Credit Unions: Leading the Way

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Credit Unions Leading the Way
Not for profit, not for charity, but for service
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You Will Know

• Major types of insured financial institutions
• Basic terms
• Differences between credit unions, banks, thrifts
  and check-cashing services
• Types of accounts
• Types of services

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Insured Financial Institutions

• Banks
• Credit Unions
• Thrifts

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What is a Bank?

• For-profit financial institution
• Owned by a group of people called stockholders
• Profits after expenses are returned to
  stockholders
• Business strategy is to maximize profits for
  owners.

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Whats a Credit Union?

• Not-for-profit financial cooperative
• Owned by its members
• Profits are shared with the members in the form
  of lower rates on loans and higher rates on
  savings
• Member service is the primary business philosophy
• Serve a defined field of membership

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What is a Thrift?

• For-profit financial institution
• Used to be called savings loan (S L)
• Primary business is home mortgages
• Many thrifts have converted to banks in recent
  years.

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Other Businesses(not financial institutions)

• Check Cashing Service
• Charges high fees for cashing checks
• Pay Day Lenders
• Very high interest rate loans

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Keep Your Money in An Insured Account

• Safety
• Convenience
• Cost
• Security
• Financial Future

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• Insures deposits in credit unions
• Backed by federal government
• Not one dollar of taxpayer money has been used to
  create or maintain the credit unions share
  insurance fund.
• The NCUA Share Insurance Fund is the strongest of
  its kind.
• All Michigan CUs are insured by NCUA

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Brief History of Credit Unions

• First Credit Union organized in Germany in
  1840s.
• First U.S. credit union was St. Marys Parish
  C.U. of Manchester, New Hampshire, organized in
  1908.
• Financial Health Credit Union was organized in
  1936.
• Purpose Formed by ordinary working people
  coming together to help each other prosper.

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Credit Unions Promote Economic Development

• Committed to fostering economic development
  helping individuals attain self-sufficiency in
  America the world
• CUs in 93 countries are a stabilizing force that
  gives diverse peoples the opportunity to practice
  democracy within a member-owned organization.

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National Credit Union Foundation (NCUF)

• Providing a pathway to consumer financial
  independence
• Supporting 3 key components
• Access NCUF funds projects that provide access
  to quality, affordable financial services for
  under-serviced groups
• Financial Literacy Education Funds programs
  that improve the financial literacy of consumers
  through education
• Asset Accumulation Funds a range of activities
  that provide direct impact on a consumers asset
  accumulation, from a basic savings account to a
  first-time home purchase.

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Share/Deposit Accounts
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Deposit

• A deposit is money you add to your account using
  a deposit slip.
• You can also deposit money electronically through
  direct deposit of payroll, pension, or a
  government check.

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Share

• At a credit union, the money in your account is
  an investment, represented by shares.
• Sometimes your account is called a share account.

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Balance

• Balance is the amount of money you have in your
  account.

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Withdrawal

• Withdrawal is the process of taking money from
  your account using
• Checks
• Withdrawal slips for cash
• ATMs/Debit Cards
• Electronic withdrawals

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Fees

• A fee is when a financial institution takes money
  out of your account. Examples,
• Service Fee
• monthly maintenance fee
• Penalty
• bouncing a check

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Interest

• Interest is extra money in your account that you
  receive for keeping your money in a financial
  institution.

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Dividend

• At a credit union, you earn dividends on your
  shares.
• IRA deposits and certificates of deposit (CDs)
  pay interest.

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Accounts

• Savings/Share Account
• Your basic (membership) account, designed for
  the purpose of safeguarding and accumulating
  money.
• Checking Account/Share Draft
• An account that lets you write checks to pay
  bills or buy goods.

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ATM

• An ATM (automatic teller machine) can be used 24
  hours a day to
• Deposit checks only
• Withdraw available cash
• Transfer money

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Debit Card

• A debit card is a plastic card that
• Is used to pay for goods or services
• Deducts funds electronically from your account
  at time of transaction
• Has a MasterCard or Visa logo

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Direct Deposit

• Direct deposit is one way of receiving your
  paycheck or benefit check electronically.

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Loans

• A loan is money you borrow from a financial
  institution with a written contract to pay it
  back later.

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Money Order

• A money order is similar to a check. It is used
  to
• Pay bills
• Make purchases

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Automated Telephone Banking

• Audio response services allow
• you to
• Check your account
• Transfer money
• Obtain account history
• Stop payment on a check
• Obtain branch hours
• Report a lost, stolen or damaged card

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On-Line Financial Transactions

• On-line banking or home banking allows access to
  your account from your computer terminal.
• Check balances, balance your checkbook.
• Make loan payments
• Pay bills on line

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Thanks for Participating!!!

• You have completed the 1st step toward having a
  sound financial future!!
• Please fill out the Course Evaluation form
• The Take Home Guide is yours to keep for future
  reference
• If you have further questions or concerns, call
  517-319-1300.