A consumer credit union is a type of financial institution that is owned and controlled by the consumers who choose to become members of the union. In general, the credit unions help to promote the idea of saving and thrift among members, making it possible for the collective fiscal strength of that saving to provide various financial services for all members. A consumer credit union will typically offer such services as check and savings accounts, car loans, mortgages, and a range of services that are very similar to those offered by banks and other financial institutions.
The structure and organization of a consumer credit union will vary somewhat from one country to the next. In some nations, this type of institution is considered to be a non-profit cooperative, since the strength of the consumer credit union lies in the investment of its members in the organization. Other nations require that credit unions follow regulations that apply to other financial institutions, and consider the unions to be for-profit rather than non-profit organizations.
The target membership of a consumer credit union may be very broad, or somewhat focused on consumers who are associated with a given industry type. For example, the credit union may be open to anyone who lives within a given geographical location, or be set up for people who are associated with a given faith tradition. At other times, the target audience may be individuals who work in a given field such as telecommunications or education. Over the years, some consumer credit unions move from focusing on a target audience to opening its doors and range of services to others in the community, regardless of their work or other affiliation.
The structure of a consumer credit union is such that the resources deposited with the union help to dictate the scope of services that are offered to members. It is not unusual for this type of credit union to have fewer assets on hand than a consumer bank, which means that the caps on the total amount of mortgages or other types of loans that the institution can grant is lower. Still, a consumer credit union can often provide competitive terms and provisions for loans, including interest rates that are equal to or sometimes even better than the rates offered by banks. In addition, the rates offered on savings accounts are often competitive with other institutions, making the possibility of becoming a member of a consumer credit union well worth considering.