Credit Union and Cooperative Patronage Refunds - Filene ...

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Exhibit B: 2011 Newsletter Article Announcing Patronage “Rebates and Rewards” to Members of Dow Chemical Employees’ Credit Union ($1.4B, Midland, Michigan) Report from the President/CEO: Exceeding Expectations in Troubled Times $5.7 million returned in rebates and rewards Although the lingering effects remain from one of the worst financial events in modern memory, Dow Chemical Employees’ Credit Union (DCECU) posted another banner year in 2010. In this unfortunate climate where bank and credit union failures exceeded the prior year’s results, DCECU continued to thrive. How is it that DCECU was able to take lemons and turn them into lemonade? What was this recipe for success? It’s really quite simple— don’t stray from the Core Values you’ve established, and stick to your Mission. Through conservative, principles- based decisionmaking, your credit union returned another $5.7 million back in the form of Loan Interest Rebates, Member Saver Rewards and other rebates to DCECU member- owners on top of very competitive loan and deposit rates! (emphasis in original) DCECU’s leadership has worked tirelessly during these difficult economic times. Numerous financial forecasts have been reviewed, contingency plans have been created based on varying interest rate and economic scenarios, expenses have been carefully controlled, and investments and capital expenditures have been scrutinized. Based on the above, one might conclude DCECU has been unaffected by the recent negative events. While not entirely true, DCECU is very proud of its foresight in the slight modification of its loan underwriting criteria when negative signals began to appear. The results—DCECU has performed superbly versus other similar financial institutions. And, while loan delinquencies were up slightly from one year ago, losses have been well- contained and have even fallen slightly year-over-year. 61
Due to careful planning and prudent financial stewardship, DCECU’s Board of Directors declared the following for 2010: • 15.00% Loan Interest Rebate that entitles borrowers in good standing* to receive a portion of the total interest paid on all eligible** DCECU loans • 15.00% Member Saver Reward that entitles depositors in good standing* to receive a portion of the dividends/interest earned on all DCECU shares/deposits • A VISA® Check Card rebate*** for users in good standing* These rebates and rewards were paid on January 1, 2011 (excluding VISA® Credit Card rebates, which will be deposited to Share/Savings accounts in January) to members in good standing* via deposit to their Prime Share accounts. I would like to thank you personally for your continued support of Dow Chemical Employees’ Credit Union and for utilizing the many services we offer. Because we are a not-for- profit financial cooperative, the more members use these services, the more all members benefit. We look forward to serving you in 2011 and will share more of the positive news that’s happening at DCECU throughout the year. As always, please do not hesitate to contact me or any of the DCECU staff in person, by phone . . . or via e-mail through our website at www.dcecu.org. Remember, DCECU is your credit union. Sincerely, Dennis M. Hanson President/CEO *Defined as those members who had at least $5 in their Share Account on December 31, 2010, have no delinquent accounts, have not had adverse collection activities on their accounts and have not had accounts charged off. **Ineligible loans include certain DCECU auto loans and mortgages, as well as VISA ® accounts with TravelFree Rewards, CashBack Rewards or Transaction Rebates. ***For members who utilized the DCECU VISA ® Check Card during 2010, the rebate is 0.125% (.00125) for signature-based transactions, calculated on net sales, and $0.01 for PIN-based transactions for each time the card was used during the year. Using your VISA ® Check Card helped DCECU reduce operating expenses and operate more efficiently. 62
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Credit Union and Cooperative Patron
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Copyright © 2011 by Filene Researc
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Acknowledgments We appreciate and a
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List of Figures 1. Average of 27 Cr
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What Are the Credit Union Implicati
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Introduction There are many ways in
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to us is a philosophical gulf betwe
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CHAPTER 1 Patronage Refunds Are Mor
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activities with their credit union
Page 19 and 20: members standing on the basis of ow
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Page 23 and 24: If the co-op’s earnings are not d
Page 25 and 26: principles. When we discuss other c
Page 27 and 28: A recent post to the Filene Researc
Page 29 and 30: Our response to the blog post quest
Page 31 and 32: The subject of this chapter is a th
Page 33 and 34: CHAPTER 4 Tax Differences between C
Page 35 and 36: Figure 2: Contrast Statutes Governi
Page 37 and 38: Patronage earnings that are allocat
Page 39 and 40: When rural electric cooperatives ar
Page 41 and 42: CHAPTER 5 Use of Patronage Refunds
Page 43 and 44: Figure 4: Present Value of Patronag
Page 45 and 46: y row 9). All in all, this is a ver
Page 47 and 48: Badgerland, all of this association
Page 49 and 50: AgGeorgia’s members probably expe
Page 51 and 52: All three credit unions use their p
Page 53 and 54: The capital accumulated through ear
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Page 57 and 58: on share deposits is not a patronag
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Page 61 and 62: Figure 6: Potential Tax Effects of
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Page 69: Appendix Exhibit A: 2007 Newsletter
Page 73 and 74: Think of how much more you, and oth
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