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WEST PALM BEACH, Fla. – End of year patronage dividends have become a tradition for some credit unions, but are they good for members? Increasingly credit unions are awarding dividends based on member usage of both deposit and loan products, thus rewarding those members who rely on the CU the most. But there are two schools of thought on dividends. Some say since credit unions should be giving back as much as they can to members throughout the year by offering the best rates on savings and loans, they shouldn’t be in a position to award large dividends at the end of the year. Others say a dividend is a good way to show that members are indeed owners and differentiates them from for-profit financials. Also, for balance sheet reasons, interest rate changes, etc., credit unions are likely to build up surplus funds and what better than to give it back to members. This is the subject of the next Credit Union Times’ voting poll. The question is as follows: “Should credit unions award members large patronage dividends at the end of their fiscal years?” * Yes, it rewards members who use the CU as their primary financial institution and shows the CU difference, * No, that money should be given back throughout the year via better rates, * Not sure.

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