Is a Credit Union?
unions are member-owned, not-for-profit financial institutions
that provide many of the same financial services that banks
do, including checking and savings, loans, credit cards and
ATMs. However, they are uniquely different from for-profit
institutions and offer special advantages:
ownership Each member of a credit union is a part owner of that credit
union and is entitled to one vote at the annual meeting,
regardless of how much money he or she has deposited in
the credit union.
come first Because credit unions are not-for-profit cooperatives, they
are usually able to offer lower loan rates, higher savings
rates and lower fees than for-profit institutions.
services Credit unions serve their members and can offer special
services that for-profit institutions may not always offer.Examples
include small denomination signature loans under $1,000
to help members through financial difficulties, savings
clubs for kids and seniors, and financial counseling.
leadership Credit unions are led by a board of directors elected from
the membership at the annual meeting. Board members volunteer
their time and service and are not compensated.
Statement on the Mission of Credit Unions
purpose of credit unions is to promote the economic well-being
of all people, including those of modest means, through a
credit union system which is cooperative, member-owned, volunteer-directed,
not-for-profit, and therefore tax-exempt; to provide a secure
financial alternative for all consumers, and to provide financial
and related products and services to members.
unions conform to the above principles, and therefore are
not subject to income tax and must have their own unique
regulatory and share insurance system.
unions generate wealth and benefits for their members in
a number of ways, and those members incur tax obligations
as the benefits are distributed in the form of dividends.
unions include service to people of modest means in their
business activities because of the inherent dedication of
not-for-profit, cooperative financial institutions to such
service, the traditions and values of credit unions, and
the commitment of boards of directors to credit union values.
Cooperative Principles for Georgia Credit Unions
Not Just Customers By joining a credit union, people become member/owners.
Members expect more value and deserve more respect than
is available in the typical customer interaction at non-cooperative
Control Members have equal influence in the voting process and equal
opportunity to run for election to the board. One member,
one vote. Once elected, directors have fiduciary responsibility
to all members.
Differentiates Democratic control provides a decision-making environment
that elevates creating value for the members above profit
accumulation at the credit union. It is the dedication to
providing service that differentiates credit unions from
Belong to the Members In order to grow and provide new services, credit unions
generate capital by retaining a portion of earnings. These
retained earnings are used for the betterment of the entire
of Credit Unions
Credit unions are either federally or state chartered. Credit
unions vary greatly in size, structure and services. Small
credit unions may offer basic savings and loans. Larger credit
unions may offer checking, credit and debit cards, ATM cards,
IRAs and certificates of deposit, and may have several branch
locations. There are three types of credit unions:
common bond credit unions (occupation and associational)
such as Savannah Schools FCU in Savannah or Georgia Methodist
FCU in Atlanta.
common bond credit unions (more than one group each
having a common bond of occupation or association) such
as Associated CU in Atlanta or TIC FCU in Columbus.
credit unions serve residents of a particular area or
community such as CSRA FCU in Augusta or Coosa Valley FCU
of Credit Unions
National Credit Union Share Insurance Fund (NCUSIF) was created
by Congress to insure members' deposits in credit unions up
to the $250,000 federal limit. Administered by the National
Credit Union Administration, the NCUSIF is backed by the "full
faith and credit" of the U.S. Government. The NCUSIF maintains
at or near 1.30% of federally insured credit union deposits.
By law, federally insured credit unions maintain 1% of their
deposits in the NCUSIF. Credit unions voluntarily capitalized
the Fund in 1985 by depositing 1% of their deposits into the
Fund. No federal tax dollars have ever been placed in the
NCUSIF and no member has ever lost money insured by the fund.
a Credit Union
unions are formed when a group of people work together to
develop a common bond or "Field of Membership," such as occupation,
association or interest, or residence within a well-defined
community. The group then selects a Board of Directors, forms
committees, and develops a business plan. The plan is submitted,
either to NCUA or the GA Dept. of Banking and Finance for
review and approval. Most credit unions, in recent history,
have been formed through sponsorship by a company for its
employees or through faith-based organizations such as churches.
of Credit Unions
The first credit unions were founded in Germany in the 1840s
to provide savings and borrowing opportunities to working-class
people. The guiding principles were simple:
people who were credit union members could borrow there.
should be for prudent and productive purposes.
- A person's
desire to repay (character) would be considered as important
as a person's ability to repay (income).
principles still govern most of the credit unions in the world
Georgia, the credit union movement started when Edward A.
Filene, a Boston merchant, visited Atlanta in 1922 and persuasively
explained the need for credit unions. Later that year, Atlanta
attorney E. Marvin Underwood drafted a state credit union
bill, which was introduced in the Georgia General Assembly that
year and each following year until it was passed in 1925.
Credit Union Affiliates is the
state trade association serving Georgia's credit unions.
The Affiliates is a not-for-profit organization, governed
by volunteer directors who are elected by their credit union
peers. The organization represents 80% of Georgia's credit
unions. The primary support organizations of the Affiliates
include: Georgia Credit Union League, Cooperative Services,
Inc. and Georgia Corporate Federal Credit Union. Mike Mercer is CEO
and president of Georgia Credit Union Affiliates. It is
based in Duluth, GA.
Affiliates provides a range of services to credit unions
in Georgia. Advocacy is the primary responsibility of the
Georgia Credit Union Affiliates representing the
interests of Georgia's credit unions before legislators
and regulatory agencies that govern credit union operations.
In addition, the Affiliates works with credit unions to
provide compliance information, education and business development
assistance to member credit unions. Assistance is also provided
to consumers who are looking to join a credit union or form
a new one.
Credit Union Affiliates
6705 Sugarloaf Parkway, Suite 200
Duluth, GA 30097