Who Owns Your Credit Union?
The next time you visit your local SCCU branch, look around and take pride in the fact that you own the place. That's right, saving at and borrowing from the credit union means that you are a member AND an owner, not just merely a customer, as with other financial institutions. A credit union is like a bank, in that they both offer similar financial services. However, they are vastly different in their organizational structure. The major difference is about ownership.
From their beginning, credit unions have been unique among financial institutions. Founded on the basic principle of "people helping people," credit cooperatives began forming in the United States in the early 1900s. They were created in response to a common lending practice at the time known as loan sharking. Since banks were reluctant to lend money to people with little or limited income and/or assets, it was difficult or impossible for the average working person to obtain credit (loans) from banks. In desperation, people borrowed from greedy loan sharks. Loan sharks gave people the money they needed, for example, to fix up their houses, buy supplies or pay bills. But, they charged outrageous interest-sometimes as high as 3000%!
The credit union movement grew out of a simple idea of a "not-for-profit" business cooperative, owned by people who, together, pool their funds so the cooperative can provide loans and other financial services to each other. Since credit unions, unlike banks, are not driven by the need to generate profits for stockholders, they are able to offer members higher savings rates, lower loan rates and fewer and lower fees.
Additionally, each adult member in good standing-regardless of how much money he or she has on deposit-can vote to choose fellow members to serve on the Board of Directors or they themselves can serve in any elected position or on a committee. This power gives members control over credit union policies and actions. Contrast that to banks, where the biggest stockholders carry the most clout in selecting the Board.
Since their beginning, credit unions have helped to improve the finances of millions of Americans. Today, more than 80 million Americans can claim ownership in the nation's 11,000 credit unions.
Space Coast Credit Union
Space Coast Credit Union (SCCU) was chartered in 1951 as Patrick Air Force Base Credit Union. It was started by civil service employees to serve as a savings institution and create a source of credit for the military personnel stationed at Patrick Air Force Base. It began with 28 members and $372 in assets. Today, SCCU serves more than 120,000 members and has over $1 billion in assets. It is the largest locally based financial institution in Brevard County, Florida, but its values have remained the same. Guided by the credit union philosophy of "not for profit, not for charity, but for service," SCCU has continuously sought out opportunities to build value in cooperative ownership.
The Credit Union Difference
Want to learn more about credit unions and how they are different? Access this informative link. And thank you for belonging to SCCU's member-owned financial cooperative.
Source: Credit Union National Association
The information on this page is for educational purposes only. SCCU is not engaged in providing estate planning or other advice. Please consult with a competent estate planning professional regarding any specific estate planning questions.