Bank Alternatives - Seven Cooperative Principles for Credit Unions
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The Banks are cutting back on credit; prices are rising and many people are feeling the crunch. Why use a bank at all? The Credit Union movement has been in existence for many years and provides a viable alternative without the agenda embraced by the banking system. Credit Unions adhere to 7 cooperative principles, These are:
• Voluntary Membership: Credit Unions are set up by volunteers who offer financial services to members who in turn accept responsibility by becoming a member. Once you join a Credit Union you will need to establish a track record by depositing money before they will consider lending you any. This insures a mutual trust and understanding builds up between member and Credit Union.
• Member Control: Banks are responsible to their boards and stockholders. Credit Unions are responsible to their members. The membership sets the policies and makes the decisions by voting during the annual meetings. As they are not in it to make profit, they can usually offer savings rates and loans at a better rate of interest than commercial institutions.
• Members are the owners: The members control the capital of the cooperative. It’s not about capital invested but by participating in the whole. If you save more money than another does in the system, you will be able to take more out of when the time arrives. Unlike banks Credit Unions are not money shops!
• Credit Unions are independent: The membership decides on the terms and conditions that are acceptable to the Union if they do business with outside sources. These democratic organizations work on the principle, of one member one vote.
• Education, Training and Information: Credit Unions train their members to run the Credit Union. Anyone who is interested in volunteering to help run the group is usually welcome. These people undertake a financial education so that they can perform their jobs adequately. The education benefits the individual, too. He is given a key to understanding finance.
• Cooperation among Cooperatives: Cooperatives are there to serve the membership and as a group the Credit Unions work together on local, state, regional, national and international levels.
• Credit Unions are about community: Although serving the membership, Credit Unions work to serve the communities in which they are situated. They focus to help people of modest means achieve their financial objectives through policies formulated by the membership that have a special emphasis and relevance to the people in the local community,
You see then that the Credit Union movement has a specific philosophy built on values of “equality, equity and mutual self-help”. They are not charities designed to bail people out in times of need. Instead they rest on a foundation of people helping each other in an equitable manner. Full benefits come as rewards not rights. You join the CU, you contribute to it and help build the cash pool and only then are you allowed to fish in it. Policies like this encourage fiscal responsibility. Isn’t it time you checked out your local Credit Union?
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