SIC 6062 Credit Unions, Not Federally Chartered

SIC 6062

This industry classification includes cooperative thrift and loan associations (accepting deposits) organized under other than a Federal charter to finance credit needs of their members.

NAICS CODE(S)

522130

Credit Unions

A credit union is a collective, cooperative financial institution created by its members for the benefit of these members. These members share a bond of employment or affiliation, which the credit union is designed to serve. At the end of 2004, there were 9,346 credit unions in the United States. According to industry data, credit unions serve 86.1 million Americans, but—with total assets of $668 billion—make up just a small piece of the national banking system, which is dominated by commercial banks, with total asset of roughly $8.6 trillion in 2005. Credit union loans to consumers were mainly in the home mortgage, auto, and credit card sectors.

At the beginning of 2004, there were 3,593 state-chartered credit unions in operation, with a total membership of 36.3 million and assets of $273.6 billion. Although membership and assets grew significantly during the 1980s and 1990s, the number of state-chartered credit unions declined, due primarily to industry consolidation, via merger and acquisition. In 1980, there were 4,900 state-chartered credit unions, but only approximately 12.3 million members and assets of $20.9 billion. Thus, over the same period, while the number of state-chartered credit unions fell by over 25 percent, membership nearly tripled and assets grew over tenfold.

Credit unions are owned by their members. Typically, these institutions collect the savings of their members and make loans to members from these accumulated savings. Unlike other financial institutions, such as commercial banks, credit unions are non-profit organizations that focus on serving their members. The primary objective of a credit union is not profit maximization, as no individual can claim any residual profit. Instead, credit unions attempt to maximize the economic and social interest of its members. The formation of credit unions was encouraged by a broad cooperative movement in the early years of the industrial revolution.

Membership in a credit union is limited to individuals or groups who are members of the organization (employer, association, residence, etc.) specified in the charter. These credit union membership criteria are collectively known as the common bond provision. An...