You’re part of a credit union–wonderful! But what, exactly, does that mean? How will it affect your day-to-day life? What does credit union membership mean for your checking account, your auto loan, and your financial future?
You already know that being a credit union member is different than being the customer of a bank. You also know that it’s not just about semantics-members of credit unions OWN those credit unions. And that’s a whole different story from banks, where customers not only don’t own it (just a few shareholders pocketing all the profits, but more on that in a moment), sometimes it even feels like the bank kind of owns YOU!
Yet there’s more to it than ownership. Here’s why:
Credit unions, by definition, are not-for-profit cooperatives. In fact, years ago a common credit union tagline was; “not for profit, not for charity, but for service.” What this means is that every nickel earned by the credit union goes directly back into benefiting all members of that group. It’s what makes credit unions cooperatives.
That can happen in several ways. One, you may get a special dividend (yup, money right back into your pocket) at the end of our fiscal year. In fact, in 2013, credit unions returned tens of millions of dollars to their members in the form of dividend checks.
And banks? Nothing. Oh, wait. Banks actually turned a profit of $42.2 billion in just one quarter of 2013, according to the FDIC. How much of that did their customers see?
That’s right. Exactly nothing. And just as regrettable, it’s highly doubtful that a whole lot of those profits stayed in the local economies of the branches that produced them.
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