MADISON, Wis. (12/9/11)--This holiday season, many members will get something extra from the credit union--in the form of a year-end rebate on loans or dividends on their deposits, one of the benefits of being a member/owner of a credit union.
Announcements by several credit unions recently have underscored that credit unions return excess proceeds to their member owners--something that for-profit financial institutions don't do. With the economy still struggling, and consumers feeling pinched, credit unions know that this year, giving something back will mean even more. Even credit unions that have tighter margins than usual this year make an effort to give back.
A good example is MECU of Baltimore (Md.) Inc. The more than $1.1 billion asset credit union, which has more than 99,000 members, paid its members a loan interest rebate of nearly $1.14 million--about 6% of the interest they paid on their loans between June 25 and Nov. 30. It also will pay members an extraordinary dividend on deposit accounts at the end of December. The rebate is in addition to more than $2 million cash bonus paid its members in June. By the end of year, the MECU will have paid members more than $4 million in cash bonuses.
MECU has a long tradition of the cash bonus, which began in 1981. In 2008, at the high of the nation's financial crisis, MECU's board decided to pay half the cash bonus at the end of June and the remainder at the end of December to help members dealing with financial issues from the recession. It expects to give the second half of the cash bonus in December.
Other recent examples include.
- Guardian CU, a $208 million asset credit union in Montgomery, Ala., announced it will give members more than $750,000 in interest rebates and dividend bonuses. About 23,000 members received money back this week, with one individual receiving as much as $3,100. Guardian said the move is a way to say thank you for members' relationships and business over the past year; to give back to members who helped it have a prosperous year; and to help improve members' financial well-being throughout the year. "This 'give back' should also have a significant effect on the community and local businesses," said the credit union's press release, because people "have more than $100 extra to spend right here in the River Region this Christmas."
- Wright-Patt CU, based in Fairborn, Ohio, will pay $5 million in special patronage dividends to more than 210,000 of its 215,000 members. The amount, which is $1 million more than last year, will be distributed Jan. 4, the $2 billion credit union said. Since 2008, it has distributed $16 million in excess earnings to members. "Paying a patronage dividend is great for our members, but our top priority has always been and will continue to be keeping our members' money safe," said Doug Fecher, CEO (Dayton Business Journal Dec. 1).
- GCS FCU, a $298 million asset credit union based in Granite City, Ill., paid out a bonus dividend last month of 0.25% added to the current share rate to its members share savings accounts, according to its website. Dividends paid so far this year total more than $2.5 million.
- Omni Community CU, a $270 million asset credit union based in Battle Creek, Mich., announced its Cashback Rebate program as a way to say "Thank you for making us your financial institution," according to its website. It has paid $3.2 million to members since 2008. This year members will receive 0.05% to 0.40% on all 2011 average yearly loan and account balances for 2011. Members must be a member as of Nov. 15 and maintain an active account through Jan. 13, 2012. Members will receive their rebate in their savings account on Jan. 13.