Credit Unions: Leading the Way

1. Credit Unions: Leading the Way “Not for profit, not for charity, but for service”

2. 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

3. Insured Financial Institutions • Banks • Credit Unions • Thrifts

4. 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.

5. What’s 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

6. 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.

7. Other Businesses(not financial institutions) • Check Cashing Service: • Charges high fees for cashing checks • Pay Day Lenders: • Very high interest rate loans

8. Keep Your Money in An Insured Account • Safety • Convenience • Cost • Security • Financial Future

9. 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

10. Brief History of Credit Unions • First Credit Union organized in Germany in 1840’s. • First U.S. credit union was St. Mary’s 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.

11. Credit Unions: Promote Economic Development • Committed to fostering economic development & helping individuals attain self-sufficiency in America & the world • CU’s in 93 countries are a stabilizing force that gives diverse peoples the opportunity to practice democracy within a member-owned organization.

12. 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.

13. Share/Deposit Accounts

14. 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.

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

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

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

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

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

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

21. 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.

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

23. 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

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

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

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

27. 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

28. 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

29. 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.