Connections is a NOT FOR PROFIT cooperative, established only for the purpose of serving the financial needs of our members. Most financial institutions are operated to make a profit for their stockholders or owners, but credit unions distribute their profits back to their members. Members' savings form a pool of money from which loans are made to other members. Borrowers are charged a reasonable rate of interest on their loans as a form of rental on the money they are using. This interest provides income to cover operational expenses and build required reserves. After expenses are paid and reserve commitments are met, remaining funds are distributed to members, usually in the form of dividends on savings.
At Connections we strive to stay consistent with the original Credit Union values and culture. It is important to us to keep members first, always providing excellent member-service while looking out for the over-all good. We are proud to exemplify the Credit Union motto "People Helping People".
Credit Union FAQs
People who have never been a member of a credit union often have some questions about how they can own the institution where they do their banking. We've provided answers to some of the basics here.
- What's a credit union?
- Who owns a credit union?
- How did credit unions start?
- What is the purpose of a credit union?
- Are savings deposits insured?
- Who can join a credit union?
What's a Credit Union? A credit union is a cooperative, not-for-profit financial institution organized to promote thrift and provide credit to members. It is member-owned and controlled through a board of directors elected by the membership. The board serves on a volunteer basis and may hire a management team to run the credit union. The board also establishes and revises policy, sets dividend and loan rates, and directs certain operations. The result: members are provided with a safe, convenient place to save and borrow at reasonable rates at an institution that exists to benefit them, not to make a profit.
Who owns a credit union? The members. Most financial institutions are owned by stockholders, who own a part of the institution and intend on making money from their investment. A credit union doesn't operate in that manner. Rather, each credit union member owns one "share" of the organization. The user of credit union services is also an owner, and is even entitled to vote on important issues, such as the election of member representatives to serve on the board of directors.
How did credit unions start? The first credit union cooperatives started in Germany over a century ago. Today, credit unions are found everywhere in the world. The credit union movement started in this country in Manchester, New Hampshire. There, the St. Mary's Cooperative Credit Association, a church-affiliated credit union, opened its doors in 1909. Today, one in every three Americans is a credit union member.
What is the purpose of a credit union? The primary purpose in furthering their goal of service is to encourage members to save money. Another purpose is to offer local loans to members. In fact, credit unions have traditionally made loans to people of ordinary means. Credit unions can charge lower rates for loans (as well as pay higher dividends on savings) because they are nonprofit cooperatives. Rather than paying profits to stockholders, credit unions return earnings to members in the form of dividends or improved services.
Are savings deposits insured? Yes. All savings accounts are insured up to $250,000 by the NCUA, the National Credit Union Administration, an agency of the federal government.
Who can join a credit union? A credit union exists to serve a specific group of people, such as a group of employees or the members of a professional or religious group. This is called a "field of membership." The field of membership may include where they live, work, worship, shop or their membership in a social or economic group. Our current membership includes Ada, Bannock, Bingham, Bonneville, Canyon, Jerome, Minidoka and Twin Falls counties.