What is a Credit Union?
A Credit Union is a group of people sharing a common bond of employment, association or residence. The Credit Union is owned and democratically controlled by the members.
Q. What is the purpose of a Credit Union?
A. The purpose of the Credit Union is to encourage thrift through regular savings by the members, and from the savings accumulated, grant loans to members at a reasonable rate of interest.
Q. How is the Credit Union managed?
- A Board of Directors elected by the members controls the policies of the Credit Union.
- A Credit Committee elected by the members decides on applications for loans.
- A Supervisory Committee elected by the members examines the books and records of the Credit Union to give members extra assurance that their affairs are being handled properly and wisely.
Q. Are Credit Union funds safe?
A. The financial soundness of the Credit Union is safe-guarded in several ways:-
- By an annual audit conducted in accordance with the requirements of the Co-operative Societies Act.
- By the bonding of all officers who handle the Credit Union funds.
- By the creation of a Stabilization Fund to guarantee deposits.
Q. What is the Stabilization Fund?
A. The Jamaica Co-operative Credit Union Stabilization Fund was set up by Credit Unions to guarantee that on the liquidation of a Credit Union, a member will get $1.00 for every $1.00 he has with the Credit Union.
Q. What is the difference between Shares and Deposits?
A. Shares signify part ownership in the Credit Union. You are encouraged to save regularly in shares, as your dividends and eligibility for loans are related to this account.
The other way to save is by deposits where members lodge and withdraw to meet current demands. These are interest bearing accounts.
Q. Do you get returns on your savings?
A. Yes. Once the Credit Union makes a surplus, the members decide at the Annual General Meeting the percentage dividends to be paid on shares. Interest is paid on deposits.
Q. Can I withdraw from my Shares and Deposits accounts?
A. Yes, but if you are going to withdraw a large amount, you are requested to give the Office some notice.
Q. Are the Savings Insured?
A. Yes, through CUNA Mutual Insurance Company. When you die, your savings are increased by a certain amount, depending on your age, and given to your beneficiary. You should therefore ensure that you complete the Nomination form indicating who your beneficiary should be.
Your loans are also insured and the “Debt dies with the Debtor”.
Q. What is the interest rate on loans?
A. Interest on loans varies between 13 and 20 percent per annum on the reducing balance, for the time being.
Q. When can you get a loan?
A. Loans can be accessed immediately upon joining the Credit Union at a rate of 20%. However, loans thereafter can be accessed at prevailing interest rates. Applications for loans must be made on the specified form provided by the Credit Union and the purpose must be stated. If the facts given in the application are found to be misrepresented, or the money used for some other purpose, the loan shall become immediately due and payable.
Q. How much can you borrow?
A. The Credit Union loan policy will dictate this. Consideration will be given to all requests and decisions made based on your need, the amount of your savings, your ability to repay and your collateral etc.
Q. What kind of security will the Credit Union accept?
A. In addition to your savings, we will accept co-makers savings, deposits, registered titles, Bills of Sale over motor vehicles, stocks and shares and cash surrender value on insurance policies.
Q. Who is a Co-Maker?
A. This is a member who pledges their savings to enable you to get a loan. They are like a guarantor. A co-maker’s shares cannot be withdrawn until the loan has been repaid. Before you sign as a co-maker or guarantor, please check for the borrower’s loan balance as you will be liable for the member’s total liability with the Credit Union.
Q. Will lodgements to your accounts at the Credit Union require the approval of a Bank official?
A. No
Q. Will you need permission to co-sign/guarantee a fellow member?
A. No.
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