FRE­QUENTLY ASKED QUES­TIONS ABOUT CREDIT UNIONS

Daily Observer (Jamaica) - - INTERNATIO­NAL -

1. What is a credit union?

A credit union is a fi­nan­cial co-op­er­a­tive or­ga­nize for the sole pur­pose of pro­vid­ing ser­vice to mem­bers.

2. What is the dif­fer­ence be­tween credit unions and other fi­nan­cial in­sti­tu­tions?

a. The dif­fer­ence is in the struc­ture. Other fi­nan­cial in­sti­tu­tions are owned by stock­hold­ers who seek to profit from their in­vest­ment in the or­ga­ni­za­tion. Credit unions are owned co-op­er­a­tively by all of their mem­bers with­out re­gard to the amount of money that a mem­ber has in the credit union. b. Credit unions are di­rected by a Board which is a group of vol­un­teers se­lected from within the mem­ber­ship. Credit Unions re­turn prof­its to their mem­bers in the form of div­i­dends, com­pet­i­tive loans rates and ser­vices. c. Credit unions do busi­ness with their mem­bers only.

3. Who reg­u­lates credit unions?

Cur­rently credit unions are reg­u­lated by the Depart­ment of Co-op­er­a­tives & Friendly So­ci­eties on be­half of the Gov­ern­ment of Ja­maica. .In the near fu­ture credit unions will be reg­u­lated by the Bank of Ja­maica. The League as the na­tional as­so­ci­a­tion for credit unions will con­tinue to serve credit unions as man­dated by the mem­bers.

4. How does a credit union op­er­ate?

A credit union ac­cepts de­posits from its mem­bers and of­fers to them a range of fi­nan­cial ser­vices. Mem­bers elect a board of di­rec­tors at their an­nual gen­eral meet­ing. The board in turn em­ploys a gen­eral man­ager to man­age the day-to-day op­er­a­tions of the credit union. Credit Union mem­bers may be elected to serve on com­mit­tees in the credit union.

5. How does a per­son ben­e­fit from be­ing a credit union mem­ber?

• A credit union mem­ber is a co-owner of the credit union. • Each mem­ber has equal vot­ing power, (one vote), the same as all other mem­bers in the credit union ir­re­spec­tive of the amount of his sav­ings. • Each mem­ber has the power to ex­er­cise his/her demo­cratic right in de­ter­min­ing by whom and how the credit union is run. • A credit union mem­ber shares in any an­nual sur­plus... • Credit unions now of­fer a range of fi­nan­cial ser­vices, in some in­stances the same as those avail­able in other fi­nan­cial in­sti­tu­tions. • Mem­bers can de­ter­mine the type of fi­nan­cial ser­vices the credit union should pro­vide • Mem­bers are helped to save through the habit of thrift that is en­cour­aged by credit unions. • Mem­bers can save di­rectly and trans­act busi­ness at their credit unions through salary de­duc­tion fa­cil­i­ties.

6. How can I find a credit union to join?

Each credit union can serve only those peo­ple who are el­i­gi­ble for mem­ber­ship. You are el­i­gi­ble for mem­ber­ship in one or more credit unions based on where you or your fam­ily mem­bers live, work or wor­ship. This is re­ferred to as the “Com­mon Bond.”

7. Does age mat­ter when a per­son wants to join a credit union?

A per­son has to be at least 16 years of age to be­come a mem­ber. But per­sons un­der 16 years of age can still save with the credit union in spe­cially de­signed youth sav­ings prod­ucts.

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