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Clearing up credit union confusion

Elizabeth Thomas

Elizabeth Thomas

For years credit unions have quietly and unassumingly served their members well, not looking for recognition. But many misconceptions about credit unions still exist today.

Most people believe they cannot join a “federal” credit union due to the fact they are not a “federal” employee. “Federal” simply refers to whether a credit union has a “federal” charter, as opposed to a “state” charter.

Recently, however, the tides have begun to turn and the national media has started to recognize the great service and cost effective financial products that credit unions can offer their members. While some credit unions exist to serve select employee groups, many have expanded their field of membership to serve all residents of areas surrounding their branch locations.

Credit unions have a different structure than banks, with one of the primary differences being the ownership of a credit union belonging to its members and not stockholders. Credit unions are not-for-profit and have a vested interest in enhancing their members’ financial future because when they succeed, the credit unions succeed.

As a not-for-profit, the net income from a credit union is not paid to shareholders. The net income is returned to the credit union members in the form of higher deposit rates, lower loan rates, or additional products and services. You’ll also find lower fees and higher rates of return. Banks, on the other hand, need to generate profit from their customers to return to the shareholders (who may not even be a customer of the bank).

A few things you might not know about credit unions:

• Through 2009 and into 2010 one of the biggest shakeups on Capitol Hill has been credit card reform. On Feb. 22, 2010 the CARD Act took effect to help regulate the skyrocketing credit card rates, fees and predatory actions from some lenders.

If you have a card with a rate that has been raised to 25, 28, or 30 percent, think again. By federal regulations, federally chartered credit unions cannot charge over 18 percent on their credit cards, and in this economy, most have rates established below the double digit mark. The CARD Act did not impact credit unions, because credit unions have always operated under the “people helping people” philosophy.

• While it may seem impossible to find a loan anywhere these days, credit unions are still lending, just as they have been for the past 101 years. The original intent of a credit union was for like-minded individuals to pool their money together and help each other by granting loans at low rates to make it through tough times. Credit unions are doing exactly that now.

• Don’t know if you’re eligible for membership or where to find your nearest credit union? It’s simple. Just visit and enter your zip code.

• Some credit unions, such as Pioneer Federal Credit Union (PFCU), participate in a Shared Branching network that enables you to conduct transactions (deposits, withdrawals, etc.) in over 4,000 locations just the same as if you were in your home branch. There’s an iPhone application to find your nearest Shared Branching location, as well as a 1-800 phone number.

Visit for more information on the network and a branch location near where you live, work or are on vacation.

• All credit unions are insured to at least $250,000. Administered by the National Credit Union Administration, the National Credit Union Share Insurance Fund is backed by the “full faith and credit” of the U.S. government. The NCUSIF has been voluntarily capitalized by credit unions since 1985 by depositing 1 percent of their deposits into the fund. No federal tax dollars have ever been used for a bailout, and no member has ever lost money insured by the NCUSIF. Some credit unions are privately insured but still must offer the $250,000 insured minimum.

Pioneer Federal Credit Union has been a member owned, Idaho credit union since 1954. Its first branch location was at Mountain Home Air Force Base and initially served civilian employees. Today, PFCU has 13 branch locations throughout southwestern Idaho, plus more than 4,000 additional branch locations through Shared Branching.

Its membership eligibility includes people who live, work, or worship in Ada, Blaine, Camas, Canyon, Elmore, Gooding, Jerome, Twin Falls, Adams, Gem, Owyhee, Payette, and Washington counties. Plus, if you are related to anyone that is eligible for membership, you qualify as well.

PFCU is an active part of the communities it serves and it all goes back to the credit union philosophy of “people helping people.” Along with its many community activities, PFCU also offers low rates on loan products such as Visa, home loans, autos, recreational vehicles, and signature loans.

PFCU, through our subsidiary service organization, Pioneer Financial Services also offers a full array of insurance products such as auto, home, and health insurance. Pioneer Financial Services also has a mortgage department. Visit our Web site at or find us on Facebook and Twitter.

If you’ve never experienced the credit union difference, now is the time to make the move. There are many credit unions, such as Pioneer Federal Credit Union, offering great member service with a community minded philosophy. Find an Idaho credit union that fits your families’ values and financial needs; you’ll like what you find.

This column was written by Elizabeth L. Thomas, assistant vice president of marketing at Pioneer Federal Credit Union in Mountain Home.

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