Credit union overview

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Here's a quick overview of Credit Unions for anyone who would like to understand this type of financial services firm. Member owned, with products that are typical to banks. Perfect introduction to use for new customers. We can add to or modify this presentation for any credit union that would like a custom version for educating community groups. Contact us 316 680 6482.

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Credit union overview

  1. 1. Financial Services Industry Training Overview of Credit Unions The Alternative to Banks Saunders Learning Group, LLC Saunders Learning Group, LLC, Andover, KS
  2. 2. Training from Saunders Learning Group Saunders Learning Group provides a variety of training programs, workshops and seminars targeted to the financial services industry. Programs are available in a wide range of topics, and we are specialists in developing custom programs that are targeted to your needs. Contact the founder, Floyd Saunders at 316-680-6482 or at floyd@floydsaunders.com for more information. Saunders Learning Group, LLC, Andover, KS1
  3. 3. Advantages of Credit Unions Customers are owners  The owners and customers are one in the same. Any decisions about fees, products and services benefit everyone. Credit unions are non-profit  Any profits from operations are returned to the owners/members in the form of dividends. Lower fees and higher savings rates  Free accounts with no or low minimum balance requirements  Interest rates on savings, certificates of deposit etc. are typically better than at a bank Interest rates on loans and credit are often lower  Because a credit union does not have to make a profit like a bank, it can typically offer lower rates on loans and credit cards. Saunders Learning Group, LLC, Andover, KS 2
  4. 4. Disadvantages of Credit Unions  Limited Branch Locations and ATMs.  Many credit unions only operate in one location.  But may be part of an ATM network  Most Are Insured, but Not All.  Like banks and the FDIC, a federal credit union is also insured by the U.S. government. The National Credit Union Administration, but not credit unions are insured. Look for the name “Federal” as this would indicate they are chartered by the NCUA and insured. When in doubt, ask.  Fewer Services.  Credit unions don’t offer the wide array of services that full-service banks do.  If you need a large commercial mortgage loan, for example, your local credit union may not be able to provide you with one. Saunders Learning Group, LLC, Andover, KS 3
  5. 5. Credit Unions Credit Unions are similar to banks, except for the following differences:  Credit Unions are member owned. Each depositor is issued shares of ownership based on deposits held  Profits are returned to the members in the form of dividends to their savings account  Interest rates at credit unions are typically less than at banks for loans, due to their non- profit, member owned status.  Credit Unions offer customers many of the same products and services as retail banks.  Credit Unions are formed by the members having a common interest (working at the same company for example).  Credit Unions are chartered and regulated by the National Credit Union Administration. Saunders Learning Group, LLC, Andover, KS
  6. 6. Trends in the Credit Union MarketWhile the number of credit unions have declined in the financial crisis, they are a force that serves the needs of itsmembers. Loan growth has started to increase as the financial crisis of 2008-09 fades. Saunders Learning Group, LLC, Andover, KS
  7. 7. More Consumers are Turning to Credit Unions  Year over year growth in core deposits at credit unions came in at 14.6% in 2011  Consumers voted with their feet as they left banks set on charging even more fees to their customers and moved money to credit unions.  Credit unions first mortgage market share is at a high point with 6% of market share in 2011. Saunders Learning Group, LLC, Andover, KS 6
  8. 8. Credit UnionsFunction Provides consumers with a wide range of banking products and services designed to meet the needs of a varied customer base.  Acceptance of deposits in to checking and savings accounts  Transaction processing for deposit accounts  Issues credit cards and processes merchant transactions, payment processing  Arranges safe deposit boxes for customersExample  Sells certificates of deposit, retirement accountsActivities  Provides for transfer of funds  Provides banking via ATM machines and mobile devices  Arranges a variety of personal loans  May also process applications for mortgage loans Example Credit Unions perform similar functions, provide most of the sameCompanies products and services as banks. The largest include the Navy Federal and Pentagon Federal Credit Unions, State Employees (North Carolina) and The Golden 1 Credit Union in Calif. Saunders Learning Group, LLC, Andover, KS
  9. 9. Credit Unions Products and Services Checking & Savings, ATM cards Online Banking Mobile Banking Payment Processing Loan Products – Home, Auto, Personal, Credit Cards Saunders Learning Group, LLC, Andover, KS
