Credit Unions are not-for-profit organizations, which means they do not operate for the purpose of generating profits for their shareholders. Instead, credit unions are member-owned financial cooperatives where members pool their money to provide loans and other financial services to each other at competitive rates.
Here's why Credit Unions are not-for-profit organizations:
1. **Ownership**: Credit union members are also the owners of the institution. When someone becomes a member of a credit union, they are essentially becoming a part-owner of the cooperative.
2. **Purpose**: The main goal of credit unions is to provide financial services to their members at lower costs and with better terms than traditional for-profit banks. They focus on serving their members' needs rather than maximizing profits for shareholders.
3. **Structure**: Credit unions operate under a cooperative structure, where decisions are made democratically by members, and any surplus funds are typically reinvested back into the credit union to benefit the members.
4. **Tax Status**: Due to their not-for-profit status, credit unions are exempt from federal income tax because of their focus on serving members rather than making profits.
Therefore, the statement "Credit Unions are for-profit organizations" is False. Credit Unions are not-for-profit organizations that exist to serve their members' financial needs in a cooperative manner.
