Why people at credit unions are called members, not customers
Credit unions are different.
Try to think of any industry - much less a financial institution - that can get thousands of people to post tens of thousands of messages on a single day to express how much they like a place they do business with. That's what happened July 29, 2022, as credit union members from around the country and world posted messages, videos, and photos on social media to shout out why #ILoveMyCreditUnion.
It was the second annual social media blitz to celebrate credit unions and the good they do for their communities and members.
Why are people at credit unions called members? Because they are more than just customers.
When someone joins a credit union, they become an owner of the not-for-profit financial cooperative. Credit unions operate much like a bank, with checking and saving accounts, car loans, mortgages, credit cards, bill pay and mobile apps.
The big benefit of being owner is that profits generated by the credit union are used to keep loan rates low, savings rates high and have fewer and lower fees. This is especially important as our volatile economic environment keeps pushing the costs of almost everything higher, including the cost of borrowing.
Interest rates on every type of loan, especially mortgages, have jumped a lot recently and they are expected to continue to rise through the rest of the year to combat inflation. That's why the ownership structure and mission of credit unions - people helping people - is so important to help improve the financial lives of their members.
Another credit union difference is how they are community-based financial institutions. Most of the 217 credit unions in Illinois only do business in this state, so they have a special focus on serving the people in their community; and it's not just through better rates and lower fees.
Credit unions follow cooperative principles, including concern for the local areas and groups they serve through charitable giving and volunteering. A great example of this is when more than 80 credit unions of Illinois participated on Oct. 10 in an annual day of community giving called CU Kind Day.
The Illinois Credit Union League, the state association for credit unions, hosted the initiative to spread kindness through donations of time and money to make positive impacts on local, national, and global communities. Over the past four years, credit unions have donated thousands of hours and more than $225,000 to community organizations as part of CU Kind Day.
Acts of kindness around the state included providing free lunches to police and fire station first responders, donating to and volunteering at food banks, collecting funds for an animal shelter, delivering handmade cards to a senior center, assembling care packages and hygiene kits for a women's shelter, giving credit union staff money to donate to the charity of their choice, donating to the United Way and Children's Miracle Network hospitals and much more.
Giving to the communities they serve has been a critical part of the credit union purpose since their founding more than 100 years ago to deal with the challenge of banks that would not lend to certain groups of people.
From the very humble beginnings in the basement of churches, factory floors and kitchen tables in homes, credit unions now serve more than 130 million members in the United States and many more millions around the world. How can you become a member and benefit from the credit union difference?
Check out https://www.yourmoneyfurther.com/ to find a credit union you can join.
• Tom Kane is the President of the Illinois Credit Union League, the state trade association for credit unions.