Bonus Dividends Truly Differentiate Us From Banks

I’d like to comment on all these large bonus dividends credit unions are doling out. Here at Power FCU we have given back over $1 million each year for the past three consecutive years and over $5 million in the last seven years. The $1 million giveback represented 4.75% of the total 2005 interest received on loans (interest rebate) and the same 4.75% of the total 2005 interest paid on deposits (bonus dividend). In my opinion, a major responsibility of all board members is to oversee the credit union’s financial health and net worth position. When a credit union’s net worth ratio exceeds 10% (as described by Greg Smith in the front page story of your Jan. 4 issue), I believe that the declaration of a bonus dividend and interest rebate should be the No. 1 priority of all board members and should be made an agenda item and discussed at a board meeting at least annually. The board process of declaring an interest rebate and bonus dividend is categorically and undeniably what makes us different than a bank because we pay our excess net income back to our membership whereas a bank would pay its excess profit back to its stockholders. I cannot see anything else in what we do as a credit union that makes us so totally different than a bank. John D Wakefield President/CEO Power Federal Credit Union Syracuse, N.Y.