The lasting impact of the mortgage and credit crisis of 2008 and 2009 left many Americans with a sour taste in their mouth for large banking and lending institutions. There has been adoption of the newly coined phrase “too big too fail” which has come to dominate the financial landscape for the last several years leading many Massachusetts residents to re-evaluate their relationship with their current financial institution. After further examination many have realized that they were being charged hidden fees and lacking the quality service they deserve from a banking institution. This new flight to quality service has been one the main reasons that there has been such a rise in credit union participation.
So What are Credit Unions? Credit unions are not-for-profit financial cooperatives serving groups of members who have something in common such as employment at a specific company, membership in an association, or living in a particular area if Massachusetts. They are are democratically owned and controlled institutions, formed around the idea of neighbors helping neighbors. Each member has an equal vote regardless of whether he or she has $500 in their account or $500,000.
There are Two Basic Types of Credit Union Structures
- A Community Credit Union – Serves anyone who lives or works within a particular geographical area.
- A SEG (select employee group) Credit Union – Also known as sponsor-based credit unions serve groups of employees or associations
Credit unions maintain a for members by members philosophy where only members may serve as directors, relying heavily on the volunteering of its members and surrounding community. It is estimated that about 90,000 Americans volunteer for their credit unions serving as board members, committee members, or providing other assistance. Because credit unions are not publicly traded institutions they are able to pass the profits back to the members in the form of lower fees and rates to their 
members.
Credit unions still offer you similar deposit protection that you would have under the FDIC. Deposits at federally-chartered and virtually all state-chartered credit unions are federally-insured by the National Credit Union Share Insurance Fund. This fund is administered by the National Credit Union Administration (NCUA). It is backed by the full faith and credit of the U.S. Government up to $250,000.
Members will tell you the reason they made the switch to a credit union and maintain their memberships for years is the customer service and personal attention. Technology has made our lives easier and more productive but it has also removed the human element from many of our day to day functions. The recent rise in credit union memberships proves that quality service and a neighbor to neighbor philosophy is still going strong.
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