construction workers

People who share an employer, such as these construction workers, are eligible for membership in a natural-person credit union.

©iStockphoto/Daniel Rodriguez

Natural-person and Corporate Credit Unions

If you're a member of a credit union through your workplace, church, school or community, you belong to what's called a natural-person credit union. A natural person, is simply an individual human as opposed to a business or corporation.

But even natural-person credit unions rely on larger financial institutions to supply them with enough liquidity (available cash) to run their businesses. These institutions are called corporate credit unions. There are about 30 corporate credit unions in the United States, all owned by their members, which are natural-person credit unions.

Corporate credit unions, like natural-person credit unions, can be either federal-chartered or state-chartered. They're regulated by either the National Credit Union Association (NCUA) or state banking authorities.

Confused? Here's how it works. Natural-person credit unions apply to be members of corporate credit unions. Even though they're called "corporate" credit unions, they're still not-for-profit. The corporate credit unions supply natural-person credit unions with low-interest loans to keep up their cash reserves. Other services offered by corporate credit unions are investment services, credit and loan services, business checking, wire funds transfers and more.

There's even a financial institution that provides financial services for corporate credit unions -- a credit union for corporate credit unions, if you will -- called U.S. Central. U.S. Central, like all other credit unions, is nonprofit and owned by its members (which in this case are corporate credit unions). Similar to the role that corporate credit unions play to natural-person credit unions, U.S. Central provides cash liquidity and investment services, as well as risk-management and analysis services to its member credit unions. U.S. Central boasts that it manages more than $49 billion in assets.

Where do the credit union members fit into the equation? On the next page, learn how you can join a credit union and what services are available to members.