WASHINGTON - Millions of Americans were celebrating the credit union difference last week, counting their year-end dividends and interest rebates deposited into their accounts as a result of their membership in the cooperative financial institutions.
From Massachusetts to Hawaii, credit unions large and small were awarding their members with millions of dollars in special dividends and interest rebates over the past six weeks as part of the annual payback of excess earnings.
Hanscom FCU, in Massachusetts, paid its members a $1 million “loyalty dividend”; Hawaii State FCU paid out $2 million in bonus dividends and loan interest rebates; Western Division FCU paid a $1 million bonus dividend; Fort Campbell FCU paid $2 million in patronage dividends; American Airlines FCU paid members $10 million; Clark County CU $7 million in dividends and interest rebates; and DFCU Financial, the giant Michigan credit union disbursed more than $17 million to its members last week (see related item, at right).
One member of Clark County CU got a whopping $56,000 payment, and 1,200 members in total got checks for $1,000 from the Las Vegas credit union (see related story, above). Some members of DFCU Financial got back as much as $10,000.
“We had an outstanding year,” said Frank Paddock, president of Scott CU, which paid its members $240,000 in bonus dividends and interest rebates. “This is actually just one of the ways that we, as a coop, were able to give back to our members.”
“That is the difference between a bank and a credit union,” said Ann Kibby, president of Cornerstone Community FCU, which paid its members a bonus dividend for the fourth quarter of $488,000. “We’re member-owned and not for profit; we’re directly responsible to the members.”
Each of the credit unions adopted their own formulas and rationales for the annual payouts.
American Airlines FCU, for instance, returned an additional 2.9% on qualifying savings accounts and returned 2.9% of interest paid on qualifying loans for 2007.
Some credit unions that have paid bonus dividends in the past eschewed the special payouts this year for a variety of reasons. Dort FCU, in Flint, Mich., for example, which paid members a $1-million dividend last year, is building two new branches, so is not planning a member bonus this year.
Pennsylvania State Employees CU, which paid a $7.4-million dividend last year, has decided against such a payment this year as it builds its capital, according to Greg Smith, president of the Harrisburg, Penn., credit union. The $2.6-billion credit union is also embarking on a multi-million dollar project to build a new headquarters.
