DOB: Consumer FAQ about Connecticut Credit Unions

{letter}

Consumer
Frequently Asked Questions (FAQ)
About Credit Unions

Consumer Inquiries or Complaints | Operational FAQ

 

What is a credit union?

Credit unions are nonprofit, cooperative financial associations owned and democratically run by their members. The goal of a credit union is to provide a safe place for its members to save their money and to borrow at reasonable rates. Membership in credit unions is limited to groups having a common bond of occupation or association, or to groups within a well-defined neighborhood, community or geographic district, along with the immediate families of such members.

What is a corporate credit union?

Corporate credit unions do not serve the public directly, but rather act as credit unions for other credit unions. They play a vital role in the credit union system by providing investment, liquidity and payment services to their member credit unions.

Are my shares (savings) insured at a credit union?

A credit union cannot operate in Connecticut unless its shares are insured by the National Credit Union Administration (NCUA). Share accounts totaling $250,000 or less are fully insured. The NCUA's insurance fund, like that of the Federal Deposit Insurance Corporation (FDIC) for banks, is backed by the "full faith and credit of the United States Government".

When were credit unions first organized?

The idea for a credit union first dates back to the mid-1800's in Europe. Credit unions were organized in Canada in the early 1900's, and shortly thereafter Boston merchant Edward A. Filene actively promoted the concept of credit unions in the United States. The first American credit union was established in New Hampshire in 1909.  For more information, read about the history of credit unions at the National Credit Union Administration web site.

Connecticut's first law providing for the licensing and supervision of credit unions was passed in 1939, but no associations were ever organized under that Credit Union Act. In 1945, the General Assembly amended the law and brought within the supervision of the Department of Banking the operations of existing mutual benefit associations, which corresponded in some ways to credit unions, and any new credit union which might be subsequently organized under state law. Under the provisions of the revised Act, which became effective in October 1945, 57 associations were issued state licenses, with nine associations later being liquidated.

In September 1946, the 48 licensed credit unions in Connecticut had 4,950 members and held assets of $1.1 million. In comparison, as of September 2009, Connecticut state-chartered credit unions had nearly 295,000 members, with assets of $3.28 billion.

What if I need more information or have a complaint regarding a credit union?

Visit our consumer help page for more information on common credit union issues or to register a complaint concerning a credit union operating in Connecticut.



Content Last Modified on 1/22/2010 10:10:34 AM