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What is a Credit Union?


Credit Unions are kind of like banks… only in our humble opinion—we’re better!

Buckle your seatbelt… it’s time for a quick history lesson.

The credit union movement began in Germany in the mid-1800s. It started with a simple idea; people realized that by pooling their resources and making loans to neighbors they could achieve a better standard of living for themselves and others.

In the early 1900s, the first United States credit union was chartered in New Hampshire. A charter is the written instrument or contract used to form the credit union. The movement continued to grow.

In 1934, President Roosevelt signed the Federal Credit Union Act, authorizing federally chartered credit unions in all states. The act limited membership in credit unions to “groups having a common bond of occupation or association.” ēCO Credit Union, initially Jefferson County Teachers Credit Union, was chartered in 1939 to serve Jefferson County Teachers.

In 1970, The National Credit Union Administration formed to supervise federal credit unions. The National Credit Union Share Insurance Fund was created to insure credit union deposits. They still insure federal and state-chartered credit unions.

From 1970 to 1979, assets in credit unions TRIPLED.

In 1998, President Clinton signed The Credit Union Membership Access Act, restoring membership flexibility to credit unions. Thanks to flexibility granted by the act, ēCO has a community charter. We can serve people who live, work, worship, or attend school in Jefferson, Shelby, Walker, Blount, or Cullman County.

Now that you know a little history, let’s talk through the definition of a credit union.

Merriam-Webster defines credit union as, “a cooperative association that makes small loans to its members at low interest rates and offers other banking services (such as savings and checking accounts).”

Let’s break down the definition so it’s easier to understand. A cooperative is an organization owned by and operated for the benefit of those using its services. Credit unions are owned by our members, and our cooperative nature creates a cycle of people helping people. One member’s savings becomes another member’s loan. The people who have accounts at ēCO benefit when ēCO experiences growth and success.

And for the second part of the definition… Credit unions offer financial products and services. From loans to checking accounts, we work to meet the needs of our members with minimal fees.

Remember when we said we’re better than a bank? Let’s look at some of the things that make us different…


Credit Union




Insured by the NCUSIF

Insured by the FDIC



Member Owned

Owned by Shareholders

One Vote

Vote Based on Shares

Volunteer Board of Directors

Paid Board of Directors

Known by Name

Just a Number


Sounds good, right? Let’s talk through what the differences mean for you!

Credit unions are not-for-profit. We exist to promote the well-being of our members—not to make a profit. Profits made by credit unions are returned to members through reduced fees, higher savings rates, and lower loan rates.

As mentioned in the history of credit unions, we are insured by the NCUSIF. Deposits at ēCO are insured up to $250,000. When you deposit your funds at ēCO, you can trust they are safe and secure.

When you open an account at a credit union, you become a member. Learn more about what it means to be a member in our “What is a Member?” blog. To put it simply—when you open your Share Account with $1, you become a part-owner of ēCO Credit Union. Your ownership gives you one vote at ēCO. Whether you have $1 or $100,000 on deposit, you have an equal voice and representation. Members use their vote to help elect ēCO’s volunteer board of directors. The board of directors makes key credit union decisions.

And the cherry on top… because credit unions are smaller, we also know you by name. We work hard to get to know our members personally. We are here to help you through the hard times and to celebrate with you in the good times.

Ready to become a member of ēCO? Learn more about how to become a member. 

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