Financial cooperatives are organizations that provide loans and other financial services. They include credit unions, Farm Credit banks, and other lenders that help cooperatives and community businesses.
In this section, we’ll focus on the two most common types of financial cooperatives: credit unions and the Farm Credit System. These organizations are owned by their members and are designed to serve their members’ needs rather than make profits for investors.
Credit Unions
Credit unions are financial institutions owned by the people who use them. They offer many of the same services as banks, including savings accounts, checking accounts, loans, and credit cards.
To join a credit union, you usually need to have something in common with other members, such as where you live, where you work, or membership in a certain group.
Credit unions are not-for-profit organizations. Instead of paying profits to investors, they return money to members through better savings rates, lower loan rates, and fewer fees.
More than 140 million people in the United States are credit union members. That means one out of every three Americans uses a credit union for their financial services.
Examples of Credit Unions
UW Credit Union is a member-owned, not-for-profit financial institution that is federally insured. It serves more than 386,000 members by offering everyday financial services such as checking and savings accounts, loans, and investments. Members can access services through online and mobile banking tools as well as 35 branch locations. UW Credit Union serves people in University of Wisconsin communities across the Madison, Milwaukee, Stevens Point, Green Bay, Oshkosh, Whitewater, and La Crosse areas.
Navy Federal Credit Union is a federally insured, member-owned, not-for-profit financial institution that serves members of the military, veterans, Department of Defense employees, and their families. It is the largest credit union in the United States, serving more than 15 million members worldwide. Navy Federal offers a full range of financial services, including checking and savings accounts, loans, mortgages, credit cards, and investment services. Members can access their accounts through digital banking tools, a large network of branches, and thousands of ATMs around the world.
Resources
Inclusive Finance: Financial Performance and the Economic Impact of Community Development Credit Unions. Inclusiv, 2018.
Cooperation among Cooperatives: Quantifying the Business Case for Credit Unions and Other Cooperatives. Filene Research Institute, 2015.
Model Law for Credit Unions. World Council of Credit Unions, 2015.
International Lessons for Young Adult Membership Growth: Technical Guide. World Council of Credit Unions, 2015.
Co-op Power. Credit Union Magazine, January 2012.
Farm Credit System
Created in the early 1900s, the farm credit system is comprised of consumer-owned financial service providers dedicated to supporting rural communities and agriculture. The farm credit system includes nearly 70 local and regional service providers and four regional wholesale banks. Farm credit institutions provide products tailored for the needs of agricultural producers, farmer-owned cooperatives and other agribusinesses, rural home buyers, and rural infrastructure providers.
Examples of Farm Credit Institutions
Compeer Financial
Compeer Financial is a member-owned financial cooperative that supports farmers, agricultural businesses, and rural communities across Illinois, Minnesota, and Wisconsin. It provides loans, leasing, risk management, and other financial services in 144 counties throughout the region. With more than 1,500 employees serving over 80,000 member-owners, Compeer Financial offers specialized expertise and personalized support for farms and agribusinesses of all sizes. Services are delivered both in person, by meeting customers where they live and work, and through technology that makes banking and financial management more convenient.
CoBank is a national cooperative bank serving vital industries across rural America. The bank provides loans, leases, export financing and other financial services to agribusinesses and rural power, water and communications providers in all 50 states.