What is a Credit Union
A Credit Union is a group of people, connected by a 'common bond' based on the area they live in, the occupation they work in, or the employer they work for, who save together and lend to each other at a fair and reasonable rate of interest. Credit Unions offer members the chance to have control over their own finances by making their own savings work for them. Every Credit Union is owned by its members — the people who save with it and borrow from it.
Credit Unions exist only to serve members — not to profit from their needs. Surplus income generated is returned to the members by way of a dividend and/or is directed to improved or additional services for members. Members' savings are used to fund loans to other credit-worthy members of the Credit Union. So, the money in a Credit Union always remains in the local community or 'common bond' that the Credit Union serves.
What are the objectives of a Credit Union?
To encourage members to save. To provide low cost loans for members.
To provide life insurance for eligible members at no extra cost to individual members.
What are Credit Union Operating Principles?
Credit Unions are unique, are unlike every other financial institution in their purpose, their governing rules, and the service they provide. Key differences include:
Credit Unions do not and cannot (by law) speculate with members' money.
What about security and confidentiality?
- Credit Unions do not want, and cannot have, big deposits.
- Credit Unions can only lend for provident and productive purposes.
- Credit Unions only lend to their members, who must be saving regularly to be eligible for a loan.
- The savings and loans of our Credit Union members are insured (up to generous limits) at no extra cost to the individual member.
In order to protect the interests and secure the operation of the Credit Union, this Credit Union carries a Fidelity Bond for all staff and volunteers. All League affiliated Credit Unions are members of the Savings Protection Scheme which gives protection to members' funds. The savings of members of Credit Unions in Northern Ireland which are affiliated to the Irish League of Credit Unions (ILCU) is protected by the ILCU's Savings Protection Scheme (SPS) at the discretion of the Administration Committee of the ILCU Board. Currently the SPS fund stands at over £88 million. In addition to this, credit unions in Northern Ireland have reserves of £107 million (12.4% of total assets) which are there to act as a first line of defence should the need arise. All Directors, Staff and Volunteers of Termonmaguirk Credit Union Limited sign a Confidentiality Pledge annually ensuring all members' transactions are completely confidential.