Home > Credit Union Philosophy > How have credit unions tried to protect their members against costs due to bankruptcy?

Question: How have credit unions tried to protect themselves and their members against unforeseen costs due to loan defaults or bankruptcy?

Answer: In a financial cooperative, losses caused by one member affect all members because credit unions are forced to make up costs by raising loan rates and reducing dividend rates. Credit unions have a major advantage over many other financial service providers in that the people who receive loans from their credit union are member owners and, thus, have a greater sense of loyalty to the credit union. Credit unions also work hard to help members plan for their future financial health — not just their immediate desires. As a result, credit union “write off” or default rates are, on average, lower than that of banks.

If credit unions feel it is necessary, they will also pursue reform of current laws and regulations. This was the case in 2004–2005 when credit unions lobbied for bankruptcy reform. Currently many credit unions are working hard to help their members restructure troubled debt.

About Us

Network Governance
Full Staff Listing
Credit Union Chapters

Contact Us

Credit Union Jobs


CU PolicyPro
Fraud Resource Center
Compliance Training Tools


Advocacy &
Government Relations

     National Programs
     State Programs

Government Relations
     Montana Government
     Federal Government Affairs

Political Action

Community Development 


Conferences and Trainings
Distance Learning
Financial Literacy for Volunteers


League Service Group

Directly Provided Services
Group Benefit Trust

Communications & PR

Credit Unions in the News
President's Report
Photo Galleries
Network News
News Archive

Credit Union Directors

The Director's Job
Volunteer Recognition
Helpful Resources
The Blog "A Direct Line"


Find a Credit Union Near You
ip of the Week
Topic of the Month
Reciprocal Check Cashing

Montana's Credit Unions

Credit Unions in the News
Credit Unions for Kids
Credit Union Philosophy