How are Credit Unions Different?
Credit unions are distinctly different to other financial institutions for a number of reasons. Each credit union is an independent, not-for-profit organisation that exists solely for the benefit of its members, not stockmarkets. Credit unions have members, not customers, and membership is open to people who have a unique ‘common bond’ with other members of the credit union. This can be based on the area the members live in, the occupation they work in, or the employer they work for.
Credit unions offer a face to face customer experience at a time when other financial institiutions are moving away from physically meeting customers. This is reflected in credit unions being named as the organisations offering the best customer experience in Ireland for three consecutive years by CX Ireland. Credit unions have also been named as the most reputable organisations in the country by the Ireland RepTrak® 2018 Study.
In summary credit unions are different because:
- They are not-for-profit democratic financial cooperatives owned by all of their members. Every member over 16 has a vote at their local credit union AGM.
- Any surplus income is used to develop new and existing services or it is distributed among members in the form of dividends to savers or interest rebates to borrowers.
- Credit unions do not charge administration or transaction fees.
- Loans and savings are insured at no direct cost to an eligible member. Loans are insured by the credit union’s own policy at no direct cost to members. This is designed to pay off a loan in the event of a borrower’s death – subject to terms, conditions and eligibility criteria.
- They offer flexibility regarding loan repayments - a loan can be paid back earlier without any penalties or it can be restructured if there is a change in a borrower's circumstances.
- "Nomination" of accounts. This is a unique facility for credit union members. Credit unions have a nomination facility whereby members over 16 years of age can nominate who is to receive the property of their accounts with the credit union upon death. Having a nomination means that your property left in the credit union (up to a maximum of €23,000 in Republic of Ireland or £10,000 in Northern Ireland) will not have to pass through the sometimes timely probate or intestacy process. Any amount in excess of €23,000/£10,000 will form part of your estate.
- Credit unions are committed to their local communities and provide support to local youth initiatives, charities, sporting clubs and cultural events.