Financial problems cause stress and anxiety for employees that can translate into increased absences, accidents, and poor performance. Credit unions can help solve employees' financial problems. Credit unions offer a full range of financial services that can include checking accounts, retirement plans, credit cards, first and second mortgages, auto loans, and educational loans.

Because credit unions often provide credit at better rates than other sources, they relieve the pressure on the employer to get involved when an employee is faced with a financial crisis. For these reasons, employers affiliate with and encourage employees to join a credit union. Thirty-three percent of respondents to BLR's Survey of Employee Benefits reported that they had a credit union for employees.

Federal credit unions can act as trustees or custodians for their members' health savings accounts (HSAs) under a National Credit Union Administration rule. The rule helps maintain parity between federal credit unions and other financial institutions with the ability to offer HSAs. Additional information on HSAs is available. Please see the national Health Care Insurance section.

Credit unions are nonprofit organizations run by their members. Employees join a credit union by depositing money and then become eligible for all the offered services. In many credit unions, immediate family members are allowed to become members.

An employer may sponsor a credit union itself or may contact an existing credit union to inquire about making its employees eligible for membership. Under the Credit Union Member Access Act of 1998, employers with up to 3,000 employees may associate with an existing credit union that is seeking new affiliates. Employers may want to evaluate an existing credit union for financial soundness, variety of services offered, competitive interest rates, and convenience of location for employees before affiliating.

Employer involvement in setting up and running a credit union can vary. Some companies provide professional management advice and expertise either at the time the credit union is organized or on an ongoing basis. Others subsidize the credit union's payroll. Many companies provide indirect assistance in the form of office space or telephone services for use by the credit union.

Employers that make a credit union available to their employees typically publicize the service in new-employee orientation packets, handbooks, newsletters, etc.

Most companies affiliated with a credit union set up a payroll deduction system for deposits and loan payments.

Many states strictly regulate the deductions that may be made from employees' pay and written authorization is almost always required. Check state legal requirements before making credit union deductions, e.g., whether approved deduction authorization forms are needed.

Credit unions are organized and supervised by both federal and state law. The Federal Credit Union Act is the main authority for federal credit unions. Membership in credit unions is limited to groups with a common bond of occupation or association (such as employment by a single employer), several groups with multiple common bonds, or groups within a geographic area.

To set up a credit union, contact either a state or federal agency for advice.

To organize a federal credit union, contact the National Credit Union Administration (NCUA) in Arlington, Virginia. The NCUA oversees the National Credit Union Share Insurance Fund, which insures all federal credit unions and many state-chartered credit unions. Employers may call the NCUA at 703-518-6300, or visit the administration's website at ncua.govand access the Chartering and Field of Membership Manual.

To organize a state-chartered credit union, contact the state regulatory agency.

Additional information is available from the Credit Union National Association (CUNA) in Madison, Wisconsin. This association of individual credit unions encourages the establishment of new credit unions and provides training and other support services to its members. Contact the CUNA at 800-356-9655, or visit its website atwww.cuna.org.

Other information may be available free of charge from state credit union leagues and officials of existing credit unions.