The Mission, Beliefs and Operating Principles of Credit Unions
Ian MacPherson, 1999
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The World Council of Credit Unions is the international organisation of credit unions
and similar co-operative institutions.
Its mission is to
assist members to organise, expand, improve and integrate credit union and related
institutions as effective instruments for the economic and social development of people.
The World Council of Credit Unions shall:
|serve as a forum for the exchange of ideas and information;|
|provide services for its members;|
|promote membership development and growth;|
|represent members interests; and |
|extend co-operative financial services to areas where people want and need such
Statement of Beliefs
The World Councils statement of beliefs affirms the movements commitment to
the expansion around the globe regardless of race, nationality, sex, religion and
politics. It envisions credit unions as vehicles of social, economic and human
development, for both individuals and communities. It calls for credit unions to
encourage the prudent utilisation of local savings and to work with other credit unions in
the interests of their members. It calls upon all credit union organisations to become
self-sufficient institutions controlled through effective democratic processes. And it
encourages credit unions to develop the best human resources, whether elected or paid
|We believe the credit union movement should expand the opportunity to participate in the
services and benefits of credit unions to all who want and need these. Such services and
benefits should be provided with neutrality relative to race, nationality, gender,
religion or politics.|
|We believe the credit unions should serve as effective instruments for human, social and
economic development throughout the world.|
|We believe that local, national and international credit union organisations should seek
to contribute to the development goals and needs of their communities.|
|We believe that the credit union movement should foster and practice the principles of
co-operative pooling and utilisation of resources for the ultimate benefit of the credit
|We believe that all sectors of the credit union movement should strive for permanent
viability through the attainment of financial and technical self-sufficiency.|
|We believe that the credit union leadership and management should embrace participation
in the democratic process at all levels of the credit union movement.|
|We believe that the credit union movement should attract and develop the best possible
human resources at all levels to serve the leadership, management and staff of the
|We believe that the credit union movement should adhere to the Credit Union Operating
Principles defined by the World Council of Credit Unions.|
This statement of beliefs is a forceful expression of what the credit union idea has
become after some 80 years of experience. It possesses considerable cohesion while it
explicitly and implicitly suggests the direction in which the movement should go. The
emphasis is on a free, independent movement that operates democratically in the
interest of the members. Another important aspect is its explicit support for a
unified system operating within a global framework.
The operating principles are derived partly from practices that have emerged over the
years from within credit union organisations and partly from co-operative principles
articulated by the International Co-operative Alliance in 1937, 1966 and 1995. The 10
operating principles for credit unions are:
|open and voluntary membership;|
|limited deposits on equity capital;|
|fair rate of interest on deposits;|
|the return of surpluses to members based on their participation;|
|neutrality in race, religion and politics;|
|a commitment to high quality services to members;|
|support for ongoing education;|
|co-operation among co-operatives; and|
|a concern for social responsibility|
These principles can be grouped into three primary categories: democratic
structures, services to members; and social goals.
Membership in a credit union is voluntary and open to all within the accepted common
bond of association that can make use of its services and are willing to accept the
Credit union members enjoy equal rights to vote (one member, one vote) and participate
in decisions affecting the credit union, with regard to the amount of savings or deposits
or the volume of business. Voting in credit union support organisations or associations
may be proportional or representational, in keeping with democratic principles. The credit
union is autonomous, within the framework of law and regulation, recognising the credit
union as a co-operative enterprise serving and controlled by its members. Credit union
elected offices are voluntary in nature and incumbents should not receive a salary.
However, credit unions may reimburse legitimate expenses incurred by elected officials.
Credit unions are non-discriminatory in relation to race, nationality, sex, religion,
Services to Members
Service to Members
Credit unions services are dedicated to improve the economic and social well-being of
Distribution to Members
To encourage thrift through savings and thus provide loans and other services, a fair
rate of interest is paid on savings and deposits, within the capacity of the credit union.
The surplus arising out of the operations of the credit union after ensuring appropriate
reserve levels and after payment of limited dividends on permanent equity capital where it
exists, belongs to and benefits all members with no member or groups of members benefiting
to the detriment of others. This surplus may be distributed among members in proportion to
their transactions with the credit union as interest or patronage refunds, or directed to
improved or additional services required by members.
Building Financial Stability
A prime concern of the credit union is to build financial strength, including adequate
reserves and internal controls that will ensure continued service to membership.
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.
Co-operating Among Co-operatives
In keeping with their philosophy and the pooling practices of co-operatives, credit
unions within their capacity actively co-operate with other credit unions, co-operatives
and their associations at local, national and international levels in order to best serve
the interests of their members and their communities.
Continuing the ideals and beliefs of the co-operative pioneers, credit unions seek to
bring about human and social development. Their vision of social justice extends both to
the individual members and to the larger community, in which they work and reside. 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.
This paper is an edited version of chapter 9 of Ian MacPhersons splendid history
of the international credit movement.
- Hands Around the Globe A History of the International Credit Union Movement
and the Role and Development of the World Council of Credit Unions, Inc.
- Horsdal and Schubart Publishers Ltd, Victoria, BC, Canada, 1999
- ISBN 0 920663 67 2
For details on how to purchase a copy of the book and/or obtain further information on
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