In the form of patronage dividends, a credit union can use the money it earns in excess of its expenses to engender loyalty among its membership and strengthen the institution.
Workers’ Credit Union ($1.2B, Fitchburg, MA) started offering a patronage dividend to members in 2013, and 2015 marks the third consecutive year of what it calls its GiveBack Program. The Massachusetts credit union paid out $2.5 million in 2014 and plans to bump that up to $3 million for 2015.
“In combination with the fact capital was growing, we thought it was a good idea and the right thing to do to give some of our profits and capital back to our members,” the credit union’s chief financial officer, Tim Smith, says of Workers’ decision to offer the dividend in 2013. “Some folks might say we have too much capital, but we like the flexibility that allows.”
To learn more about Workers' program, read The Big GiveBack by Callahan writer Erik Payne.
Approximately four out of 10 credit unions make plans each year to issue dividends if markers are met, but only one in end up doing it, and when it comes to patronage payouts, it’s even more rare for a credit union to tell its members “the check is in the mail.”
Earlier this year 2015, Callahan surveyed credit union CEOs and CFOs regarding their patronage dividend attitudes and activity. There were 466 respondents to the survey, which included company clients and non-clients alike, represented an even mix of asset sizes and regions.
Find out more about this survey by reading How Credit Unions Pay Out The Patronage by Callahan senior writer Marc Rapport. To view the results graphically as well, please read Patronage Dividends: A Callahan Survey by Callahan analyst Daniel Wang.
Since 1953, CoVantage Credit Union ($1.2B, Antigo, WI) has called the north central Wisconsin city of Antigo home. And like its surrounding rural farming and lumbering region located approximately 160 miles northwest of Milwaukee, CoVantage is steeped in tradition.
One of these traditions is an annual patronage payment to members in the form of loan interest rebates and savings bonuses. And to learn more about CoVantage's 33-year old patronage dividend and how the credit union has returned more than $15 million to members in the past 10 years, read A Tradition Of Thanks Three Decades In The Making by Callahan contributor E.C. Harrison.