New Hampshire Credit Union

In your best interest

Many people do not see a distinction between these very different types of institutions and that is a shame.  Because, while you can get many of the same financial products from a variety of providers, their fundamental approach to doing business may eventually have an impact on how well you sleep at night. 

Credit unions are not-for-profit democratically controlled financial cooperatives.  Here is what that simple definition means to you..

To begin with, credit unions are not-for-profit.  This simple phrase distinguishes the credit union as a business that exists for a purpose other than enriching its owners.  The purpose of the credit union is to provide high-quality, low-cost financial services.  On the other hand the purpose of a for-profit institution is quite simply to generate a profit and if they provide good products and services while doing so that is an added benefit.

Because credit unions are not-for-profit they can and usually do offer the consumer lower rates on loans, higher rates on savings, and fewer and smaller fees on accounts.  Revenue that would be handed to third-party owners as a corporate profit is instead returned to the members by improving product, price, and service.

Perhaps the least widely known or understood part of this credit definition is the idea of democratic control.  The notion that a consumer has the opportunity to voice equal control over the future of his or her financial institution is outside the experience of most consumers.  While democratic control might not be fully appreciated but it is what ensures that the credit union will be run for the benefit of all its members.

Democratic control makes the credit union a part of the communities it serves rather than an engine of profit seeking markets where it can reap maximum revenue.  Individual credit union members who determine the future of the credit union have no better use for the capital that the institution controls than to continue the credit union’s mission of service to the community.  The stockholders who own the bank are always on the look out for a way to make the bank more profitable, including merging or selling out of a market.

The last of the three core components of the definition is the idea of the credit union as a financial cooperative.  A cooperative business is one which is established to benefit all of its members/owners.  This notion of a financial business as a shared resource that brings value to all of its members has been with the credit union movement since its inception and it clearly separates credit unions from all other financial businesses.

Credit unions are the most successful and widespread of cooperative business in the United States.  This form of ownership provides a useful, in fact an essential, check on the conglomerates that are exercising increasing control over retail commerce.  Businesses that are run by and for the people who use them set pricing and service benchmarks that benefit all consumers.

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