What is a Credit Union?
A helpful, impartial description is given by Martin Lewis, Radio 2’s Money Saving Expert. A Credit Union:
- Is a not-for-profit financial institution
- Is mutually-owned and democratically-controlled
- Pools members’ savings (also known as ‘shares’) to make low-cost loans to other members.
- Has a ‘common bond’ that determines who can join. The common bond might be for people living or working in the same area, people working for the same employer, or people who belong to the same association, such as a church or trade union.
How does a Credit Union work?
The members of a credit union pool their savings. These savings then provide a pool of funds from which loans can be made. A credit union borrows money from its savers and may pay them a return on their money (dividend). The money borrowed from members is lent out to other members, who pay interest on the money loaned to them. The objectives of a credit union are as follows:
- the promotion of thrift among its members by the accumulation of their savings
- the creation of sources of credit for the benefit of its members at a fair and reasonable rate of interest
- the use and control of members’ savings for their mutual benefit
- the training and education of members in the wise use of money and in the management of their financial affairs
Fusion Credit Union
Membership of Fusion Credit Union is open to anyone who falls within our registered ‘common bond’ – ie, living or working within the boundaries of Lichfield District Council.
We were registered in March 2005 after five years of work by council and voluntary organisations and later, by our team of individual founder volunteers. We still operate entirely through our team of volunteers.
The operation of every credit union is managed and controlled by an elected Board of Directors. All officers of the credit union are members of the credit union, who are elected by the membership at the Annual General Meeting. Each member has one vote, regardless of the amount of their savings.
Click here for the Fusion Credit Union Directors.
Whilst credit unions might employ staff to manage the credit union on a day-to-day basis, control lies firmly within the hands of the members, through their elected representatives.