July 20th, 2007
Yes, Dwight from WesCorp has posted a new commentary.? Some might wonder why I like his insights so much?? I think it really comes down to the biggest difference between how banks and credit unions operate.
But before I give you my insights, I will give you the link in case you just want to go see what Dwight thinks.
Banks are profit motivated.? And keep in mind that I’m not against profits.? I work at a small company, and profits are very important.? But, at what level?.? We live in a free market, and people and companies get to decide that for themselves.? And believe me, I’m grateful for that.? That being said, I believe banks mainly see things through a lense of earning the highest profits they can.
Credit Unions on the other hand are not beholden to a?limited set?of stock holders and are not-for-profit.? And before?I go on, you might wonder, what does Dwight have to do with credit unions?? Dwight Johnston works for WesCorp, one of the largest corporate credit unions.? A corporate credit union exists to serve other credit unions and maintains the same philsophy, but just on a larger scale.
Ok, back to the point.? What is the difference between a credit union and a bank?? Credit Unions are also owned by their “stock holders”, but the stock holders are everyone that has a deposit there and is referred to as members.? Everyone with a deposit, no matter how large or small gets one?vote.? The board members are volunteers that are democratrically voted on by the members.? The goal of the credit union is to return the highest rates on the savings products and lowest loan rates possible.??The remaining profits are then returned in the form of dividends to each member or possibly higher savings product rates, lower loan rates, and/or other services.? Another credit union puts it this way, “not for profit, not for charity, but for service.”
I believe the biggest difference is credit unions look at things through a lense of service instead of a lense of profits.? This basic notion is what leads me to be a fan of Dwight.? He isn’t trying to convince you that everything is okay through?a lense of profit.? He gives you all of the details through a lense of service.?
And also for the record, WesCorp is actually a competitor of ours.? Many of our clients are credit unions and they also use WesCorp.??I would love some feed back, post away.
Here is the link again to the July Commentary.
Have a great day.
-- By +Chris Duncan