Consumer FAQs

Consumer FAQs

• What is a credit union?

  A credit union is a not-for-profit financial co-operative and is owned by its members. Credit unions can and do operate to produce a profit making this type of organization different from a non-profit organization. Credit unions do not pay income tax.

  Credit unions are formed and chartered based on an association that individuals have with one another, such as: place of employment, place of residence or membership in an organization. To join a credit union you must be within the credit union's field of membership. Credit unions offer a range of financial services and products that vary from credit union to credit union. Credit unions can be chartered either by an individual state regulatory agency or by the federal regulatory agency, the National Credit Union Administration. 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.

  A member’s deposit in a credit union entitles them to a share in the cooperative. The member receives a dividend, typically quarterly, based on the amount of money deposited. Dividend rates and loan rates vary depending on the policies of the individual credit union.

  Credit unions are governed by a committee of member-volunteers who receive no compensation for their service. These volunteers are organized into a Board of Directors, a Supervisory Committee and a Credit Committee.

  Credit unions are unique among other financial institutions because its members are co-owners in the cooperative. Members work together to run the credit union with the main purpose to provide a means of thrift and borrowing for each member. Only a member of a credit union can deposit money and receive a loan.

• How can I find a credit union to join?

  You can use the Credit Union search resource 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 for a listing of credit unions. Your local phone directory should also list credit unions in your area.
  

• How can I join a credit union?

   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.
  

• Can I join more than one credit union?

  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.
  

• What protections do I have as a member of a credit union?

  The National Credit Union Administration provides protection for credit union member deposits and potential members. 
  

• How do I know if my credit union is safe and sound?

  Similar to banks, all credit unions are required to file a report of financial condition, known as a Call Report, at least quarterly. The call reports for all credit unions are available through the National Credit Union Administration.
  

• How much of my deposits are insured and who insures them?

   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.
  

• What penalties do I pay to redeem a CD before the maturity date?

  A Certificate of Deposit (CD) is a deposit that requires you to keep the money deposited for a certain time period. 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.
  

• How do I determine how much interest I pay on a loan?

  The amount of interest you pay on a loan depends on several factors: the rate of interest charged on the loan, how that interest rate may change over the term of the loan, the frequency and timing of loan payments, the amount borrowed and the term of the loan. The concepts are referred to as the Time Value of Money and also apply to the interest earned on a deposit in an interest bearing account. You can find loan calculators on the Internet or you can contact your credit union for assistance.
  

• What is the Annual Percentage Yield (APY) and why is it sometimes different that the Annual Percentage Rate (APR)?

  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. The APR is typically lower than the APY because of the lack of compounding.
  

• My credit union offers a "loan skip-a-payment;" what is it?

  Some credit unions offer “skip-a-payment” on consumer loans. There can be a fee or a voluntary 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 accrue interest and the loan maturity will extend at least one or more months. Your credit union can provide you with the terms to participate.
  

• How can I volunteer at my credit union?

  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, follow up with credit union staff.
  

• What volunteer opportunities exist at a credit union?

  Management of the credit union is performed 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 the Board of Directors are elected. Depending on the bylaws of each credit union, members of committees, including credit and supervisory, may be elected at the annual meeting or may be appointed by the Board. 
  
  If interested, contact staff of your credit union.

• What is a credit score and how does it affect my loan interest rate?

  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 and your score may vary from credit union to credit union based upon which system they utilize.

  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 low credit score, you may have to pay a higher interest rate.

• How can I file a complaint?

  The KDCU may be able to assist credit union members if the credit union has violated a regulation or law. KDCU will 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 member in order to start the investigation process. This form can be found 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 supporting documents, the complaint will be reviewed and an investigation will be conducted.