A credit union is a member-owned financial institution organized to encourage savings and to provide loans with competitively low interest rates to members. In Alabama, as elsewhere, credit unions have evolved into sophisticated financial institutions offering a variety of services to members. Alabama law restricts credit union membership to people who share a “common bond,” such as the same employer, the same union or benevolent association, or some similar connection.
Alabama has detailed and complex requirements for the formation and operation of credit unions. Because of the complexity of these laws, an organization seeking to set up a credit union needs expert assistance. Consideration should be given to joining an existing credit union before deciding to start a new one.