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Credit Unions Pay Back Dividends/Rebates To Members

Credit Unions Pay Back Dividends/Rebates To Members By Gina Ragusa
Published December 26, 2012
Credit Unions Online
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Santa added a little something to thousands of members’ stockings in 2012--extra dividends/rebates from their credit union.

At least a handful of the nation’s credit unions paid extra capital back to its members, which unfortunately has not been a common occurrence since the economy tanked in 2008. However, for those who belong to the group of credit unions that paid year-end dividends and rebates, the holidays were a little brighter.

Dividend/rebate payouts ranged from fifty bucks to thousands per member. Payouts are typically based on the member’s total deposit and loan relationship with the credit union.

Earlier this month CEFCU ($4.8 billion, Peoria, IL) announced the credit union would pay a record $9 million in year end dividends to members this year.

“I’m proud to say that after 75 years, the credit union not-for-profit business model of borrowers and savers helping each other is still alive today,” said Mark Spenny, CEFCU President/CEO. “As a result, those members who borrowed and saved with CEFCU during 2012 are sharing in a record $9 million extraordinary dividend. When business is better than projected, members share in those benefits. It’s their money, and that is what makes CEFCU not a bank. Better!”

Bonus Dividends and Rebates Have Become A Credit Union Tradition

Other credit unions delivering year-end payouts include Scott Credit Union ($862 million, Edwardsville, IL), distributing a respectable $1.2 million. President & CEO Frank Padak said in a release that not only does the amount include a bonus dividend but also a loan interest rebate as well.

“We have been able to issue a bonus dividend to our members for 21 consecutive years,” Padak said. “For the past six years we also were able to give the loan interest rebate. Our members are the reason we have been successful and it is nice to show them that active membership in our credit union is a good decision on their part.”

“We also typically have among the lowest rates in the area on auto loans and competitive mortgage rates,” he continued. “We have really concentrated on positioning Scott Credit Union to be the best for our members and attractive for new members.”

ACIPCO Federal Credit Union ($130 million, Birmingham, AL) members are also part of a long-standing payout tradition. For the past 20 years members have received a rebate, with this year promising more than $1.7 million--the largest rebate ever offered by this credit union. Within the past 20 years, ACIPCO has reportedly paid out more than $25 million.

“We’re extremely fortunate to be able to offer such a large rebate with the economy in such an unstable state,” said ACIPCO FCU CEO Mike Harrell in a press release. “The credit union doesn’t take credit for this rebate; we owe our success to our loyal members.”

Some Members Cover Holiday Expenses with Payout

For one Guardian Credit Union ($128 million, Montgomery, AL) member, receiving a dividend/rebate payout of $3,300 may come in handy when the holiday Visa bill comes due. The credit union reported that it is handing out over $800,000 in interest rebates and dividend bonuses to approximately 23,000 members this year.

This is the second year the credit union has been able to provide a dividend/rebate payout totaling over $1.5 million.

Guardian Credit Union’s CEO Heath Harrell made a point to express the difference between how credit unions versus banks operate.

“We are very proud to offer our members a variety of free products and services such as free checking, free debit cards, free online banking and mobile banking; but it is tremendous when we can show not only our members but also the community a true difference in a credit union and bank by showing that banks return their profits to shareholders and we return our profits to our members.”

Other credit unions building a tradition of dividend/rebate payouts include DFCU Financial ($3 billion, Dearborn, MI), returning half of its 2012 earnings to members. According to a release, the Special Patronage Dividend will be paid to members on January 3, 2013, and is estimated to be $21 million. Since 2006, DFCU Financial has given members more than $130 million.

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