Credit unions have been around for decades. Like cooperatives around the world, credit unions are financial cooperatives that have the same seven core principles and values used in the International Cooperative Alliance in 1995.
In essence, the Seven Cooperative Principles are a set of philosophies and values that guide credit unions and cooperatives in fairness, equality, and mutual self-help.
You’ll often find cooperatives involved in business in different industries. And although their businesses differ, they all share a common goal — a commitment to serving and improving the lives of their co-op members.
Though the principles have been slightly changed and updated from their original form, many credit unions still follow them and are part of their mission to serve their members.
The Seven Cooperative Principles
1st Principle: Voluntary and Open Membership
Voluntary and open membership follows the importance of people choosing voluntarily to participate in and commit to the cooperative they choose. This way, they are involved with others to achieve shared social, economic, and cultural needs and aspirations. With that, this principle is an expression of the right to freedom of association.
2nd Principle: Democratic Member Control
Cooperatives are democratic organizations operated by members who participate in setting policies and make clear decisions. With that, they follow the concept of democracy, where members follow a majority decision-making process. With this, rights and responsibilities are big considerations.
3rd Principle: Member Economic Participation
In cooperatives, members contribute equitably to the capital of their cooperative. With that, members often receive limited compensation as part of the condition of membership. This benefits the members since they can create portion transactions instead of investing in huge capital.
For credit unions, members recognize benefits in proportion to their financial transactions and general usage. This is because unions often have better rates, services, and fees than for-profit financial institutions.
4th Principle: Autonomy and Independence
Autonomy and independence focus on the relationship of cooperatives with national and international governmental organizations. With this, the integrity of a cooperative as an autonomous and independent organization follows the co-op values of self-responsibility, democracy, and self-help, making the co-op enterprise sustainable.
5th Principle: Education, Training, and Information
Seeing as cooperatives mold and guide their members, they provide education and training services for them to contribute effectively to the development of the cooperative.
Credit unions often spotlight educational opportunities for their members and ensure the general public is informed about the benefits, structure, and nature of the cooperative.
6th Principle: Cooperation Among Cooperatives
Cooperation is an essential value of solidarity in cooperatives. It pushes members to effectively strengthen the cooperative movement by working together in local, national, regional, and international structures.
With this in mind, they aren’t only stuck in their cooperative but also focus on creating a stronger unit, encouraging engagement and trade with other cooperatives.
7th Principle: Concern for the Community
Community is a huge priority for cooperatives. This is why they create sustainable structures and policies that will help the growth of their communities. Even when focusing on their members’ needs, they also help develop communities without discrimination, applying policies created and accepted by the members.
The Bottom Line: The Seven Cooperative Principles Help Mold Institutions
There’s no denying the effectiveness of the Seven Cooperative Unions, especially with credit unions. Seeing as the principles are focused on a more altruistic approach, these policies are created to help benefit members and the public, allowing them to contribute to society and develop communities.
How Can We Help You?
Good Neighbors Credit Union is committed to serving a diverse membership. From under-served individuals to those stronger individuals seeking accessible and stress-free banking alternatives, we got you covered.
We offer a range of products, services, tools, and resources that empower our members to take control and manage their finances, inspiring them to reach their fullest potential. Are you looking for a credit union in Lancaster? Reach out to us today!