I have a Credit Union account. Arkansas Federal Credit Union is no different than any bank. It has FDIC protection, branches all over the state. It’s a big operation. Anyone can get an account. It’s not restricted to employees. Its just a bank with a different name.
Are their any real Credit Unions left? For example an employer with sixty employees. Withholds deductions from their check and it goes into a credit union account. I’ve heard the pooled money was used for short term loans. Car loans, home repairs etc. Did the company’s payroll clerk run the credit union? Where was the money deposited? Did the Credit Union open a local bank account to keep the money?
Is that still done anymore? Are the banking laws too complex to allow traditional credit unions?
It’s probably not FDIC insured if it’s really a credit union. It would be the NCUSIF for a federal credit union, maybe for a state credit union too, or else some similar state body. In the end basically amounts to the same thing.
First of all, Arkansas Federal Credit Union isn’t FDIC insured, but instead is insured by the NCUA. And your description of a “traditional” credit union seems to imply that it’s controlled by the employer. But credit unions are member-owned cooperatives. So how could the employer be involved?
:smack: I’d forgotten that the CU protected the accounts with a different program thats similar to FDIC.
My CU has been really good. I just wondered if any really small CU’s still operated out of company payroll offices. I’d heard about them years ago, but wasn’t sure if they went the way of the dodo.
I never had an account with a small CU. I just heard about them from relatives when I was a kid. I thought employers ran them as a company benefit for their employees? It was a place for employee savings accounts and to make short term loans to employees.
The NCUA has a webpage describing the history of credit unions. It doesn’t sound like they were ever company-sponsored, which makes sense, as they have always been member cooperatives.
Ok, I was relying on second hand information from older relatives. I’ll look at the NCUA page you linked.
The CU was the only account my granddad had for many years. He always dealt with cash. Back then they were paid in cash and there wasn’t much left after paying the bills. Granny didn’t like having their savings at home and they didn’t trust banks. (this was after the bank failures leading into the depression). The CU was something they would use. Eventually my mom talked them into opening a checking account at a bank.
The Topeka City Employees Credit Union is still very small (four employees, one and only office in city hall), although it’s not limited solely to city employees anymore. It is member-owned, not city-owned, but you can pay loans, etc., by payroll deduction.
The regulatory niche that credit unions occupy required / requires what they call a “limited field of membership”. At a very high level, not just anybody can be a member / customer. Most CUs got started catering to a single local employer, say the big mine outside town or the railroad HQ or …
Over time the limitations have been softened. First it was spouses & kids of eligible persons. Then multiple companies were added to the mix.
Nowadays the “field of membership” for a typical CU is usually just anyone residing in a geographic area, such as a metro area. Some credit unions encompass whole states. Although they usually still retain the older more exclusive fields as well.
It remains the case that credit unions don’t offer business services. Some do mortgages, others don’t.
And there is some overlap between the multiple agencies which regulate banks, finance companies, and credit unions. And there are also some dedicated agencies and regulations applicable separately to each of the 3 main types of consumer financial institutions.
My current employer has a small credit union associated with it. The membership is restricted to current employees and retirees, and it has just a few hundred members.
I’m not actually a member of this credit union. Instead, I’m a member of a credit union associated with my former employer (the U.S. Navy). Size-wise, it’s the complete opposite - in fact, it’s the largest credit union in the U.S., with over 5 million members.
My parents and I use the local Ford credit union, as dad is a Ford retiree.
They merged a few years ago with some other credit union. I don’t remember if it was for another Ford plant or a different company altogether.
There’s a credit union in the next town over that was for the Chrysler plant. The plant has been demolished but the credit union still stands. My dad’s old plant is about the be demolished as well.
A lot of people can join AFCU ,certainly more that when it started and was restricted to employees of the Little Rock Air Force Base, but not just anyone. See the list here under “how to join”. There’s also a description of the origin that might explain your memories- it’s not inconceivable that a company might provide a small space in a factory or office building to an employee owned-and-operated credit union.
My credit union used to be just a local one for northern Colorado residents, but it got bought out by a big Texas CU when it got in trouble during the recession a few years ago. I’m not sure how that works with the limitations they are supposed to have on them, but I still trust them a lot more than the big banks.
I opened a Navy Federal Credit Union account in 1986 with the required minimum deposit of … I think it was twenty dollars. I had the account so that I could apply for my first credit card, a NFCU Visa. Other than that, I never touched the account.
I watched with mild curiosity over the decades as that $20 grew, until it was close to forty dollars a couple of years ago.
Then they changed their fee schedule and my hard earned cash vanished within a year. What a letdown.