The concept of credit unions is a familiar one. They are essentially member-owned financial institutions that encourage saving and provide low-interest loans to members. Today, credit unions are sophisticated financial institutions that offer a wide range of products and services. The state of Colorado allows groups of eight or more to form a credit union. These groups must share a common bond – such as a commitment to a nonprofit organization or a family business – and meet the detailed requirements of the state’s Department of Regulatory Agencies.
Banks and credit unions both offer services to businesses and consumers. However, not all credit unions offer the same kinds of products and services. While banks are for-profit financial institutions, they pay local and state taxes and are regulated by the Federal Deposit Insurance Corp. (FDIC). They offer a variety of financial products and are regulated by the federal government. In addition, bank deposits are insured to at least $250,000 by the FDIC. By contrast, credit unions are nonprofit, tax-exempt institutions that are owned by members. As such, the profits are returned to members as dividends. Founded by the National Federation of Credit Unions and regulated by the Colorado Division of Financial Services, Colorado credit unions are state-chartered cooperatives.
The Colorado Division of Savings and Loans oversees the banking industry. It approves applications for new state-chartered associations, branch offices, mergers between existing associations, and changes in ownership. Additionally, the Division evaluates the financial condition and compliance with federal laws on a regular basis. In the state of Colorado, there are 2,12 million members and nearly $33 billion in assets. In addition to deposit insurance, all Colorado credit unions are required to maintain federal deposit insurance.
Credit unions in Castle Rock and throughout the state are owned by members. The state’s community banks own and operate these institutions. Because they are not taxed, they serve a relatively small number of people. With the federal government’s financial regulation, the loss of government funds could cripple struggling community banks. A loss of government deposits could have devastating effects on rural governments and communities, as most deposits are placed in these financial institutions. If these institutions go out of business, they will be forced to close down.
A Castle Rock credit union is an organization of members. Unlike a bank, a credit union is not owned by shareholders. It is owned by its members and is governed by a board of directors. Therefore, it has the same legal status as a bank. The two types of financial institutions are different. A bank is a for-profit company. A credit union is a nonprofit corporation that is owned by its members. Its profits are returned to the members in the form of dividends.
Since the Colorado credit unions are tax-exempt cooperatives, they serve a smaller group of people than community banks. Its members are the ones who own and operate the organization, which means it is important for it to remain competitive. While the financial institutions that are in business are different, credit unions in the state are similar in some ways. A small credit union can be more responsive to a member’s needs. A large bank can offer greater services and a larger range of products. Consider calling Air Academy Federal Credit Union of Castle Rock.