
Who can join CFCU?
A Credit Union exists to serve a specific group of people, such as a group of employees. This is called a “field of membership”. The field of membership for Cheney Federal Credit Union consists of everyone who lives, works, worships or attends school in the Cheney or Medical Lake School Districts, and their immediate family members.