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Quiz: Do you know how Credit Unions Work?
by Staff
During this worldwide financial recession, people are looking for ways to save money wherever possible. Credit unions offer a number of financial benefits to their members. Take this quiz to see if you know how credit unions operate and how they are different from banks.

What is a primary source of income for banks?

  • interest on loans
  • dividends
  • sale of stocks

What makes a credit union different from a bank?

  • They are not-for-profit institutions.
  • They are not allowed to make loans over $250,000.
  • They must issue credit cards to all of their account holders.

What happens to the profits made by a credit union?

  • They are reinvested in the institution or paid to members.
  • They are split by the credit union's board of directors.
  • Nothing; there are no profits.

How does the not-for-profit status of credit unions benefit their members?

  • Credit unions can charge lower interest rates on loans than banks do.
  • Members pay no taxes on dividends.
  • Members are not allowed to invest in commercial banks.

For which people were credit unions first established?

  • people connected via a common organization or institution
  • military veterans
  • Catholic priests

Approximately how many members do credit unions have worldwide?

  • 2.3 million
  • 96 million
  • 172 million

What is the primary complaint about credit unions from the banking industry ?

  • unfair competition
  • unsafe investment
  • predatory lending

Where and when were the first credit unions formed?

  • England, 1844
  • Germany, 1849
  • Canada, 1903

Who were the first German credit unions designed to help?

  • poor city residents
  • middle-class farmers
  • wealthy landowners

Where was the first credit union opened in the United States?

  • Manchester, NH
  • Boston, Mass.
  • Abilene, Texas

Under which U.S. president was the Federal Credit Union Act passed?

  • Herbert Hoover
  • Franklin D. Roosevelt
  • Harry S. Truman

What credit union organization was established in 1934?

  • Credit Union National Association (CUNA)
  • National Credit Union Share Insurance Fund (NCUSIF)
  • World Council of Credit Unions (WCCU)

Which of the following years saw the highest number of credit unions in the U.S.?

  • 1905-04-30 23:00:00
  • 1905-05-21 23:00:00
  • 1905-06-29 23:00:00

What did the U.S. Supreme Court determine about credit unions in 1998?

  • that some had unfairly signed up members without any common bond
  • that they were being forced out of business by big banks
  • that they did not sufficiently disclose who their board members were

What do natural-person credit unions gain from their affiliation with corporate credit unions?

  • liquidity
  • insurance
  • power

What is the legal status of a corporate credit union?

  • non-profit
  • not-for-profit
  • for-profit

What institution provides liquidity to corporate credit unions in the United States?

  • U.S. Central
  • National Credit Union Association
  • Federal Reserve Bank

What does the Federal Credit Union Act require for someone to qualify for membership in a credit union?

  • a common bond with other members of the credit union
  • an initial minimum deposit of $500
  • a commitment to remain a member for at least a year

What is the average annual interest rate charged on a credit union credit card?

  • 8.9 percent
  • 10.27 percent
  • 12.15 percent

What is a drawback of some credit unions?

  • fewer branches and ATMs
  • higher account fees
  • have to open more than one account