The Credit Union Difference
What makes a Credit Union different from any other financial provider?
- Credit unions are owned by all their members. One Member One Vote.
- Every Credit Union is a ‘not-for-profit’ financial co-operative.
- Surplus income generated is returned to the members as a dividend to savers and/or an interest-rebate to borrowers, or it may be directed to improve or provide additional services for members.
- Membership of a Credit Union is open to people who have, in relation to all other members, a unique ‘common bond’.
- There are no transaction charges on loans or saving accounts.
- Loans are insured at no direct cost to the eligible member.
- Savings are insured at no direct cost to the eligible member.
- Flexibility -you can repay a credit union loan earlier or make larger repayments than agreed with no penalty.
- Additional lump sum repayments are accepted with no penalty.
- The Credit Union also works in co-operation with the local community.
|Credit Unions||Other Financial Providers|
|Not-for-profit, member-owned financial coperatives||For-profit institutions owned by shareholders|
|Conduct business solely with their members, and their members are in turn the owners of the credit union. There is a coincidence of ownership and consumption.||Conflict between depositors and borrowers (the customers) and shareholders (the owners).|
|Members share a common bond, such as where they live or work.||Typically serve middle-to-high income clients. No restrictions on clientele.|
|Credit union members elect a volunteer board of
directors from their membership. Members each have one vote in board elections, regardless of their amount of shares in the credit union.
|Shareholders vote for a paid board of directors who may not be from the community or use the bank’s services. Votes are weighted based on the amount of stock owned.|
|Surplus monies generated from business activities belong to the members, and are returned to members by way of a dividend or
|Shareholders receive a pro-rata share of profits.|
|Exist to attain the economic and social goals of members.||Exist to maximise profit and shareholder wealth|