SAN FRANCISCO – In an effort to emphasize the credit union difference to its members, San Francisco Fire CU is planning to create a new member capital accounts.
"Members have lost a sense of what the credit union difference is," Diana Dykstra, president of San Francisco Fire, told The Credit Union Journal. "We talk about ownership and one member one vote. But ask the average credit union member and they don't understand that. I think the Member Capital Account, or whatever we end up calling it, instills a sense of ownership. It brings us back to some of the basic tenets of credit unions - that we are benefitting our members in many different ways. I want members to think about how doing business with the credit union isn't just good for the credit union, it's good for everyone."
Under the plan, members would be paid capital based on their relationship with the $620 million credit union, both for loans and deposits. Members wouldn’t be able to access the money in their capital account, but will see the total grow on their statements.
The capital will be invested in higher-earning instruments, since the account would not be insured. The account will earn dividends on a quarterly basis, which will be deposited into members' regular share accounts. The plan also calls for paying members a cash distribution at some point.
With its capital dropping two percentage points to 8.21% as a result of the economy and the costs related to the corporate credit union bailout, San Francisco Fire is waiting for the economy to improve and the costs of the corporate bailout to stabilize before launching the Membership Capital Account.
