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Corporate Understandings: Finance

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There is one truth of finance: it is impossible to define simply. It’s too broad, too encompassing. Trying to narrow its intentions seems therefore to be a futile thing. The field is endless; its consequences are infinite; and the necessity of it can’t be questioned. It is too massive to understand.

It’s essential therefore to limit financial understanding to singular elements, such as corporate finance and what it represents.

Explained simply, corporate finance is the quest for stability. Specific companies and individuals rely on professionals from this field to manage their money and ensure that it is applied correctly. Corporate finance is the analysis of every dollar. It involves calculating expenses and determining budgets. The goal of corporate finance is to maximize the potential of every business by predicting any potential risks and learning how to avoid them and maximizing returns.

Corporate finance is the foundation of any business. Without it there would be no understanding of how companies are to use their profits and subsequently gain more. Every penny earned must be examined. Those within the field are certain to look for every possible value. Corporate financing is necessary for the success of all companies, even companies like a payday loan lender or bank. Corporate finance shapes the results of each quarter for each company. Corporate finance increases rewards. Corporate finance reduces risks. It must therefore be recognized for its contributions in an arena as vast as the study of money.

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How Credit Unions Make Money

You ever wonder how credit unions make their money? It is to some degree a puzzling question, as there’s no known product they’re actually selling except to offer a service which is, simply put, putting your money into a bank account. So what does the union gain from that? How do they stay in business and make a profit? The fact is credit unions in fact do have a product that they’re essentially selling–your money!

Yes, it’s an easy sell when you walk into a credit union with the intention of opening an account and putting money in. Here’s the thing, though: when you do that, you essentially give the union a foundation for selling loans, certificates of deposit, investments, and other such products. The interest they collect on some of those payments is how they make money. And the more accounts they have, the more products they can sell to keep that money in the bank. Of course, a lot of their decisions would be based on the reliability of the individual taking a loan out–but that’s another story.

Foreclosures are an excellent way to turn in profit as well; however, management of said properties is a must, so banks and credit unions often hire outside firms such as Scottsdale property management companies to manage the foreclosed properties while the bank is in the process of selling them. When the union sells the foreclosed property, that’s a stockpile of cash right there! The amount of profit gained is what makes it possible for unions to provide interest on savings accounts for their customers. The money, astonishingly, doesn’t grow on trees for these companies! Sometimes it seems like they do, though. It is always important to be well informed on the process of some companies, particularly banks and credit unions. After all, we’re doing business with them!

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Credit Union Security

Established in 2005, the Credit Union Information Security Professionals Association (CUISPA) has become an important resource in the credit union industry’s IT security and risk management departments.

Members of CUISPA gather via webcasts, local meetings, and conferences to discuss strategies to broaden risk management practices and to network with others. According to their website www.cuispa.org, the association “is a progressive national association of IT professionals, from both large and small credit unions, dedicated to improving IT risk throughout the industry.” They focus on every type of credit union from the nation’s largest down to some of the most local.

CUISPA’s mission is to spread knowledge among credit union professionals and to network to share ideas, facilitating cooperation within the industry. From professionals to vendors, the idea is to improve each credit union’s efficiency and effectiveness, making IT security and risk management more affordable. The association does not endorse specific services, products or vendors, but strives to maintain an impartial stance. In order to qualify for membership in CUISPA, companies must be nominated by existing members of the association. They must also agree to its specific terms and conditions, code of ethics, and privacy policy. Above all, Affiliate Members must show commitment to the credit union industry.

Credit unions can report suspicious activity directly to CUISPA for a detailed follow-up investigation. Alerts are linked to the association’s Fraud Alerts Forum, which is available for all registered credit union employees to view and discuss. In the most critical cases, the association hosts national webcasts to put awareness out into the credit union community.

The Credit Union Information Security Professionals Association has been a vital source of loss prevention, credit card scams, wire transfer frauds and the like. Due to their quick notification and national awareness, fraud is stopped before losses can occur. This makes them a vital asset in the credit union industry.

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Credit Union vs. Bank Fees

Credit union members immediately notice the benefits of lower fees for financial services. There is generally a higher rate of return on your savings account than even the largest banks offer, and lower interest rates on loans make it more affordable to borrow money.

