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Making a difference one member at a time

There are many things that make credit unions different from other financial service providers. One of these differences is our mission to assist members with their financial well being beyond simply offering low fees and great rates.

Credit unions are not-for-profit financial cooperatives, owned by the people who save and borrow there. Every member has the right to vote on policies and for members of their credit union board. The majority of credit union boards are made up of volunteer members.

Unlike most other financial institutions, credit unions do not issue stock or pay dividends to outside stockholders. Instead, earnings are returned to members in the form of lower loan rates, higher interest on deposits and lower fees.

By current federal statute, credit unions cannot serve the general public. A credit union's charter defines its "field of membership," which could be an employer, church, school or community.

Our critics often claim that credit unions "don't pay taxes." Credit unions do pay taxes -- payroll taxes, sales taxes and property taxes. Congress exempts credit unions from federal income taxes. The exemption was established in 1937, affirmed by statute in 1951, and re-affirmed in 1998 in HR 1151, the Credit Union Membership Access Act, which states:

"Credit unions, unlike many other participants in the financial services market, are exempt from Federal and most state taxes because credit unions are member-owned, democratically operated, not-for-profit organizations generally managed by volunteer boards of directors and because they have the specified mission of meeting the credit and savings needs of consumers, especially persons of modest means."

Credit unions don't exist to provide financial services alone. They provide financial services for the purpose of improving lives. While our first responsibility is to our members, part of being a cooperative movement means looking beyond our walls to the larger community. This philosophy leads credit unions to support worthwhile charitable and social causes, and to work with other credit unions to make promote and effect community outreach.

Over the past five years, 22 credit unions have pooled their resources to have a broader impact on San Diego communities.

Over the past year, this Credit Union Alliance of San Diego has supported more than 75 local health, human services, education and relief organizations through financial contributions -- more than $800,000 in 2004; volunteering -- hundreds of hours of personal time; and mentoring -- partnerships throughout the educational community.

In addition, members of the Credit Union Alliance of San Diego reach out by participating in political and grassroots campaigns to promote the advantages of becoming a member of a credit union and to protect the credit union movement's differentiating nonprofit status.

Learn more about credit unions in your community. Visit www.creditunionalliance.org.

Submitted by Credit Union Alliance of San Diego

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