credit union definition

credit union

Financial cooperative created for and by its members who are its depositors, borrowers, and shareholders. Operated on non-profit basis, credit unions offer many banking services, such as consumer and commercial loans (usually at lower than market interest rates), time deposits (usually at higher than market interest rates), credit cards, and guaranties. Credit unions are normally taxed at rates lower than those applied to commercial banks and other financial institutions. Their members often have a common-bond, such as employment in the same firm or domicile in the same community. Credit unions are a type of mutual association.

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