Where do credit unions come from?

June 7, 2005 9:30 AM

I am a credit union kind of person. There are no credit unions in my county. Traveling to the nearest credit union is too great a hardship to be a suitable solution. Is there a way I could cause a credit union to be formed here? What is involved in establishing a credit union?
posted by willpie to work & money (3 comments total)

I think this manual may give you the dry details of what you are looking for. Here' s a pulklquote from the rules section which outlines the most important part of what your credit union must be

In 1934, Congress passed the Federal Credit Union Act "to establish a Federal Credit Union System, to establish a further market for securities of the United States and to make more available to people of small means credit for provident purposes through a national system of cooperative credit, thereby helping to stabilize the credit structure of the United States." That Act, as amended, sets forth the basic structure which governs federal credit unions today:

• Each credit union is funded by shares purchased by its members. The purchase of a share allows the member to become an owner with the right to vote.

• Membership is limited to a group, or multiple groups, each defined in the credit union's charter, each of which have a common bond of occupation or association or are located within a well-defined neighborhood, community, or rural district.

• Member control is democratically exercised regardless of the number of shares held. No member has more than one vote.

• Management is placed in the hands of volunteers. Only one board officer may be compensated. No other member of the board of directors or any other committee member shall, as such, be compensated.

• Loans, which are the primary investment for credit unions, are made exclusively to members.

In short, you need to charter your credit union with federal or state regulators. The people who host that manual are just one agency that can do that. You can find more by googling about for "starting a credit union" This ten-steps article is easily the easiest thing to read on the subject.

Also, I am in the same boat as you and I decided to join a credit union that had superb online banking and no ATM fees. I have directly deposited paychecks and except for not having a friendly teller to talk to [I have actually never been to my bank, but I chat with them over IM when I have account issues] and the occasional check to mail them, it's been completely wonderful.
posted by jessamyn at 9:53 AM on June 7, 2005

I live on the west coast and do all my banking at a credit union on the east coast - I've been a member there for over fifteen years and never saw a good reason to change banks. Through the wonders of direct deposit, online banking and no-fee ATMs, I rarely need to visit a branch. When I do, I can go to a local Credit Union Service Center. Obviously this isn't quite what you're asking, but I wanted to point out that proximity to a branch isn't always crucial.
posted by bendy at 12:08 PM on June 7, 2005

FWIW, I rarely visit my credit union. My dark-ages employer still issues paper checks, I deposit at a regular bank ATM w/o hassle.

I visit a branch maybe twice a year, only when I'm buying / selling a vehicle or house. With a little foresight I wouldn't even need to do that.

I'd also like to point out the customer service @ my CU is above and beyond fantastic. They appreciate my business and reverse any erroneous charges immediately and without hassle. I will never go back to a bank.

My paycheck to paycheck friends think I'm nuts. When I hear about their bank fees and bad service, I think they're nuts.
posted by vaportrail at 7:41 PM on June 7, 2005