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A credit union is a cooperative financial entity that's owned and controlled by its members. They operate exclusively for the provision of credit, promotion of thrift, as well as other financial services to its members. It is a democratic institution where members, regardless of the size of their accounts, also run as volunteers on the board and are able to cast their votes during union elections. While both banks and credit unions serve the financial needs of its customers, there are certain differences between the two. A major one to note is that banks are beholden to stockholders, while credit unions are owned by its members. There are various ways that you can qualify for membership. Considering that the union is an organization that allows members to save their money together and lend to each other with affordable interest rates, the members themselves are the ones who decide exactly what qualifications must be met to join. Often, there's important information for the individual to know regarding the procedures for opening an account. There are specific identification processes mandated by the Patriotic Act of the USA, an Act that was put in place to help fight funding of possible terrorism and money laundering activities in financial institutions in the US. The law requires that financial institutions obtain all the information necessary to identify someone who wants to open an account. The acquired information must be verified and recorded within the financial entity. When you find an organization that you qualify for, it's vital that you understand what services are offered, and how they are different from banks and other financial institutions. The two most common types offered by these financial organizations are checking and savings accounts. Additionally, loans are a large part of the union business too. The savings account balances are put in a common fund, and loans are sourced from this fund. The interest paid is put back into the savings fund pool, and the profit generated by the interest, benefits all the members. To join the financial organization of your choice, contact them and find out the basics, such as: how much money is required to join, what paperwork is needed, and any applicable service charges. Most countries, including the US, have a national backing for their credit unions. This means that your investment is protected and guaranteed, even in the case where problems arise within your particular financial institution. Thinking about joining a credit union? Metairie residents can click here for helpful information: https://www.noffcu.org.
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