Since a credit union is a not-for-profit cooperative, members enjoy lower fees than average. The following is a quick comparison of credit union and bank fees:

ATM fees – On average, banks impose a $1.40 charge for an out-of-network ATM transaction. This can really add up for anyone who travels a lot or simply doesn’t have his or her bank’s ATM in a convenient location. Credit unions, on the other hand, charge around 99 cents. This may seem like small change, but ATM fees can add up quickly.

Credit Card fees – On average, banks charge between $25 and $30 for a credit card balance that goes over-the-limit. For larger national banks that fee can go as high as $40. If a credit union member exceeds the spending limit on his or her credit card, the credit union will charge, on average, $12.82. No small change there.

Checking account fees – Most banks don’t bother with offering free services to customers, but nearly two-thirds of credit unions will offer at least one free checking account to members who open a share draft account.

Overdraft fees – This fee can be huge with the larger national banks. Bank of America charges $35 if a customer has an overdraft, per transaction. So a customer can quickly accumulate $105 in overdraft fees in just three purchases if he or she is unaware of the overdraft. Credit unions tend to charge around $11 per overdraft, so even three overdraft transactions won’t equal the one fee charged by the larger bank.

Non-sufficient fund fees – Credit unions charge, on average, $3 less than the national average.

To determine specific amounts, check with your local credit union.

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Finding a Good Credit Union

A nice alternative to large banks that many people have come to enjoy are credit unions. Credit unions differ from the common banks in the fact that they tend to give more personalized service. While they may not hold all the usual conveniences you will find with banks, they are a nice alternative if you want to hold your finances with a company that actually cares. Here is a look at how to go about finding a good credit union.

How to Find a Good Credit Union

Since credit unions generally do not advertise chances are you will have to do a bit of research to find the one that is right for you. The best way to go about finding a good credit union is simply by asking around. Look to co-workers, friends or family members for their suggestions and advices. Chances are, you will be able to find at least one person who does their financial handling with a credit union and they will be able to give you advice on how to get in.

Another excellent way to go about finding a good credit union is to turn to the internet. With most people online these days banks and credit unions will usually have a website linked to their company. Simply type in what area you are in with the words “credit union” and you should be able to find the ones that are local to you. There are even special websites dedicated just to helping potential customers find a credit union closest to them.

Last but not least, if you belong to a church or other type of organization that has anything to do with religion, check with them. Often times these places have their own credit unions and they will be able to give you the information you need in order to do your finances through them.

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Getting Low Interest Rate Loans

Whether you are applying for a loan for a new house or a new car getting a low interest rate can save you hundreds, if not thousands of dollars. Most finance companies will try to give you an interest rate much higher than what you qualify for. However, there are ways to try getting a low interest rate loan. Here is a look at some of these methods.

Low Interest Rate Loans: How to Get One

The first step in getting low interest rate loans is to be educated on what sort of credit you have. If you have poor to fair credit you will want to either give yourself some time to try to improve your credit score or educate yourself on what sort of interest rates there are available to people with mediocre credit. Once you are familiar with what is on your credit report and you are aware of what your score is you are then able to take the necessary steps to improving your credit and when you go to apply for the loan there will be no surprises.

Next, when applying for a low interest rate loan, make sure you have researched at least 3-5 different companies before applying. Look at finance companies websites and become familiar with how they finance and what sort of rates they are offering. Each company is different so shopping around and investing a little bit of time into researching each one may save you a lot of money in the end.

Once you have found a finance company you are interested in, look on their website and see if they offer an online application. Usually after you have applied someone will call you back with the results or they may require additional information. It can also never hurt to try to see if you qualify for a lower interest rate by simply asking the representative.

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Getting a Loan Through a Credit Union

In need of a loan? If you have not already looked, consider looking to a credit union to get your loan financed! Many people make the assumption that they have to go through all kinds of difficult processes in order to get a loan through a credit union but it is actually easier than it looks. Here is some information on getting a loan through a credit union.

Getting a Loan Through a Credit Union: What To Do

The first and most important step of getting a loan through a credit union is that you have to be a member of that credit union. If you have not already done so, check to see what sort of requirements they have for their members to do their financing with them. Each credit union is different. If you find that you do not meet all the requirements they have, simply look to a family member or friend who is a member and ask them to refer you.

Once you have gotten into the credit union you will want to speak with one of their employees to give you instruction on what to do next as far as applying for a loan. Since there are different types of loans available they will likely go over each one with you and help you determine which one is right for your situation.

