Credit Union

Credit Union, financial cooperative and credit association that provides loans to its members at lower rates of interest than would otherwise be available. The capital funds of credit unions come from the purchase of shares by members, who receive yearly dividends on the basis of their investment. Credit unions are operated for the mutual benefit of their members and are usually formed by people who share a common bond, such as membership in a Church, lodge, trade union, or professional association. Many corporations and government bodies have assisted their employees in establishing credit unions. The loans are usually for the acquisition of consumer goods rather than for the purchase of real estate. The first credit union was established in 1864 by a group of farmers in the German Rhineland. The movement has since grown immensely, especially in continental Europe and the United States.