Credit Union Operating Principles

Democratic Structure

Open and Voluntary Membership
Membership in a credit union is voluntary and open to all within the accepted common bond of association that can make use of its services and are willing to accept the corresponding responsibilities.

Democratic Control
Credit union members enjoy equal rights to vote (one member, one vote) and participate in decisions affecting the credit union, without regard to the amount of savings or deposits or the volume of business. Voting in credit union support organizations or association may be proportional or representational, in keeping with democratic principles. The credit union is autonomous, within the framework of law and regulation, recogniing the credit union as a cooperative enterprise serving and controlled by its members. Credit union elected offices are voluntary in nature and incumbents should not receive a salary. However, credit unions may reimburse legitimate expenses incurred by elected officials.


Service to Members

Service to Members
Credit union services are directed to improve the economic and social well being of all members.

Distribution to Members
To encourage thrift through savings and thus to provide loans and other services, a fair rate of interest is paid on savings and deposits, within the capacity of the credit union.

The surplus arising out of the operations of the credit union after ensuring appropriate reserve levels and after payment of limited dividends on permanent equity capital where it exists, belongs to and benefits all members with no memer or group of members benefiting to the dettriment of others. This surplus may be distributed among members in proportion to their transactions with the credit union ass interest or patronage refunds, or directed to improve or additional services required by the members.

Building Financial Stability
A prime concern of the credit union is to build the financial strength, including adequate reserves and internal controls that will ensure continued service to membership.

Social Goals

On-going Education
Credit unions actively promote the education of their members, officers, and employees, along with the public in general, in the economic, social, democratic and mutual self-help principles of credit unions. The promotion of thrift and wise use of credit, as well as education on the rights and responsibilities of members, are essential to the dual social and economic character of credit unions in serving member needs.

Cooperation Among Cooperatives
In keeping with their philosophy aand the pooling practices of cooperatives, credit unions within their capability actively cooperate with other credit unions, cooperatives and their associations at local, national and international levels in order to best serve the interests of their members and their communities.

Social Responsibility
Continuing the ideals and beliefs of cooperative poineers, credit unions seek to bring about human and social development. Their vision of social justice extends both to the individual members and to the larger community in which they work and reside. The credit union ideal is to extend service to all who need and can use it. Every person is either a member or a potential member and apprpriately part of the credit union sphere of interest and concern. Decisions should be taken with full regard for the interest of the broader community within which the credit union and its members reside.

Source: Flier from the World Council of Credit Unions Inc.
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