Question:
They are making money off of customers, whether it be from loans or stick you with a overdraft fee?
also they are upgrading there computer systems/building new branchs. How the heck can you be claimed as a
non-profit when these things occur?

Answer:
Because they pay those profits back to their members/customers in the form of dividens. Credit Unions are designed to make money for their customers. Of course they have to pay the salaries and all the overhead, and usually keep a certain amount of liquid cash in reserve to work with, but the remainder is paid back to the account holders — making them non profit.

As far as upgrading and building new buildings, these sorts of things are done by a vote of the board of directors which the members of are voted on by the customers. If the board feels its necessary to build a new branch, to better serve the members, or to upgrade computers, to better serve the members, they have the right to take away from the profit pool to do so. This means that the members get less a dividen than they would have that particular year. If the members think the board is spending fivously, cutting into their profits, they vote in new members of the board to correct for that activity.

It's a very democratic way of doing things, but, just as in the case of our federal and state governements, these board members (like politicians) take advantage of the fact that very few members actually use their democratic voice when it comes to the choices they make.