Understanding Credit Unions

Through thw Q&A detailed below, here’s the 411 on credit unions:

WHAT IS A CREDIT UNION?
A credit union is a financial cooperative organization, not for the sole purpose of making profit but to provide service for members.

WHAT IS THE DIFFERENCE BETWEEN CREDIT UNIONS AND OTHER FINANCIAL INSTITUTIONS?
A. The difference is in the structure. Other financial institutions are owned by stockholders who seek to profit from their investment in the organization. Credit unions are owned cooperatively by all of their members without regard to the amount of money that a member has in the credit unions.

B. Credit unions are directed by the volunteers from within the membership. Credit unions return profits to their members in the form of dividends, loans, rates, fees and services.

C. Credit union does business only with their members.

HOW DOES A CREDIT UNION OPERATE?
A credit union accepts deposits from its members and offers to them a range of financial services. Members elect a board of directors at their annual general meeting. The board in turn employs a general manager to manage the day-to-day operations of the credit union. Credit union members may be elected to serve on committees in the credit union.

HOW DOES A PERSON BENEFIT FROM BEING A CREDIT UNION MEMBER?
A. A credit union member is a co-owner of his credit union.

B. Each member has equal voting power (one vote), the same as all other members in the credit union, irrespective of the amount of his savings.

C. Each member has the power to exercise his/her democratic right in determining by whom and how his credit union is run.

D. A credit union member shares in any surplus that is earned annually.

E. Credit unions now offer a range of financial services, in some instances, the same as those available at other financial institutions.

F. Members can determine the type of financial services the credit union should provide.

G. Members are helped to save through the habit of thrift that is encouraged by credit unions.

H. Members can save directly and transact business at their credit unions through salary deduction facilities that are available at credit unions.

HOW CAN I FIND A CREDIT UNION TO JOIN?
Each credit union can serve only those people who are eligible for membership. You are eligible for membership in one or more credit unions based on where you or your family members live, work or worship. This is referred to as the common bond.

For more information, contact your nearest credit union.

What Can A Credit Union Do For You?

Some of the 190 million credit union members around the world are enjoying the benefits of saving with a credit union. You could be one of them.

Credit union members enjoy many benefits, including lower loan rates, competitive rates on savings and lower fees, a say in how their financial organization is run, and many others.

Common Bond
Credit unions are for everyone, but a credit union’s common bond defines its ‘field of membership’ which could be a place of employment, a professional body, church or school association, or your community.

Here’s how to find a credit union to join:

• Ask your colleagues at work. Your company may sponsor a credit union or may be a sponsor group that has access to a credit union. Many employers may directly deposit your salary to the credit union.

• Ask your family. Does your spouse’s employer sponsor a credit union? Most credit union invite family members to join. Each credit union, however, may define ‘family’ differently. At some, only your immediately family members are eligible. At other credit unions, family may include extended family members such as grandparents, uncles, cousins and aunts.

• Quiz the neighbours and your friends. Some credit unions have a community ‘field of membership’ serving a region defined by geography rather than by employment or some other association. Parish credit unions fall into this category. Your telephone directory can also assist you in finding credit unions.