What is a Credit Union or Financial Cooperative: Part 1

Group of people cooperating at credit unionWe think credit unions are the best thing since sliced bread. But…. we might be biased. Just a little. In our experience, the more folks know about credit unions and why they are an awesome way to bank, the more they love them, too!

Seven Principles of Cooperatives

Welcome to the seven part series designed to help readers understand exactly what makes credit unions unique and special. After all, the more you know, the more confident you will be about the decisions you make for your life. Your role at DCCU is so important – together, we’re so much more than “just a bank.”

There are seven principles of any cooperative, or co-op, and each applies to Dane County Credit Union–as well as ALL co-ops around the globe.

First Principle

A cooperative is owned by its members and follows seven core principles, which were adopted in 1937 by the International Cooperative Alliance. These seven principles help guide cooperatives, and the first one is ‘voluntary and open membership.’

Of course, ‘voluntary and open membership’ means that you don’t have to join if you don’t want to! This principle also means membership won’t be denied to anyone based on class, race, sexual orientation or preference, physical status, or any other form of discrimination. However, credit unions are allowed to determine who is eligible for membership based on geographic location, employer or other similar criteria.

group of people with arms around each other practicing cooperation.


This principle also allows the cooperative to ask member-owners to pay a membership fee to join. DCCU asks new members to deposit $5 as a membership fee. This $5 remains on deposit for the entire time the account is open, but it’s returned to the member when the account is closed. It allows you to claim status of a member-owner. Different co-ops have their own membership requirements and fees.

Once you become a member-owner you can take advantage of the economic benefits of the cooperative. At DCCU those benefits include lower loan rates, higher savings rates and low or no fees for the financial services. There is a clear connection between the prosperity of the co-op and the prosperity of the member.

Voluntary membership

Membership in any cooperative is completely voluntary because citizens have the right to put their money where they please. Cooperatives willingly offer their services to those who accept the responsibilities of membership. At DCCU that means anything from simply using the credit union’s services to volunteering  to sit on our board of directors.

Other cooperatives that have  open and voluntary membership include grocery, farming or electric utility co-op–or even another credit union. Since membership is voluntary, co-ops need to entice members with a number of reasons to join. At DCCU, that means competitive interest rates, feeling connected to your local community, volunteer opportunities and a chance to be a part of a group for as long as you’d like!

Cooperative handshake

Member appreciation

In our effort to make the cooperative mission and membership advantages clear you can see why ‘voluntary and open membership’ is the first of the seven cooperative principles. It really does guide our strategic vision to make available the best services and products because we realize everyone has a choice where they bank. We’re grateful to each member who chooses DCCU!


Published by

Tom S.

Tom is a 2006 graduate of UW Madison, currently residing in Verona with his wife and 2 girls. He has been passionate about writing ever since he was 15 years old, and displays that same enthusiasm in his work today. When he’s not sharing insightful financial wisdom, you can find Tom chilling on the Union Terrace, enjoying craft beer at the Great Dane, or hiking at Governor Nelson State Park. In the Fall he loves to take his family to Badger Football games!