Cooperatives: Credit Unions
Historically when credit unions were formed in Germany in the 1800’s, the intent was to fill a need for the underserved and poor. Credit unions originated because banks were reluctant to lend money to certain individuals or groups. Those underserved consumers pooled their resources and formed cooperatives which are owned by their members. This afforded cooperatives better known as credit unions, to be classified as not-for-profit, which means that they are not subject to corporate income taxes.
Cooperatives were formed to give the working class affordable access to credit. One of the most notable characteristics of credit unions is that they are focused on service rather than profitability. Credit unions limit their offerings to a …show more content…
Their “About Us” section is divided into additional subsections such as “Volunteer Leadership,” “The Credit Union Difference,” “Facts and Financials,” and “History.” The “Facts and Financials” subsection is important because it fully discloses financials that not only help determine whether the organization meets the present and future needs of a member, this information is also required by federal law. Credit Unions must retain a higher percentage of capital to protect members' savings, weather tough economic times and fund the ability to grow and better serve members than their traditional bank counterparts.
Funds held in the various investments at a credit unit are referred to as ‘shares’ and are treated as an ownership interest. That being said, each member has one vote, no matter how much his or her deposit is and each member has the right to vote on decisions affecting the credit union.
People who become members of a credit union enjoy the same types of products as those who use traditional banks (i.e., online bill pay, ATM cards, mortgage and automobile loans, insurance and retirement investments). The greatest benefit of being a credit union member is access to credit at lower interest rates than banks. America First Credit Union’s website appears to not only reflect its mission statement, but makes every attempt to further define them as an organization who is concerned
Cooperatives were formed to give the working class affordable access to credit. One of the most notable characteristics of credit unions is that they are focused on service rather than profitability. Credit unions limit their offerings to a …show more content…
Their “About Us” section is divided into additional subsections such as “Volunteer Leadership,” “The Credit Union Difference,” “Facts and Financials,” and “History.” The “Facts and Financials” subsection is important because it fully discloses financials that not only help determine whether the organization meets the present and future needs of a member, this information is also required by federal law. Credit Unions must retain a higher percentage of capital to protect members' savings, weather tough economic times and fund the ability to grow and better serve members than their traditional bank counterparts.
Funds held in the various investments at a credit unit are referred to as ‘shares’ and are treated as an ownership interest. That being said, each member has one vote, no matter how much his or her deposit is and each member has the right to vote on decisions affecting the credit union.
People who become members of a credit union enjoy the same types of products as those who use traditional banks (i.e., online bill pay, ATM cards, mortgage and automobile loans, insurance and retirement investments). The greatest benefit of being a credit union member is access to credit at lower interest rates than banks. America First Credit Union’s website appears to not only reflect its mission statement, but makes every attempt to further define them as an organization who is concerned