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

CREDIT UNIONS

Credit unions have members, not customers. Each person who deposits money in a credit union becomes a member of the credit union because his deposit is considered his share of the ownership. That means credit unions are member-owned. Each member is also part-owner of the credit union.

Credit unions are democratically controlled. They are run by a volunteer board of directors elected by and from the membership. Each member has one vote in electing board members and certain committees, and can run for election to the board.

Credit unions are notfor-profit. This does not mean that they do not or should not make a profit. After expenses are paid and reserves are set aside, surplus earnings are returned to members in the form of higher dividends, lower loan rates and free or low-cost services.

Jamaican credit unions are part of a worldwide support network that includes the World Council of Credit Unions, the Caribbean Confederation of Credit Unions, the Jamaica Cooperative Credit Union League and other international Leagues. They share ideas, information and resources with each other.

OTHER FINANCIAL INSTITUTIONS

Other financial institutions can serve anyone in the general public. In the case of banks, their customers have no say in how the bank is operated. Banks are owned by small groups of investors who expect a certain return on their investments. At other financial institutions, only the investors have voting privileges. Customers do not have voting rights, cannot be elected to the board, and have no authority in the overall governance of the institution. In other financial institutions, only the investors get a share of the profits. In the competitive financial market, deposit-taking institutions are very aggressive and usually reluctant to share ideas, information and resources with each other.

However, in common with other financial institutions, credit unions offer a range of financial services, sometimes utilising the opportunities provided through technology.