Credit Union

A credit union offers the same basic services as a bank, including checking and savings accounts, debit and credit cards, auto loans, and mortgages, but it is a not-for-profit cooperative owned by its members. Members usually qualify through a shared connection, such as where they work, live, worship, or serve in the military. Profits are returned to members through lower loan rates, higher savings rates, or lower fees.

Deposits at federally insured credit unions are protected by the National Credit Union Administration rather than the FDIC. According to the NCUA, the National Credit Union Share Insurance Fund, backed by the full faith and credit of the United States, provides up to $250,000 of federal share insurance to account holders.

Being a nonprofit does not exempt a credit union from consumer lawsuits. Credit unions follow the same federal rules on overdraft opt-in, electronic transfers, and credit reporting as banks, and many class actions have targeted credit union fee practices, including:

• Overdraft fees charged on debit transactions that were approved when the account had enough money but settled later.
• Multiple NSF fees for the same payment when a merchant resubmitted it.
• Fees that account agreements did not clearly disclose.

Some of those cases have settled with refunds to members, and the individual amounts depend on how many fees each person paid. Check your statements for repeated fees on the same item. See our overdraft and NSF fee lawsuit page and the guide on how to get overdraft fees refunded.