What are the responsibilities of a Credit Union?
A Credit Union is financial cooperative that is both owned and democratically controlled by the members, whose members invest their own money into the cooperative in order for it to run its operations. A Credit Unions’ operations typically involve promoting thrift, while also providing credit for its members at competitive rates, among a number of other financial services.
A large majority of credit unions are well-known within their community for providing services that help to support and further community development, because of this they are often considered community development financial institutions
How does a Credit Union operate?
To put it simply, a Credit Union is a not-for-profit cooperative organisation that is run purely by its members, these members than elect certain individuals among them to serve as the Board of Directors. The members of the Union share equal opportunities when it comes to introducing and setting policies, as well as ruling on the policies introduced by other members. All members share a portion in the control and contribution of the Union’s capital.
Credit Unions can be seen a safer and steadier alternative to investing in stocks and shares, as the money raised and earned by the Credit Union is distributed to its members in dividends, with members earnings based on the amount of their investment.
Lending
Due to the way that credit unions use the money invested in them, the members are also often identified as lenders, hence why people with money invested within a credit union are known as “member-lenders”. The combined invested assets of all the members are pooled to provide loans and other financial services to other members, and are often considered to be a competitive alternative to many banks and other institutions.
Concern for the Community
As credit unions are run as not-for-profit, they are able to provide a variety of different services are typically turned away by commercial banks and other money lending institutions due to their prior history. A few examples of his are:
- Low Income Earners
- Poor Credit History
- No Financial Security or Backing
These kinds of people, who are typically turned away as soon as they reach the doors of a typical bank, are often eligible for affordable credit. This is especially so if they apply to a Community Development Credit Union, who typically serve people who are looking for smaller loans or deposits.
Organisations such as these have a well-known history for generosity and giving both people and communities a chance at achieving financial stability, especially those that suffer from a lack of financial options and poverty. These unions additionally promote savings accounts as well as steady, non-depreciating investments in home and business investments or education, and through that access to steady income.
Service to the Credit Union
Any contributing member of a Credit Union is eligible to serve on its Board of Directors. As mentioned earlier, these members are elected to the position by their peers, and though there are many potential reasons why one would be elected to the position, they are typically selected for their established beliefs in the philosophy and policies of the credit union, as well as their prior contribution and activity. The Board of Directors in a Credit Union serve as trustees who help the union progress, keep their fellow members informed on any changes in the services the union provides and serve in an advisory capacity to the President.
AussieWeb Local Search lists a number of Credit Union outlets, so find one near you.
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