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  • Jamie Strayer

What are the Credit Union International Operating Principles?

Credit unions around the world operate per the same core principles and values. They are:

Democratic Structure

  • Open and Voluntary Membership

  • Democratic Control

  • Non-Discrimination

Service to Members

  • Equal Distribution to Members

  • Service to Members

  • Building Financial Stability

Social Goals

  • On-Going Education

  • Cooperation Among Cooperatives

  • Social Responsibility

How were they created?

Credit unions are cooperatively owned businesses. The first modern cooperative was founded in Rochdale, England in 1844. Its creation was driven by a social agenda based on the concept of people working together to achieve a better life for themselves and their community. The Credit Union International Operating Principles are a variation of the original “Cooperative Principles”.

What do these principles look like in action?

Open and Voluntary Membership

Membership in a credit union is voluntary and open to all that meet membership requirements, based on a common bond. For example, school teachers and municipal workers formed credit unions. Some credit unions serve entire geographic communities, like a town or city.

Democratic Control

Credit union members enjoy equal rights to vote (one member, one vote) and participate in decisions affecting the credit union, without regard to the amount of savings or deposits or the volume of business. In some countries, credit unions offer the first or only opportunity for citizens to vote.


Credit unions are do not discriminate based on race, nationality, sex, religion, politics or income level. Credit unions provided the first loans to women in their own names in the U.S. They look for ways to serve all.

Service to Members

Credit unions’ services are directed to improve the economic and social well-being of all members. Therefore, credit unions were not involved in the mortgage collapse in the early 2000s and why credit unions do not offer predatory loans.

Equal Distribution to Members

Credit unions are not-for-profit. The profit they do make ensure the safety and soundness of the business. Profits in excess of that safety and soundness belongs to and benefits all members with no member or group of members benefiting to the detriment of others. This also drives the credit union business model. Credit unions do not profit maximize on the lending side to reward savers. Nor do they operate with a business model that is punitive to savers for the benefit of borrowers. The principle structure of the business is that all owner-members equally benefit from the business. Credit unions encourage thrift through savings and use the deposits as capital to provide loans at a fair rate. The net income is applied to capital reserves at a level determined by the board of directors based on regulatory guidance. Beyond that reserve, the credit union board determines if the net profits will be distributed to members in the form of a payment of dividends or through improving or adding access to services to benefit all members.

Building Financial Stability

A prime concern of the credit union is to build the financial and social strength for the cooperative business and its members. Financial education is a core activity at every credit union in the world. Credit unions actively promote the education of their members, officers, and employees, along with the public in general, in the economic, social, democratic, and mutual self-help principles of credit unions. The promotion of thrift and the wise use of credit, as well as education on the rights and responsibilities of members, are essential to the dual social and economic character of credit unions in serving member needs.

Cooperation Among Cooperatives

In keeping with the collaborative philosophy and practices of cooperatives, credit unions actively cooperate with other credit unions, cooperatives and their associations at local, national, and international levels to best serve the interests of their members and their communities. For examples, credit unions create new products and share best practices and model policies so that other credit unions can offer the same products. This is unheard of in the banking industry. Credit unions offer more surcharge free ATMS than almost any bank through the CO-OP Network and allow members of peer credit unions to use branches as their own through Shared Branching. A consumer with a small town credit union experiences greater convenience and access to their money that if they were a customer of a big, corporate bank.

Social Responsibility

Continuing the ideals and beliefs of the cooperative pioneers, credit unions seek to bring about human and social development through financial justice. Their vision of extends both to the individual members and to the larger community in which they work, worship or live. The credit union ideal is to extend service to all who need and can use it. Every person is either a member or a potential member and appropriately part of the credit union sphere of interest and concern. Decisions should be taken with full regard for the interest of the broader community within which the credit union and its members reside.

These Credit Union Operating Principles are founded in the philosophy of cooperation and its central values of equality, equity, and mutual self-help. Recognizing the varied practices in the implementation of credit union philosophy around the world, at the heart of these principles is the concept of human development and the brotherhood of man expressed through people working together to achieve a better life for themselves and their community. They were adopted by the World Council of Credit Unions on August, 24 1984.


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