personal finance | all about credit unions and banking services by @phroogal
DESCRIPTION
A complete guide to everything credit union from history, founding principles, products and services to locating and joining the right credit union.TRANSCRIPT
All About Credit Unions and Banking Services
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Personal Finance
Introduction
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• Learn about the products/services offered and benefits.
• Understand the difference between credit unions and banks.
• Locate a credit union to join.• Know where to find credit unions
branches and ATMs.
Did you know?
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Credit Union Act signed in 1934 by President Franklin
Roosevelt to “promote thrift and thwart usury.”
Timeline
1849 the first credit union model was started in Germany.
1909 the first US credit union, St. Mary’s Cooperative Association was establish in Manchester, NH.
1934 President Roosevelt signed into law the FCU Act which established federally chartered credit unions in all states.
1970 the NCUA, National Credit Union Administration is formed to supervise credit unions.
1985 the NCUSIF, National Credit Union Share Insurance Fund is backed by the “full faith and credit of the United States Government.”
What we hear about money?
The History of Credit Unions
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Source: NCUA
What we hear about money?
How common are credit unions?
• 6,800 credit unions nationwide
• Over 100 million members
• Holds over $1 trillion in assets
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Source: The Washington Post
“Not for profit, not for charity but for service.”
What is a credit union?
• are not-for-profit organizations• require membership eligibility• serve members rather than to maximize
corporate profits• accept deposits and make loans • offer savings and loans at reasonable rates• return surplus income to their members in
the form of dividends• regulated by the NCUA a federal agency
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Why are credit unions not-for-profit?
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• exempt from federal taxes but pay other types of taxes.
• required to invest earnings back into the organization.
In 1934, Congress passed the Federal Credit Union Act and in it the words, "Federal credit unions and their income shall be exempt from all taxation." It's this tax exemption that requires credit unions to be
not-for-profit institutions.
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What types of credit unions exist?
• Local – Usually known as community credit unions, local credit unions serve individuals within a specified community. You must live, work or worship in a particular area in order to join a community credit union.
• Group - Your affiliation with a particular association can make you eligible to join. These group focused credit unions include military, church groups, alumni associations, or service organizations.
• Employer - The credit unions that fall in this category serve a particular company or group of companies. You must be a current employee of a company to join, belong to a organized union (e.g. teachers, police officers, government workers etc) or in some cases retired from a company.
• Federal - These credit unions serve a larger group of individuals and joining one doesn’t have as many limitations as the others described. Most credit unions that fall into this category serve a national audience.
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What’s the difference?
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What we hear about money?
Benefits of Belonging
• Higher interest rates on deposits• Low or no minimum balances for deposit
accounts• Low or no fees on savings and checking
accounts• Lower interest rates on loans and credit
cards.• Profits shared in the form of dividends• Multi-generational accounts• A focus on financial education
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*Ask your credit union for specific benefits, products and services.
What banking services are offered?
• Deposit accounts– Savings accounts (called share accounts)– Checking accounts (called share draft accounts)– Money Market accounts– Certificates (CDs) also known as share certificates– Club accounts (such as vacation, holiday or tax)– Individual Retirement Accounts (IRA)
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Are my deposits federally insured?
• Deposits at federally insured credit unions are insured up to $250,000 per individual depositor.
• National Credit Union Administration (NCUA) is the independent agency that administers the National Credit Union Share Insurance Fund (NCUSIF).
• Like the FDIC's Deposit Insurance Fund, the NCUSIF is a federal insurance fund backed by the full faith and credit of the United States government.
• Federally insured credit unions must prominently display the official NCUA insurance sign at all locations accepting deposits and on their websites.
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NCUA Share Insurance Estimator – Calculate - http://www.mycreditunion.gov/estimator
What loans are offered?
• Consumer loans– Personal loans and lines of credit– Student loans and lines of credit– Debt consolidation loans
• Auto loans– New/used and refinance loans
• Boat/Recreational Vehicle loans• Home loans
– Mortgage – Rental and Vacation homes– Home Equity loans and lines of credit
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Are CU credit cards a better choice?
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Some features of credit union credit cards include:• Pay less with lower interest rates and lower fees. • No penalty APR. Many credit unions do not set a penalty APR on
their credit cards in the event you miss a payment. • Same APR for purchases and cash advances. Draw on your
credit card and transfer funds into other accounts.• Access to cash via ATM. • Lower or no fees for balance transfers.• Overdraft protection. Many CUs let you connect your credit card
to your checking account to avoid overdraft charges.
*Ask your credit union for specific benefits of using their credit cards.
Find a credit union credit card - http://www.creditcardconnection.org
What additional services are offered?
• Credit unions offer additional services through CUSOs (Credit Union Service Organizations).
• CUSOs are corporate entities owned jointly by several credit unions to provide services they are unable to provide individually such as: – Mortgages– Investment and Brokerage Services– Insurance Plans– Tax Preparation– Student Loans– Financial Counseling– Business Loans
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Credit unions are convenient.
What we hear about money?
How to access accounts and services?
Services• Direct Deposit• Check cashing• Wire transfers• Online bill
payments• Mobile deposits• Email/text alerts
Access• Online banking• Mobile apps• ATM/Debit cards
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What we hear about money?
Shared Branches and ATM Access
oo*Ask your credit union about shared branches and ATM access.
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Shared Branches• a national network of credit unions around the country that share
facilities• give members access to over 5,000 convenient locations• perform transactions as if you were at your credit union
Surcharge-free ATMs• use of ATMs without incurring a fee from ATM owner• credit unions who are part of CO-OP network offer access to over
30,000 surcharge-free ATMs• access up-to 65,000 surcharge free ATMs with additional networks
CO-OP - http://co-opatm.org/CU24 - https://www.cu24.com/atmlocator/AllPoint - http://www.allpointnetwork.com/atm-locators.aspx
CO-OP Shared Branch – http://sharedbranching.org
“Once a member, always a member.”
How to Find and Join a Credit Union
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You’re eligible to join a credit union if you belong to an organization, association or work for an employer, live/work/worship in a particular area. Having a family member who holds credit union membership is another way to be eligible for credit union membership.
• Ask a family member, employer, human resource manager, group leader or pastor.
• Search online to find and join a credit union.
MyCreditUnion.gov – http://www.mycreditunion.govaSmarterChoice.org – http://www.asmarterchoice.org
Important Credit Union Related Websites
• All Things Credit Union – www.allthingscreditunion.org• Find a credit union – www.asmarterchoice.org• Find a shared branch – www.sharedbranching.org• Find a surcharge-free CO-OP ATM – www.co-opcreditunions.org• Find a credit union credit card – www.creditcardconnection.org• Find student loans – www.cuStudentLoans.org/phroogal• Government Resources
– MyCreditUnion.gov – www.mycreditunion.gov– NCUA – www.NCUA.gov– Share Insurance Estimator – www.mycreditunion.gov/estimator
• Credit union discounts – www.lovemycreditunion.org• Financial calculators – www.culookup.com/calculators• Financial Education
– Balance Financial Fitness Program – www.balancepro.org
• Movement and Initiatives– Don’t Tax My Credit Union - www.donttaxmycreditunion.org– Credit Union for Kids – www.cu4kids.org– Credit Unions Around the World - www.woccu.org
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Are Credit Unions better than banks?
(Yes or No)
Phroogal Answer
• Have a credit union as part of your financial portfolio.
• Include credit unions when comparing banking products and loans for lower fees and better interest rates.
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Note: Although credit unions share a fundamental belief in people helping people, not all credit unions are equal nor operate the same. Always do your research, ask questions and decide on the best credit union that meets your financial needs.
