Corporate Credit Unions

Corporate Credit Unions

Corporate credit unions are credit union that provides services to consumer credit unions. It is also known as central credit union. Both are Member-owned credit unions but in corporate credit unions, the member-owners are consumer credit unions not the consumers themselves.

Purpose

According to Debbie Matz, chairman of the National Credit Union Administration, the main purpose of corporate credit unions is to provide consumer credit unions with banking and investment services. For example: clear checks and can process, settle electronic transactions.

Benefit

Their ability to aggregate funds from consumer credit unions is one of the most important benefit of corporate credit unions.

History

Consumer credit unions had to rely on the banking industry to fill their voids before the formation of corporate credit unions in the 1970s. According to the National Credit Union Administration, Corporate gained the nickname the "credit union's credit union”.

Significance

According to the National Credit Union Administration, 99 percent of consumer credit unions use corporate credit unions. A daily transaction of corporate credit union system is maximum five million. Consumer credit unions elect the board of directors as members giving votes to decide the direction the corporate credit union takes.