The Value of Membership
What Makes Credit Unions Different?
Credit
Unions
Credit
unions are not-for-profit financial institutions.
We are democratic organizations, owned
and controlled by our members for our
members. We have been afforded tax-exempt
status by the federal government.
The
primary mission of a credit union is to
provide service to its members.
Each
credit union receives direction from unpaid
volunteers, elected by and accountable
to its members.
Each
credit union, as part of its founding
purpose, has a philosophical duty to educate
our members about financial products and
services.
Each
credit union is capitalized only through
member equity and retained earnings.
Each
credit union almost always charges lower
fees for services and makes small, unsecured
loans that other financial institutions
prefer not to make.
Banks
Banks are organized
to produce a profit for the stockholders
and are institution-owned, controlled
and operated for the benefit of their
stockholders. This qualifies them to pay
taxes like all other for-profit institutions.
The
mission of almost all banks is to make
a profit for their stockholders.
Banks
do not have a restricted customer base.
Banks
are guided by salaried volunteers, elected
by and accountable to directors, answerable
to the stockholders and not the customer.
Banks
have no similar obligation to educate
their customers because of their motive
for profit.
Banks
are capitalized through stock offerings,
other borrowing, and retained earnings.
Banks
have been criticized for their fee practices
and have avoided small non-collateralized,
consumer loans.
The Essentials of a
Credit Union Every
credit union is a not-for-profit cooperative
is:
• Governed
by a volunteer board of directors elected
by the membership and serving without pay.
• Owned by their members who are paid dividends
based upon the earnings of the credit union.
• Insured by the National Credit Union Share
Insurance Fund, offering standard financial
services ? savings plans, consumer loans,
checking accounts, and other services depending
on member desires and size. • Founded
and grown through membership. To become
a member, a qualified person purchases a
share (usually from $5 to $50) of the cooperative,
which is placed into a share/savings account.
This purchase then allows the member to
apply for other services and benefits.
• Limited in membership to those persons
meeting each credit union's charter and
by-laws guidelines.
A Legacy of Service
and Satisfaction
Credit unions are not new. Originating in Europe, credit
union history
began in this country when the first credit union was
formed in New Hampshire in 1909. Today, more than 10,000
credit unions with approximately $480 billion in assets
serve more than 79 million people in the United States.
More and more people join credit unions every year, and
they are pleased with the service.
Credit unions have rated No. 1 in customer satisfaction
at financial
institutions for 10 years according to the American Banker
Newspaper's annual customer satisfaction survey.
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Article submitted by Credit Unions of South Florida (www.cusf.org)
