In the American banking market, credit unions belong, alongside savings banks and savings and loans associations, to the group of so-called thrift institutions.

These are typically established by groups of people linked by relationships resulting from common employer, shared interests, religion or living in the same neighbourhood. Credit unions operate along the lines of a cooperative. Their activities are not geared towards profit, but financial support to its participants. The source of capital is provided by the members' deposits (savings).

Credit unions may operate on the basis of a federal or state license. Currently there are around 12 thousand credit unions in the USA, with assets amounting to $ 316 bn. They extend services to 70 m Americans, 54% of whom are customers of fedaral credit unions (FCUs). With respect to state credit unions, it has to be noted that they may or may not be covered by a federal insurance (federally insured state chartered unions vs. non-federally insured credit unions) and are subject to state legislation only.

In the state of Illinois, which is often seen as the United States in miniature, there are 591 credit unions, including 141 federal, 404 federally insured and 45 non-federally insured state ones. Compared with other states with a much larger area, such as California or New York, it is an impressive amount. (California has 649 credit unions, New York - 641 of them).

The activities of federal credit unions are supervised by the National Credit Union Administration, while state credit unions are monitored by state authorities.

The deposits of credit union members are guaranteed, up to the amount of $ 100,000 by the National Credit Union Share Insurance Fund.

Credit unions focus on accumulating members' savings - whether on current accounts or time deposits. The funds thus acquired are transformed into loans. Credit unions offer low interest consumer or mortgage loans. In order to minimise the risk of bankruptcy, the unions invest free funds in safe money market instruments such as Treasury bonds.

It has to be noted that credit unions are constantly extending their range of services, thus creating tough competition for smaller commercial banks. We can probably expect a further expansion of credit unions, which may soon seize new segments of the market, currently under full control of strictly banking institutions.