When going to get a loan through a credit union it is always best to have all your information ready. This means if you are going to buy a car you will need to have your insurance information, your current vehicle information as well as employment verification. The credit union may also ask for references. Having all this information with you when you go to apply for the loan will make the process not only smoother but go more quickly as well.

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Credit Unions: How They Differ from Banks

While both banks and credit unions have their advantages and disadvantages, there are major differences between the two of them. Most people are not aware of the differences or how each type of institution will handle their financial business. Here is a look at credit unions and how they differ from banks.

How Credit Unions Are Different from Banks

The biggest difference between credit unions and banks is the fact that when you join a credit union you become an actual member instead of just another client. To join a credit union you must first meet certain qualifications. These qualifications may range from belonging to certain religious organizations, employed by certain companies or knowing someone such as a family, friend or coworker who is currently a credit union member themselves. When it comes to doing financial business with a bank, generally you will just need to open a savings account or checking account. You are also their customer rather than a member. At credit unions as a member you will actually own a small part of the credit union.

Another way how credit unions are different from banks is in the fact that they usually offer lower interest rates. These lower interest rates may result in saving you up to thousands of dollars a year depending upon what sort of loan you apply for.

Credit unions also do a better job of protecting your assets. Most credit unions offer special protection plans on financial investments making it safe to trust them with your money.

Last but certainly not least, a huge difference between banks and credit unions is that credit unions offer better customer service. Credit unions work hard to ensure you and your investments and financial business are well taken care of. This type of service is making them more and more popular as time goes by.

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Credit Unions: What Are the Conveniences?

If you are considering joining a credit union or have thought long on transferring your financial business to one you may concerned over whether or not they offer the same sort of conveniences that traditional banks do. Here is a look at credit unions and what sort of conveniences they offer their members.

Customer service is at the top of the list of conveniences that credit unions offer. While banks may treat you as a valued customer, with your credit union you are actually a member instead of just a customer. Credit unions and their employees work very hard to ensure that members are happy with how their financial business is handles but they also are concerned with working with each member on an individual basis and seeing how they can best serve them and their financial needs.

Credit unions are also very convenient because they offer lower fees and interest rates to their members. These lower interest rates and lower fees will actually save members lots of money throughout the year. Many banks charge large amounts for certain bank activities whereas credit unions have little if not no fees for some of the same activities.

Credit unions also offer a majority of the same type of services that banks offer. Many offer online banking services that allow you to check your account online as well as make transfers, pay bills and apply for loans.

In addition to all the above conveniences, many credit unions also offer free checking. While some banks claim to also offer free checking, they tend to charge other fees that are very high.

When thinking about joining a credit union it is best to look around at a few local credit unions and determine which one suits your financial needs. It is also a good idea to see what sort of requirements they have to join.

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Finding a Credit Union

This sign, displayed at all credit unions, inf...
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You’ve made up your mind that it is time to leave your for-profit bank for a credit union. Now you need to find a credit union. For some the search is easy: Many companies, unions or other groups have their own credit unions.

However, for those of us who don’t, there are several Internet directories that make it easy to find credit unions with open enrollment.

In the USA, the National Credit Union Administration (NCUA), is the Federal agency that charters credit unions. It also administers the NCUSIF, the fund that insures the deposits of credit union customers. The NCUA has a directory of credit unions on their website. The simple search lets you display a listing of all credit unions by state. The advanced search function lets you narrow the results by city, name, membership restrictions, and more. The tool is available at http://cuonline.ncua.gov/

Credit Union Central of Canada is a national trade association of credit unions in Canada. Canadian Central was mandated by the Canadian Parliament to provide liquidity and advocacy to credit unions throughout the country. Their search screen allows you to find a credit union branch or ATM from one of their more than 400 member credit unions. Their search tool is available at http://locator.cucentral.ca/

In the United Kingdom, the Association of British Credit Unions Limited (ABCUL) is a trade association that represents about 70% of the credit unions throughout England, Scotland and Wales. They maintain a tool to find a credit union at http://www.findyourcreditunion.co.uk/

If you elsewhere in the world, the World Council of Credit Unions (WOCCU) is the advocacy group and global trade association of credit unions. On their website they maintain links to the organizing association for the nearly 100 countries that have credit unions, from Afghanistan to Zimbabwe. The WOCCU listings can be found on their website at http://www.woccu.org/memberserv/intlcusystem

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