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Members of a credit union share a common bond, also known as the credit union's ?field of membership.? Many employers sponsor their own credit unions.

There are two main categories of credit unions?state chartered and federally chartered. While both provide the same general benefits characteristic of many credit unions, there's one key difference between the two. Federal credit unions are regulated and supervised by the National Credit Union Association (NCUA).

Credit unions are not-for-profit enterprises that enjoy tax-exempt status. A federal credit union (FCU) is a credit union regulated and supervised by the National Credit Union Association (NCUA). State credit unions instead adhere to state-specific regulations and guidelines, but not all states have such laws in place.

The common bond is the factor which unites the members of a Credit Union together i.e. those living or working in the same area may join a credit union. It defines the area in which a credit union can operate. The common bond ensures that the savings of members of the community are available to fellow members as loans.

Credit unions typically offer lower fees, higher savings rates, and a more personalized approach to customer service for their members. In addition, credit unions may offer lower interest rates on loans. It may also be easier to obtain a loan with a credit union than a larger bank.

The (common) bond of association or common bond is the social connection among the members of credit unions and co-operative banks. Common bonds substitute for collateral in the early stages of financial system development.

The main difference is whether the permit to do business as a bank was granted by the state government or the federal government. Whenever a new bank organization is started, the owners apply for either a state or national (federal) bank charter.