Credit Unions Talk Funny

Credit unions offer many of the same services you find at other financial institutions, but sometimes use different words to describe familiar activities. You don’t have to learn a new language to be a Caribe Federal Credit Union member, we know what you mean no matter what terms you use  but you might like to know why credit unions “talk funny.” It’s all part of what makes credit unions significantly different from other financial service providers.

Your credit union savings represent your “share” in the financial cooperative, which is what a credit union is. Thus, you have a share savings account, or, for a fixed-term account, a share certificate account and if you have an account you use, for example, to pay bills and finance daily recreation, you have a share draft account, so named because you’re able to draw on your shares. In all respects, these accounts work the same way savings, certificate of deposit, and checking accounts work at other institutions.

The only difference is that credit union accounts have important benefits for members: Fees you pay to use the accounts typically are lower, and dividends you earn on the accounts often are higher than at other financial institutions. Dividends are the share of earnings Caribe Federal Credit Union distributes to shareholders members.

Fees and borrowing rates are lower, and savings rates higher, because credit unions are not-for-profit financial cooperatives. Profit-driven financial institutions like banks must make money to pay stockholders in proportion to their holdings. All credit union members benefit from the credit union’s financial success, but bank income bypasses customers to pay a limited number of stockholders.

Members ultimately have responsibility for credit union operations because they elect qualified volunteers from among the membership. These unpaid volunteers, called directors, hire the professional manager or chief executive officer to oversee daily credit union operations and plan for future services and financial management. Banks, saving and loans pay their board members, providing motivation for them to make decisions based on financial gain for themselves and stockholders, not for customers.

Your credit union shares are backed by share insurance up to $250,000. Caribe Federal Credit Union undergoes rigorous examination by the National Credit Union Association to assure sound operation and management. Caribe Federal Credit Union received its operating charter, permission to do business and the rules it must observe from National Credit Union administration, in 1951.

The directors and management comply with the charter and also with the credit union’s own bylaws. These are rules that members and directors adopt to define the credit union’s field of membership, set the par value of shares and describe common credit union functions.

Now that we’re all speaking the same language, call or stop by any of our branches for information about membership or financial services on your terms, of course!