One of the benefits of credit unions is that credit union profits are paid back to their members. If a credit union has a good year and its reserves and capital are in excess of what is necessary, it will often make a special end-of-year payout (dividend) to its members. A credit union will typically determine the amount of the payouts based on how much deposits and loans a member has with the credit union.
In the years after the financial crisis, these bonus dividends haven't been common. Just like banks, credit unions' profits were hurt by loan losses, weak loan demand and low investment returns.
Last year I reported on six credit unions that had bonus dividend payouts for 2013. I was only able to confirm 2014 bonus dividend payouts for five of these six credit unions.
Some credit unions may have not yet reported the year-end bonus dividend. Also, some credit unions are late in publicly posting the news. If your credit union has announced a 2014 bonus dividend, please leave a comment.
Most bonus dividends are small, but if a member has a large savings and/or loan balance, bonuses can be significant. DFCU Financial reported a payout to one member of $18,000. What's the largest dividend bonus that you have ever received from a credit union? Did you have a large savings or loan balance?
Below are a few credit unions that I have been able to confirm a 2014 bonus dividend. Thanks to DA members Pearlbrown and Dave9354 for posting on some of these in the forum.
- DFCU Financial in Michigan reported a year-end payout to members of $24 million. That’s $1 million more than the previous year. With 214,993 members, that comes out to $112 per member. According to the credit union, "more than 100,000 members" are receiving this payout, and "In 2015, members received an average CASH BACK direct deposit of $250 and the largest reward totaled $18,000."
- Guardian Credit Union in Alabama reported interest rebates and dividend bonuses totaling more than $800,000 (up from $785,000 last year). With 41,512 members, that comes out to $19 per member. According to the credit union "More than 20,000 members received money during this "cash back," many which received more than $1,000."
- Eastman Credit Union in Tennessee reported an $8 million "Extraordinary Dividend" (up from $6 million last year). This is the 18th year of the dividend. With 152,141 members, that comes out to an average of $53 per member. According to the credit union, the dividend is based on "In early 2015, ECU members can expect a record breaking $8 million dividend for their loyalty in 2014."
- Citizens Equity First Credit Union (CEFCU) in Illinois reported an "extraordinary dividend" of $40 million (up from $12 million last year). With 304,709 members, that comes out to an average of $131 per member. The credit union thanked, their members "for helping make 2014 a tremendously successful year, and enabling a record $40 Million Extraordinary Dividend."
- Founders Federal Credit Union reported a "Loyalty Dividend" of $5.7 million (same as last year). With 200,726 members, that comes out to $28 per member. According to the credit union, "Founders Federal Credit Union distributed a $5.7 Million Loyalty Dividend to its members on December 1. The Loyalty Dividend posted to approximately 93,000 qualified member accounts, based on their relationship with the credit union."
- Dow Chemical Employees' Credit Union in Michigan reported that "members in good standing will receive a rebate of 75% of the total interest they paid on eligible loans during 2014, an additional 75% of dividends earned on shares and deposits during 2014 and check card rebates that include 0.125% of signature-based transactions and one cent for each PIN-based transaction during 2014." I wasn’t able to find a total dollar amount of the payout in the credit union’s press release. The credit union has a total of 56,999 members.
- Empower Credit Union in New York reported a "$2.5 million bonus dividend and interest rebate". With 137,413 members, that comes out to $18 per member. According to the credit union "The amount will be automatically credited to members on January 1st. Giveback represents a percentage of savings dividends earned+ and a rebate on the loan interest paid* throughout 2014."
With an improving economy and rising loan demand, we should see more of these dividend payouts in coming years. However, credit unions are spending more these days on things like advertising. So it may never again be as popular as it used to be.