Credit unions have historically occupied a great niche among the depository institutions; these unions, are non – profit institutions, member owned cooperatives exempt from paying federal income taxes on their earnings. Opposite from banks, the unions are subject to membership limits because the main idea is that the members should actually have some kind of bond, a common bond, such as working for the same employer, or living in the same area and community.
Over the years though, the requirements and specifications of the memberships have loosened, especially since some of these unions have received some serious and expanded power. Even though questions were raised, on whether these institutions are really different than banks nowadays, given their strength and expansion, we can definitely say that even the biggest credit unions do remain unique and feature much more beneficial terms and products than the regular banks.
Since the 90s the union industry has experienced some serious growth and a great expansion of activities. Moreover, recent changes in legislation and regulation have limited the differences between lending and financing institutions and the biggest credit unions. For instance the C. Union Membership Access Act expanded the definition of common bond, providing for reform intended to strengthen the safety and soundness of the unions, including instituting procedures for prompt corrective actions when the capital levels of the biggest unions fall below some certain threshold.
