Credit unions are financial cooperatives and, like cooperatives around the world, they generally operate according to the same seven core principles and values adopted in 1995 by the International Cooperative Alliance. Cooperatives can trace their roots to the first modern cooperative founded in Rochdale, England, in 1844.
The Seven Cooperative Principles are a set of fundamental values and philosophies that guide credit unions and cooperatives in equality, fairness, and mutual self-help.
Today, more than 1 billion people are members of cooperatives, or co-ops. You will find co-ops involved in a variety of businesses, from food to hardware stores and taxis; and though their businesses differ, their mutual goal is a commitment to community and improving the life of their members.
While they have been updated from their original form, many credit unions use the Seven Cooperative Principles as part of their mission to serve their members; and they communicate these principles to members as a strategic differentiator.
Seven Cooperative Principles for Credit Unions
- Voluntary Membership
Credit unions are voluntary, cooperative organizations, offering services to people willing to accept the responsibilities and benefits of membership, without gender, social, racial, political or religious discrimination.
Many cooperatives, such as credit unions, operate as not-for-profit institutions with volunteer board of directors. In the case of credit unions, members are drawn from defined fields of membership.
- Democratic Member Control
Cooperatives are democratic organizations owned and controlled by their members, one member one vote, with equal opportunity for participation in setting policies and making decisions.
- Members’ Economic Participation
Members are the owners. As such they contribute to, and democratically control, the capital of the cooperative. This benefits members in proportion to the transactions with the cooperative rather than on the capital invested.
For credit unions, which typically offer better rates, fees and service than for-profit financial institutions, members recognize benefits in proportion to the extent of their financial transactions and general usage.
- Autonomy and Independence
Cooperatives are autonomous, self-help organizations controlled by their members. If the cooperative enters into agreements with other organizations or raises capital from external sources, it is done so based on terms that ensure democratic control by the member and maintains the cooperative autonomy.
- Education, Training and Information
Cooperatives provide education and training for members, elected representatives, managers and employees so they can contribute effectively to the development of the cooperative.
Credit unions place particular importance on educational opportunities for their volunteer directors, and financial education for their members and the public, especially the nation’s youth. Credit unions also recognize the importance of ensuring the general public and policy makers are informed about the nature, structure and benefits of cooperatives.
- Cooperation Among Cooperatives
Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, state, regional, national, and international structures.
- Concern for Community
While focusing on member needs, cooperatives work for the sustainable development of communities, including people of modest means, through policies developed and accepted by the members.
Display the Principles at Your Credit Union
A PDF version of the Principles is available to download. Printed copies of the Seven Cooperative Principles are also available for purchase.