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The Credit Union Difference

What is a credit union?

Not sure exactly what a credit union is? You are not alone! There is a lot of general confusion, because, lets face it, the two words that make up the term credit union are "credit" and "union." Credit unions were created by groups of who came together and pooled their money to lend out (this is where the "credit" part came from) amongst the group (or "union") because they didn't have access to other financial institutions or couldn't qualify for, or afford the cost, a loan.

Every credit union has a humble beginning that started with a few small contributions from a handful of people who were underserved financially. The universal credit union motto is "people helping people" because that's truly the foundation of our entire industry.

While in the beginning credit unions offered very limited services and products (mainly loans!) today we do it all and offer almost any product or service you would find at a traditional bank. No matter what you're looking for – a loan, a checking account, a savings account, a CD, an IRA, a safety deposit box – we've got you covered! Some credit unions even do business lending!

One major misconception about credit unions is that we are "mom and pop" financial institutions that offer great personal, service, but are inconvenient because of our size and reach. While credit unions still strive to maintain the same personal service we've always offered, we've banded together to really step up our game and find solutions to make banking with us convenient for our members.

Here is how:

- We have created a network in our industry called "Shared Branching." This is where different credit unions from across the United States have banded together to allow members to walk into a different credit union and conduct basic transactions as if they were in their home credit unions branch! From Mississippi and traveling to California, Vermont or Nebraska? There are branches available for you wherever you may go, should you need them. (Did we mention this is a FREE service and there is a FREE app that will find a location close to you?) But we took it one step further…

- We've invested in technology so that our members don't have to come into our branch if they don't want to or if are too busy! We have mobile banking, apps for your phone, mobile check deposit and 24/7 live chat through our website! You can even open your account or apply for a loan online!

- Another benefit we offer members is our FREE network of nationwide ATMs! (We even have an app that allows you to enter your location and find the one closest to you!)

Okay, so now you know why we're called a credit union and how awesome and convenient we are. There are a few other things that make us different though:

Not-For-Profit

This surprises a lot of people. We are a co-operative. Yep, a co-op, just like that grocery store down the street that you love to shop at because you know you're buying local! A co-op is an autonomous association of persons who voluntarily cooperate for their mutual social, economic, and cultural benefit. So if you enjoy buying local and eating local; banking local with a credit union is a nice fit!

Taxation

This also means we do not pay taxes– payroll taxes, sales taxes or property taxes. In 1937 Congress established a tax exemption that exempts credit unions from paying federal income taxes. This is something that we fight to keep as an industry because we use the money we save to invest in our community, keep our services affordable and fees minimal.

No Stockholders – We Are Member Owned

When you open an account and deposit your initial $25, you become a partial owner of Magnolia Federal Credit Union. We don't have stockholders, so when we make decisions, we are basing them on what would be in the best interest of our 21,000+ members. When Magnolia FCU does well, that money goes back into the pockets of our members in the form of low rates on loans, higher dividends (Hello, we have a checking account that earns 3% interest!) and keeping up with technology so that we can be the most convenient, affordable banking option for our members!

Volunteer Board

Because we are member-owned and don't have stockholders, we are governed by a volunteer board of directors that are elected by and from our membership. Board members serve voluntarily. If you join the credit union and would like to run for a spot on our board, you can! Credit Unions are economic democracy. Each member has equal ownership and one vote – regardless of how much money they have on deposit.

Speaking of members…

...joining a credit union seems tricky to a lot of people, but it's really not. Current federal statute states that credit unions cannot serve the general public. In the past, like we said above, credit unions were created amongst a small group of people – usually all of them had a common bond– farmers, nurses, teachers, veterans, etc. – and membership was only open those within their field. This is called known as "seg based" membership because only people within that "segment" of the population could join. There are still seg-based credit unions today, but there are also community-chartered credit unions (like us!) that are open to anyone who lives, works or worships in the counties we serve. Lucky for you, we currently serve seven!

FINALLY. The GOOD stuff.

Credit unions exist to help people, not to make a profit. Our goal is to serve our members and our community, especially those of modest means that need us the most. After all, we were started for that very reason! (As if we haven't said that enough!) We have a purpose: to serve, to help, to build. Our members are fiercely loyal for this very reason. They know the credit union will be there for them in good times and in bad times. Our members are not numbers to us; they are our people - our family, our employees, our community. We need each other to survive and thrive. We invest back into our community by raising money for worthwhile causes, volunteering at community events and sponsoring local youth teams/events. We believe in promoting financial literacy and host FREE financial education workshops (open to the entire community) on topics like budgeting, understanding your credit score and purchasing a home or car. In this same vein, we offer one-on-one financial counseling to members who find themselves in a financial crisis or simply need advice on putting together a spending plan.

When our members do well, we do well. It's as simple as that.