THE CREDIT UNION DIFFERENCE In this time of accelerating change, it is important to truly understand how credit unions are unique and different, and why we remain a necessary and extremely popular financial alternative for millions of Texans. Credit Unions are democratically owned and controlled institutions, based on the "people helping people" philosophy. Credit unions are not-for-profit financial cooperatives. Unlike most other financial institutions, credit unions do not issue stock or pay dividends to outside stockholders. Instead, earnings are returned to our members in the form of lower loan rates, higher interest on deposits, and lower fees. Credit union boards of directors are elected by members; each member has an equal vote, regardless of how much he or she has on deposit. Only credit union members may serve as directors. Volunteers are an important credit union resource. By current state and federal statute, credit unions cannot serve the general public. People qualify for a credit union membership through their employer, organizational affiliations like churches or social groups, residence in a particular geographic area. Credit unions do pay taxes - payroll taxes, sales taxes, real property and personal property taxes. Congress exempts credit unions from federal income taxes. The exemption was established in 1937, affirmed by statute, and re-affirmed in 1998 in H.R. 1151, the Credit Union Membership Access Act. Federally chartered credit unions are regulated by the National Credit Union Administration (NCUA), an independent agency. NCUA’s three board members are nominated by the President and confirmed by the Senate. State chartered credit unions are regulated by the Texas Credit Union Department (TCUD) which is governed by the Texas Credit Union Commission (TCUC). The TCUC’s nine members are appointed by the Governor and confirmed by the Senate. No taxpayer money is used for regulating and overseeing credit unions, as all activities of NCUA and TCUD are funded by credit unions. As of December 31, 2003, the Texas Credit Union Department oversees 241 state chartered credit unions serving more than three million members with total assets over $18 billion. Additionally, the 241 credit unions had more than $11 billion in loans and more than $15 billion in shares (deposits). The average asset size of a state chartered credit union is $74 million with 140 credit unions having less than $20 million in assets. Federally chartered credit unions make up the majority of credit unions in Texas. As of December 31, 2003, there were 426 federally chartered credit unions serving roughly four million members with over $27 billion in assets and approximately $17 billion in loans and more than $23 billion in shares (deposits). In terms of total assets, credit unions continue to have a small share of the market. Nationally, financial institutions hold over $9 trillion in assets. Credit unions only hold approximately 7% of these assets, or $612 billion. Credit unions exist to help people, not make a profit. Our goal is to serve all of our members well, including those of modest means - every member counts. Our members are fiercely loyal for this reason. They know their credit union will be there for them in bad times, as well as good.