In March, Preferred Credit Union awarded to members its first-ever patronage dividend, a total of $200,000 to 18,330 members—or roughly 75% of its 24,500 members.
“We had a terrific year, and [because of] that, along with the money we received back from the NCUA Share Insurance Fund, we felt it was only fair we share the rewards with our members,” says CUES member John Yeomans, CEO of the $170 million CU in Grand Rapids, Michigan.
The credit union, a client of CU*Answers, a CUSO in Grand Rapids, used the company’s software to calculate various possible payouts.
“This was particularly helpful, knowing that we could tweak the payout,” explains Yeomans. “We ended up selecting the parameters so that any member who had earned interest on the deposit side or paid interest on the loan side would receive a dividend. We decided on awarding 2.25% of the interest paid on a member’s loan balances and 2.25% of the interest received on their deposits. The minimum payout was $5, capped at $250 per member. We also paid a minimum of $5 to all of our youth members.” The payout was accompanied by an explanation of the program. Members loved it, says Yeomans.
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