Local Government Federal Credit Union FAQ

What is a credit union?

A credit union is a cooperative, not-for-profit financial institution organized to promote thrift and provide credit to members. LGFCU is member-owned and controlled through a board of directors elected by the membership at the LGFCU Annual Meeting held each April in Raleigh, NC.

The board elects from its own members a Chair, Vice-Chair, Secretary and Treasurer. The President, Loan Review Committee and Supervisory Committee are appointed by the board. The board also appoints Advisory Councils members throughout the state in order to assist in meeting the needs of members, as well as establishes and revises policy, sets dividend and loan rates and directs certain operations. All directors, council members and committee members are volunteers who contribute their time and effort without compensation.

The result: members are provided with a safe, convenient place to save and borrow at reasonable rates at an institution existing to benefit them, not to make a profit.

Who owns a credit union?

Most financial institutions are owned by stockholders who intend to make money from their investment. A credit union doesn't operate in that manner. Rather, each credit union member owns one "share" of the organization. The "share owner" is an actual owner and is entitled to vote on important issues, such as the election of member representatives to serve on the board of directors.

When did credit unions start?

The first credit union cooperatives started in Germany more than a century ago. Today, credit unions are found worldwide. The U.S. credit union movement started in Manchester, New Hampshire. There, the St. Mary's Cooperative Credit Association, a church-affiliated credit union, opened its doors in 1909. Today, one in three Americans is a credit union member.

What is the purpose of a credit union?

The primary purpose of a credit union's goal to serve is to encourage members to save money. Another purpose is to offer loans to members. Credit unions traditionally make loans to people of ordinary means. Credit unions can charge lower rates for loans (as well as pay higher dividends on savings) because they are not-for-profit cooperatives. Rather than paying profits to stockholders, credit unions return earnings to members in the form of dividends or improved services. Credit unions also put great emphasis on educating members in regard to financial matters.

Who is LGFCU?

LGFCU is North Carolina's fourth largest credit union, with more than 200,000 members and $1.1 billion in assets. LGFCU members are comprised of municipal and county employees, elected officials, firefighters, volunteers and their families across the state of North Carolina.

What is the difference between LGFCU and SECU…are they the same credit union?

On March 21, 1983, the National Credit Union Administration granted a federal charter for the N.C. Local Government Employees' Federal Credit Union (LGFCU). Recognizing an opportunity for efficiency, LGFCU contracted the State Employees' Credit Union (SECU) to deliver services to its members. LGFCU members go to SECU branches for loans and account services, as well as utilize their ATM network. LGFCU pays SECU to provide credit union services—an efficient and convenient way to serve the membership. Members also utilize LGFCU's online services. Eligible individuals join LGFCU by visiting the nearest SECU branch office or by submitting the membership application to the Contact Center, staffed seven days a week.

It may be natural to assume that because LGFCU members go to SECU branch offices for services that the two credit unions are the same. The fact is, LGFCU is a separate financial institution from SECU. As such, LGFCU has an independent board of directors and management. Another distinction is that LGFCU is federally chartered and therefore regulated by the National Credit Union Administration. SECU is state-chartered and receives its oversight from the NC Credit Union Division. Some of the services and many of the policies and rates are the same for both credit unions. However, there are occasions when policies and rates differ between the two credit unions. In such cases, the difference in the demographic and financial make-up of the two credit unions is usually the reason.

Who can join LGFCU?

To be eligible for membership, an individual must be associated with either a local government unit or a current member of LGFCU.

Local government units include towns, cities, counties and associated departments (such as Fire, Law Enforcement, Planning, Finance, Recreation & Parks, etc.). They also include government owned hospitals, libraries and authorities, such as housing, airport and water/sewer.

Persons eligible to join LGFCU:

  • An employee, elected official, or appointed official of a North Carolina local government unit
  • An immediate family member of an LGFCU member
  • A volunteer for a local government unit
  • N.C. volunteer and paid firefighters
  • Retirees from local government
  • A spouse of a deceased person who was eligible for membership
  • A person living in the same residence and maintaining a single economic unit with an LGFCU member

Membership in LGFCU is obtained by opening an individual Share Account. This requires a minimum deposit of $25, and can be done by visiting a local branch or by calling the Contact Center. Once a person is a member, they may remain a member, regardless of retirement or subsequent employment. The individual only needs to maintain the minimum deposit in a Share Account.

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