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Frequently Asked Questions
Q: What is a credit union?
A: A credit union is a financial cooperative organization that is owned collectively by its members. The organization serves only those who qualify for membership and become a member of the credit union. Credit unions are incorporated as a non-profit organization and therefore enjoy a tax-exempt status for most of their income. Credit unions are chartered either as a state of federally chartered financial institution. Credit unions are chartered to serve communities or people within those communities that have a common bond or geographic commonality. In Kansas, state-chartered credit unions are required to have deposit insurance through the National Credit Union Administration. Kansas state-charted credit unions are regulated by the Kansas Department of Credit Unions.
Q: How can I find a credit union to join?
A: You can view the Credit Union Locator page on the Kansas Department of Credit Unions web-site for a current list of Kansas state-chartered credit unions. You can also visit the National Credit Union Administration web-site for a listing of credit unions. Your local phone directory should also list credit unions in your area.
Q: How can I join a credit union?
A: Simply contact the credit union and ask if you meet their field of membership requirements. If you do, you are required to deposit and maintain a minimum deposit in an account. The deposit maintains your membership and entitles you to part ownership of the cooperative and voting rights.
Q: Can I join more than one credit union?
A: Yes. You can join as many credit unions as you like. To join, you simply have to meet the credit union’s field of membership.
Q: What protections do I have as a member of a credit union?
A: There are a number of laws in place to protect credit union members and potential members. Below is a summary of consumer protection laws that apply to federally insured state chartered credit unions:
Q: How can I find how financially strong my credit union is?
A: Similar to banks, all credit unions are required to file a report of financial condition, called a Call Report, at least quarterly. The call reports for all credit unions can be viewed by anyone at the National Credit Union Administration’s web-site.
Q: How much of my deposits are insured and who insures them?
A: All credit unions in Kansas are required by statute to have deposit insurance with the National Credit Union Administration. Accounts are insured up to $250,000.
Q: What penalties do I pay to redeem a CD early at my credit union?
A: A Certificate of Deposit (CD) is a deposit that requires you to keep the money deposited for a certain time period, usually one year. The penalties you pay to redeem a CD prior to its contractual date of maturity depend on the details of the individual CD. The penalty is usually equivalent to several months of interest that would have been earned or a market-based penalty.
Q: How do I determine how much interest I pay on a loan?
Q: What is the Annual Percentage Yield (APY) and why is it sometimes different that the Annual Percentage Rate (APR)?
A: The APY refers to the total return that you will receive in one year if you deposit your interest earned on an interest bearing account and not withdrawal the interest. If you withdrawal the interest you will receive only the APR on the account because you will not enjoying compounding of money. The APR is typically lower than the APY because of the lack of compounding.
Q: My credit union offers a "loan skip-a-payment", what is it and should I do it?
A: Some credit unions offer “skip-a-payment” on consumer loans. There can be a fee or a volunteer donation for this service. The skip-a-payment service lets the consumer skip the scheduled payment that has been agreed upon by the credit union. The loan continues to accrued interest and will extend the loan maturity at least one or more months. If the member is comfortable knowing the interest continues to accrue and the loan maturity lengthens, the member can participate.
Volunteering at your Credit Union
Q: I want to volunteer at my credit union, how do I do that?
A: The best way to become involved with your credit union is to first attend an annual meeting. This will show you the democratic nature of your credit union and give you more knowledge about the various volunteer opportunities. If interested, then contact a volunteer of your credit union. Each committee will require a different set of skills and have various time requirements. You may be better suited to one committee than another.
Q: What volunteer positions are there at a credit union?
A: Management of the credit union is carried on by volunteers and staff.
Because of the democratic nature of credit unions, a meeting of the
credit union’s membership is held annually. The annual meeting
is when members of the Board of Directors are elected. Depending on
the bylaws of each credit union, members of the credit committee and
supervisory committee may be elected at the annual meeting or may be
appointed by the Board.
Q: What is a credit score and how does it affect my loan’s interest rate?
A: Your credit score is calculated from the information on your credit report. Everyone with a credit history has a credit score. The score is an indicator of how likely you are to repay your loan and make your loan payments on time. There are several different credit scoring systems in use and your credit score may vary from credit union to credit union.
The better your credit score the easier it will be to get the loan you want with a low interest rate. If you have a poor credit score you may not be able to get the loan you want or you may have to pay a higher interest rate.
Your credit score may also be used by your automobile insurer to determine what your insurance premium will be or if they will continue to provide you with insurance. This is just one more reason why you should check your credit report for accuracy and completeness.
Filing a Complaint
Q: I need to file a complaint, what is the process?
A: The KDCU may be able to assist members of credit unions or consumers if the credit union has violated a regulation or law. KDCU may not be able to assist when the member is not satisfied with a credit union’s policies, practices or services when no law has been violated or to resolve factual or contractual disputes.
Normally a completed complaint form is required from the consumer in
order to start the investigation process. This form may be acquired
on this website or you may call the KDCU office to discuss your problem
and a form will be mailed to you if needed. Once this form is received
with other supporting documents, the complaint will be reviewed and
an investigation will be conducted.
The next Credit Union Council Meeting is scheduled for June 12 at the Department of Credit Unions, 109 SW 9th Street, Suite 610, Topeka, KS 66612
|Department of Credit Unions 109 SW 9th Street Suite 610 Topeka, KS 66612 Phone: 785-296-3021 Fax: 785-296-6830 E-mail: email@example.com|