In order to understand how this philosophy applies to you, it’s necessary to acknowledge that a credit union is a non-profit cooperative whose members can borrow money from pooled deposits at low interest rates. They offer the same services as other typical financial institutions such as banks. However, they are authentically different in that they believe in a people-first philosophy.
In fact, credit unions were established on the very concept of people collecting their resources in a single fund so that people could borrow them at affordable rates. These are the same principles that guide credit unions today. It becomes a means of lifting people out of their debt so that they have a chance to create opportunities for a better lifestyle.
It’s universally accepted that these institutions, including South Houston Credit Union, are prosperous even today because of their ideas and values. They claim social responsibilities, place people before profit, and aim to educate to improve lives financially. Whether you need a microloan for a car or a mortgage for your first home, the easiest way is through this cooperative.
To get a better understanding of the philosophy of a credit union, consider the following points:
More than just a customer
You’re not just a regular customer opening an account at a credit union. In reality, you become a member or owner because a credit union doesn’t have stockholders. It directly affects the perspective of the organization. Instead of focussing on generating more profit, the staff concentrates on providing better service and customer experience. And not to mention, financial guidance on various matters.
This is one of the core principles of a credit union. It shifts attention from the for-profit model that banks have to a nonprofit one. Hence, they not only share profits but they give back to the members. By doing this, credit unions build loyalty and control capital accretion.
Since credit unions are not focussed on making a profit and are managed by the people who have put money into it, they are less likely to take risks. That makes it a safer institution to invest your money in.
Care about members
You’re probably wondering about the logic behind returning an excess profit. The members can benefit in the form of bonus dividends for savers and interest refunds for borrowers. It exemplifies the cooperative and ownership structure of the organization. In fact, it’s a way of reminding the members that they are the founders of the credit union. The more you use their services, the more you’ll benefit yourself as well as fellow members.
Your goals and growth depend significantly on your foundation. Since all people are born differently, credit unions believe that everyone should be given a chance. They assist anyone and everyone in improving their financial well-being.
Dynamic unification through interdependence
For an organization that aims at giving back to its members, a credit union facilitates climbing the ladder of success with strategic planning. There is a full range of benefits, services, and resources that credit unions offer. You will notice that they have competitive lending and saving rates, a quick and straightforward loan process, and offices situated at convenient locations for easy access.
For the community
Credit unions are voluntary, non-profit organizations. They offer voluntary memberships to all members of the community, with no discrimination with respect to race, gender, nationality, politics, or religion. With this mindset, they encourage and foster a sense of bonding and association.
As an institution that deals with capital and finance, credit unions also prioritize financial education for their members. Credit unions provide training for elected representatives and employees so they can contribute effectively to the community and pursue the objectives of social justice.
Many small business and start-ups depend on several services to establish themselves within the competitive market. With the ambitions of creating more jobs, credit unions often offer more support through lending flexibility, fee-free checking services, availability of smaller loans, reducing regulatory red tape, and providing more customer friendly policies.
Strength in unity
The ideology of all credit unions is the same. Cooperation among cooperatives amplifies the long-term goals and sustainable development. It strengthens the concept of working together first locally, then nationally, and eventually internationally.
Credit unions are autonomous, but it is organized and controlled by its members. Whether you have $100 or $1 million, your voice carries equal weight in the organization. As a member, you have one vote. But you have the right to your opinions, and you have the opportunity to participate in meetings to set policies and contribute to making decisions.
This may be just the tip of the iceberg. But when it comes down to it, credit unions are organizations made by the people for the people, to let them grow and thrive and follow their dreams.