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Credit Unions

A Credit Union is a cooperative financial institution that is owned and controlled by its members. Credit unions differ from other financial institutions (banks, savings and loan). In this the members who have accounts in the Credit Union are the owners of the Credit Union. Policies of the Credit union governing interest rates and other matters are set by a Board of Directors elected by and from the membership itself. Only a member of a Credit Union can deposit money or borrow money from it. As such, Credit Unions have historically marketed themselves as providing superior member service and being committed to help members and to improve their financial health. Credit unions typically pay higher interest rates on deposits and charge lower interest on loans than banks. Credit union revenues (from loans and investments) do, however, need to exceed operating expenses and dividends (interest paid on deposits) in order to maintain capital and solvency.