CREDIT UNION 101
This course is easy. There's no tuition, you can enroll anytime you want, the term only lasts about five minutes and you get to grade your own paper. So, are you ready to enroll in Credit Union 101? Then take your seat.
Class is now in session!!!
A credit union is similar to a bank, thrift or savings and loan in that a credit union provides financial services to a group of customers. But there are distinct differences that set a credit union apart from other financial service providers. Here's how you tell the difference.
Ownership - Credit unions are owned by their customers. But instead of customers we call them "members". Other financial institutions have stockholders who own the institution. A stockholder can own a share of stock in a commercial bank (for instance) but never have to actually transact business with that bank. A credit union member, on the other hand, is both an owner and "user" of the credit union to which they are a member. When a person joins a credit union part of their initial deposit is their "share" of ownership in the credit union. In order to be considered a "full share" member of a credit union a member must have the "minimum share balance" on deposit at the credit union. This minimum share balance is the members money, not a joining fee or membership dues. The deposit of a full share in the credit union simply signifies that an individual is a full fledged member and entitled to all the privileges and services membership provides.
Control - Stockholders control a commercial bank. And the more stock you own the more you control. A credit union, on the other hand, is democratically controlled. Each member has an equal say in the control and direction of the credit union. Regardless of how much a single member may deposit in the credit union it's still one member, one vote. And credit union members get to elect a board of directors from among themselves. If an individual is a member of a credit union they are also eligible to run for and serve on the credit union's board of directors.
Compensation - The board of directors of a commercial bank receives compensation for having served on the bank's board. A credit union board, on the other hand, serves on a voluntary basis with NO COMPENSATION. In otherwords, a credit union's board is not in it for the money.
Operating Structure - The profits of a commercial bank are paid to the stockholders. That is why a commercial bank is referred to as a "for profit" institution. Each time a customer transacts business with a commercial bank a portion of (a) the interest they pay on a loan, (b) the interest they could have earned on their deposits or (c) the fee they pay for other services goes to pay a return on the stockholder's investment. A credit union, on the other hand, is referred to as a "not for profit" institution. Since there are no stockholders excess profits are returned to the members in the form of (a) reduced interest rates on loans, (b) increased dividend rates on deposits or (c) low or NO charge for other services.
Deposit Insurance - Deposits into a commercial bank are generally insured by the Federal Deposit Insurance Corporation or FDIC up to $100,000. The FDIC is an agency of the United States government. Deposits in a credit union are insured by the National Credit Union Administration or NCUA up to $100,000. The NCUA is an agency of the United States government. OK, so there's not a lot of difference in the deposit insurance. Both agencies are backed by the full faith and credit union the U.S. government. But they do have different names!!!
TIME TO REVIEW
So, class, let's review. If I join BrightView Credit Union:
- I am an owner of the credit union, not just a customer
- I get to elect the board of directors; might even get to serve on the board of directors
- The board of directors serves with no compensation which means they aren't getting rich off of my hard earned money
- I get to keep more of my money in my pocket because the credit union will charge me less for their services. (Less money spent at the credit union means more money to spend elsewhere!!!)
- My deposits in the credit union are just as safe as my deposits in the local bank.
TEST TIME
This final exam is pretty simple. All you have to do is answer one question and it's multiple choice. Here it is.
Question: In order to get the best deal in financial services what should you do?
(a) Join BrightView Credit Union or
(b) Keep doing business with the local bank
If you answered (a) you made an "A" and you passed the course. Click on Who Can Join and find out if you are eligible to join. If you are eligible to join then come on down. If you work for a group that is not on the list of who can join BrightView Credit Union, tell your supervisor, human resources director or general manager to call us so we can sign up your group today. We'd love to make you a part of our group so you can start enjoying the credit union advantage TODAY!!!
