Beyond Banking: Credit Unions’ Co-operative Connection

Credit unions operate differently than the traditional high street banks you may encounter. Our focus is on the community, as we are run based on a co-operative model.

The recent Netflix hit ‘Bank of Dave‘ tells the story of an ordinary guy who gets frustrated at the impersonal service at his high street bank. He decides to set up an alternative bank of his own, which is run in the interests of local people and businesses.

In reality, Dave’s bank already exists – they’re called co-operative banks. Here in the UK, the best example of these are credit unions like ours. As with all co-operatives, our members are owners, and support for community is literally the reason we exist – not just an add-on.

Across the world, 1.2 billion people are members of a co-operative. During this Co-operatives Fortnight, we are helping to promote awareness of co-operatives throughout the UK, including our own. Being a co-op is one of the key things that makes credit unions different from banks. It affects every aspect of the business. This includes how we make decisions, and what we do with the profits we generate.

And it’s not just in banking either. In a landscape where many of the services we use feel more and more out touch, people are discovering that co-operatives are a better way of doing business, and deciding to make the switch.

What is a Co-operative?

Co-operatives are organisations that operate under the principles of co-operation, mutual assistance, and democratic decision-making. In a co-operative, individuals come together voluntarily to form an enterprise that serves their common needs and aspirations. These businesses prioritise the well-being of their members over profits, creating a sense of community ownership and shared responsibility.

What is a Credit Union?

Credit unions like London Mutual are a type of co-operative bank that specifically focuses on providing financial services to its members. We operate based on the “people helping people” mindset, aiming to meet the financial needs of our members while promoting their financial well-being. As a co-op, we’re run for the benefit of our members. This means that we use any earnings we generate to benefit our members and to support the community rather than maximising profits for external shareholders.

How Being a Co-op Makes Us Different

Member Ownership and Control:

As a credit union member, you can vote to influence decisions by attending our Annual General Meeting (AGM). Our credit union is different from regular banks because members own and govern it, not outside shareholders. This means that our members needs are our top priorty. Our structure gives you the power to shape our organisation and feel ownership.

Customer-focused Approach:

Credit unions offer financial services that prioritise their members. We take the time to understand your financial goals and offer solutions that meet your needs. Building relationships and delivering exceptional service is our priority, rather than just seeking to minimise costs and maximise profits.

Competitive Rates and Lower Fees:

As a not-for-profit organisation, credit unions often offer lower interest rates on savings accounts and loans, surpassing those of high street banks. Without the need to pay out money to shareholders, we can keep our costs low. It also means we can pass on savings to our members. By supporting a credit union, you can benefit from cost savings, higher interest earnings, and more affordable terms on loans.

Community Support and Development:

Credit unions embrace their role as community pillars, actively contributing to local development and well-being. They contribute their profits to the community, supporting local businesses and providing financial literacy to the community. By supporting a credit union, you become part of a movement that strengthens the local economy and fosters social impact.

Why You Should Choose a Co-op

In a cold and profit-driven banking sector, many people find that co-operative banks, particularly credit unions like ours, are a breath of fresh air. Their member-owned structure, customer-focused approach, competitive rates, and responsibility to community support set them apart from high street banks.

By joining a credit union like ours, you’re not just choosing to bank differently. You also become part of a larger movement working to change how our economy operates for the better.

Charles Nyamukasa

Digital Marketing Apprentice at London Mutual Credit Union.

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