 | Stan Cowan
has worked in the financial industry for over eight years and is currently VP of marketing for Boeing Wichita Credit Union. His education includes a BBA and MBA from Wichita State University. He also teaches part-time for the Wichita branch of Baker University. Stan can be reached at (316) 651-5169 or scowan@bwcu.org |
Banking & Finance
2002-10-01 13:30:00
About credit unions
: What exactly is a credit union? How does it differ from a bank? Can anyone be a depositor/borrower? Are all depositors/borrowers members? Do the members own the credit union? Are profits distributed to the members? What can a bank do that a credit union cannot? What can a credit union do that a bank cannot?
Stan Cowan
Question: What exactly is a credit union? How does it differ from a bank? Can anyone be a depositor/borrower? Are all depositors/borrowers members? Do the members own the credit union? Are profits distributed to the members? What can a bank do that a credit union cannot? What can a credit union do that a bank cannot?Answer: Although a credit union performs most of the same financial services as banks do, a credit union is unlike any other type of financial institution. Owned and operated by the people it serves, every credit union is formed by a group of people wanting to control their own financial destiny. Bringing their money together as savings and by making low-cost loans to each other, they establish a cooperative serving its members. At the heart of a credit union are goals of placing service and members' needs above all else. Every credit union operates democratically giving each member equal voice and an equal vote. Regardless of his or her assets in a credit union, each members has an equal say in the operations and decisions made. Each member of the Board of Directors are voted in by the members/owners. And, like the Board of Directors, other volunteers (who do not get compensated for their time) also serve on committees (Credit committee, Supervisory committee, and others). Since credit unions are non-for-profit, any excess income is given back to the members in the form of better rates (deposits and loans), lower fees and better convenience (ATMs, branches, etc.). Just like a bank, depending on how large the credit union is, most credit unions can provide the same services that a bank can, even services like, commercial loans, business accounts, investment products, insurance and trusts (some of these services would be provided by a subsidiary of the credit union for regulatory reasons). Some credit unions have limited membership eligibility requirements, such as a single employer sponsor or a certain geographic area. While others have huge 'fields of membership.' One thing is certain. No matter who you are, there are several credit unions that you are eligible to join. One common qualification of membership is the 'share' account, a savings account that is your 'share' of ownership in the financial cooperative. Normally a very small minimum deposit is required to maintain membership.
