How Credit Unions Work

You might think credit union is just another way to say bank. But it’s not! Although we often offer the same products and services, there are many differences. Credit unions are not-for-profit cooperatives owned and governed by members; banks operate for profit and are owned by stockholders, who aren’t necessarily customers of that bank.

Credit unions also universally follow a set of cooperative principles created in 1844. At LGFCU, these principles aren’t just a list, but the core of everything we do.

We live the cooperative principles

The original seven cooperative principles serve as a foundation and continue to contribute to the great success of many cooperatives around the world today. As credit unions continue to grow and evolve, LGFCU has led the way for the creation of an eighth cooperative principle focused on diversity, equity and inclusion.

In 2019, the Credit Union National Association adopted this 8th Cooperative Principle, establishing it as a cooperative principle for America’s credit unions.

1. Voluntary membership. Credit unions are voluntary, cooperative organizations, open to all people eligible to use their services and willing to accept the responsibilities of membership — without gender, social, racial, political or religious discrimination.
2. Democratic member control. Credit unions are democratic organizations owned and controlled by their members, who each have one vote and equal opportunity to participate in setting policies and making decisions.
3. Member economic participation. Members are the owners, contribute to and democratically control the capital of the credit union, which directly impacts the success of a credit union.
4. Autonomy and independence. Credit unions are independent, self-help organizations controlled by their members.
5. Education, training and information. Credit unions provide financial education for members, and training for all volunteers and employees so they can contribute effectively to the development of the cooperative.
6. Cooperation among cooperatives. Credit unions serve their members most effectively and strengthen the cooperative movement by working together through local, state, regional, national and international structures.
7. Concern for community. Credit unions work for the sustainable development of their communities through policies approved by their members.
8. Diversity, equity and inclusion. Cooperatives seek to incorporate diversity, perform equitably and ensure inclusion at all levels of their organizations to better serve members, show members they are valued and ensure members receive equitable service.

Whenever you’re doing business with LGFCU, online or offline, you’ll see the eight cooperative principles in action. For more on how all of these principles are incorporated into what we do for you every day, read the LGFCU story.