Legal Dictionary of Pakistan

credit union

A cooperative association that offers low-interest loans and other consumer banking services to persons sharing a common bond - often fellow employees and their family members. ( Most credit unions are regulated by the National Credit Union Administration. State-chartered credit unions are also subject to regulation by the chartering state, and they may be regulated by state banking boards. "Credit unions were the last major thrift institutions developed in the United States . . . . What distinguished credit unions from mutual savings banks and savings and loan associations was their emphasis on a common bond of workers, church members, or people in a local area, wanting to borrow relatively small amounts at reasonable interest rates from each other, and help each other save to meet these short-term needs. Their goal was to provide a low interest rate alternative (6-9 percent and preferably the lower) to loan sharks and pawnbrokers." William A. Lovett, Banking and Financial Institutions Law in a Nutshell 284 (1997).