  10. 10. Types of Accounts1. Checking accounts are a type of deposit account for the purpose of securely providing access to funds on demand, via checks, ATM transactions, and transfers of funds.2. A deposit account is a savings account, money market or time deposit at a bank that allows money to be deposited and withdrawn by the account owner (s). Also referred to a Savings Deposit Account (SDA).3. Money market accounts is a deposit account with a higher rate of interest paid for higher balances.4. Time Deposit Account (TDA) is a deposit account that cannot be withdrawn for a fixed period of time, unless an early withdraw fee is paid. In most cases the longer the term of deposit the better the yield on the deposit.5. Transactions are recorded on the bank’s books and the resulting balance is reflected as a liability for a bank on it’s books.6. Some credit unions may charge fees for services, and in most cases the credit unions will pay the customer interest on funds deposited. Saunders Learning Group, LLC, Andover, KS
  11. 11. Automatic Teller Machines or ATMs An automated teller machine (ATM),is a telecommunications devices used to store and dispense cash, allow account holders access to accounts and to perform a variety of financial transactions including transfer of funds, payments, and cash advances on credit cards. Many credit union-issued ATM cards are linked to the Credit Union 24 or Co-Op ATM network, which eliminates surcharge fees for credit union members. These ATMs are located frequently traveled locations such as 7-Eleven, Costco and Walgreens across the country. Saunders Learning Group, LLC, Andover, KS
  12. 12. Online Banking Consumers use online banking to check balances, pay bills and transfer funds. Credit Unions that provide online banking can reduce processing costs and provide a wide range of services to customers 24 hours day from anywhere. Saunders Learning Group, LLC, Andover, KS
  13. 13. Online BankingOnline banking is more than 1/3 of the transaction volume at most banks and credit unions. Saunders Learning Group, LLC, Andover, KS
  14. 14. Mobile Banking – Growing Rapidly Customers do banking on their mobile devices  87% of Americans have a mobile phone, half of those are smart phones  21% of mobile phones users have done mobile banking in 2012, double the rate from 2011 30% of banking customers will use mobile banking by 2013  The Fed pulled together all the survey numbers and concludes that at least one in three American banking customers who own a smartphone will engage in mobile banking by 2013.  The most common use of mobile banking is to check account balances or recent transactions (90% of mobile banking users).  Transferring money between accounts is the second-most common use of mobile banking (42% of mobile banking users).  The primary reason why mobile phone users had not yet adopted mobile banking was that they felt their banking needs were being met without the use of mobile banking (58%).  62% of the under banked who use mobile payments have used it to pay bills. Saunders Learning Group, LLC, Andover, KS
  15. 15. Typical loan decision process Customer Bank Loan application performs Yes Loan docs requests a Credit prepared is completed credit loan (could be online) Decision analysis Credit No Report inform customer Employment Verification Customer Bank Bank prepares Bank signs verifies Loan systems accounting funds loan Loan serves loans documents entries updatedThis generalized process is followed for all loan types, with different loans requiring more documentationor verification. For example a loan secured by real estate needs an appraisal to set the value of theproperty. Inventory financing might need to be secured by a lien on the inventory. Title to an auto wouldbe retained by the bank until the loan is paid off etc. Saunders Learning Group, LLC, Andover, KS
  16. 16. Questions Saunders Learning Group, LLC, Andover, KS
  17. 17. Post Workshop Action Plan  Complete the Post Workshop Action Plan Saunders Learning Group, LLC, Andover, KS16
  18. 18. Thank You !Saunders Learning Group, LLCSaunders Learning Group, LLC, Andover, KS
  19. 19. About the Author/Presenter  Floyd Saunders has worked on Wall Street with both Bank of America and JPMorgan, where is was a vice president in global financial systems. He has worked across the industry in retail, commercial, and investment banking.  He has taught courses in Money and Banking and extensively for the American Institute of Banking and various colleges.  As a consultant, he developed and taught a wide range of banking and investing courses.  He authored three programs for the American Bankers Association: Banking on Mutual Funds and Annuities, Introduction to Securities Markets and Investing in Securities.  He is the author of “Figuring Out Wall Street” and his next book is “Family Financial Freedom” a book on personal money management. Saunders Learning Group, LLC, Andover, KS
  20. 20. Reference Material Figuring Out Wall Street Consumer’s Guide To Financial Markets By Floyd Saunders Publisher: Saunders Learning Group ISBN: 978-0-9824019-0-3 Available from Amazon: http://www.amazon.com/Figuring-Out-Wall-Street- Consumers/dp/0982401906 and many other online book stores. Book summary: Figuring Out Wall Street, is the concise guide to help everyone understand how what to do now to restore our financial systems. Written in an easy to understand manner, even the most complex financial concepts are easy to digest. This book provides help to monitor investments with a review of investment products, financial regulators and economic indicators. Learn how the stock market exchanges work and the world of investment banking, hedge funds, venture capital and private equity. Every chapter includes action plans for investing. Saunders Learning Group, LLC, Andover, KS

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