How is credit union different from bank?
The major difference between a credit union and a bank is that a credit union runs as none-profit financial institution while a bank is a for-profit financial organization. The federal government and state governments give credit union tax concessions so they can provide financial services to under-served geographical areas or demographic groups. In many cases, credit unions exist in business as alternatives to commercial banks to offer financial services with conveniences and low costs.
What are the credit union types?
The credit union type reveals two fundamental elements of a credit union: how the credit union is charted and how the credit union is insured. There are three basic types of credit unions in the US, federally chartered and federally insured , state chartered and federally insured, and state chartered and not federally insured.
What is a federal credit union?
According to the National Credit Union Administration (NCUA), all federally chartered and federally insured credit unions must have Federal Credit Union at the end of their names.
What are depository accounts?
Depository accounts are accounts that allow account holders to deposit and withdraw moneys. For credit unions, common depository accounts include regular shares (savings), share drafts (checkings), share certificates with certain maturity time periods (CDs), money market shares, and individual retirement accounts (IRAs).
What are loan accounts?
Loan accounts are accounts through which credit unions provide credits to their members. Common loan accounts include real estate loans or mortgages, new/used vehicle loans, credit card loans, student loans, and unsecured consumer loans. Many credit unions also offer commercial loans to their business or organization members.
What is type of membership of a credit union?
The type of membership (TOM), aka TOM code, determines where the members are from for a credit union. Below is the list a all TOM codes defined by NCUA:
- TOM_Code – Description
0 – Community credit union
1 – Associational – faith based
2 – Associational – fraternal based
3 – Associational – other than faith or fraternal based
4 – Educational
5 – Military
6 – Federal, State, Local Government
10 – Manufacturing – chemicals
11 – Manufacturing – petroleum refining
12 – Manufacturing – primary and fabricated metals
13 – Manufacturing – machinery
14 – Manufacturing – transportation equipment
15 – Manufacturing – all other
20 – Service – finance, insurance, real estate, trade
21 – Service – health care
22 – Service -transportation
23 – Service – communications and utilities
24 – Single common bond – other
34 – Multiple common bond – primary educational
35 – Multiple common bond – primary military
36 – Multiple common bond – primary federal, state, local government
40 – Multiple common bond – primary chemical
41 – Multiple common bond – primary petroleum refining
42 – Multiple common bond – primary and fabricated metals
43 – Multiple common bond – primary machinery
44 – Multiple common bond – primary transportation equipment
49 – Multiple common bond – primary other manufacturing
50 – Multiple common bond – primary finance, insurance, real estate, trade
51 – Multiple common bond – primary health care
52 – Multiple common bond – primary transportation
53 – Multiple common bond – primary communications and utilities
54 – Multiple common bond – primary faith based
60 – Corporate credit union
98 – Multiple common bond – other
99 – State chartered natural person credit union