A Statement of Differentiation

Credit unions in general, and Stark Federal Credit Union in particular, differ from other financial services providers in two aspects – the aspect of structural differentiation, and the aspect of market differentiation.

Structural Differentiation:

Stark Federal Credit Union is a member-owned financial cooperative. Those that have accounts at the credit union are called members; every member, regardless of the amount of funds they have on deposit, has one ownership share, and one vote annually to elect fellow members to the credit union’s Board of Directors. Though these directors have full fiduciary responsibility in terms of governing the credit union, they are not compensated; they operate in a voluntary capacity. Because of this structure, the credit union is chartered as a not-for-profit corporation by the Internal Revenue Service, and is therefore for the most part exempt from taxes on its net income.

For-profit financial institutions seek to maximize the profitability of their owners or shareholders, which sometimes means that they can’t act totally in the best interests of their customers. The credit union’s mission is to maximize the profitability of its member-owners, which also happen to be the credit union’s “customers.” Therefore, Stark Federal Credit Union is able to maximize the profitability of its members by returning the profits of the cooperative to them in the form of charging lower rates on loans, paying higher rates on deposits, and charging less fees than other financial service providers.

Market Differentiation:

There are four pillars that comprise market differentiation, which is defined by the way credit unions differentiate themselves through participation in public affairs. They are as follows:

Financial Literacy Educational Outreach:

Credit unions undertake the responsibility to provide personal financial education both to their members, and within their communities. Stark Federal Credit Union practices financial literacy educational outreach in the following ways:

• NEFE – High School Financial Planning Program
  Throughout the school year Stark Federal Credit Union focuses on bringing financial education into the school districts by offering the NEFE program.
  
  Created by the national Endowment for Financial Education (NEFE), this program is a six-unit course that acquaints students with basic financial planning concepts and illustrates how these concepts apply to everyday life. Students study topics such as the time value of money, earning an income, protecting assets, establishing and prioritizing financial goals, understanding the wise use of credit, developing a spending plan, and saving money.
  
  The program materials are at no cost to the school districts and Stark Federal Credit Union handles the ordering, shipping and delivery of materials.
  

• JA – Junior Achievement
  Throughout the school year an employee of the credit union will volunteer to teach an eight week financial education course to students in the local public schools. The program is sponsored by Junior Achievement, Inc. The courses are designed to educate students about their personal skills and interests. They learn job-seeking skills, how to explore career options, and practice personal and family financial management.
  

• Contributes to the Chapter scholarship fund
  

• Seminars on estate planning and ID fraud
  

• Reviewing and advising members on budget and cash flow matters
  

• Review of current insurance or investment portfolios
  Planning/projecting asset accumulation needs (retirement, purchases, education, etc.)
  

• Planning for wealth transfer (charity, children)
  

• Assistance evaluating and obtaining financial products necessary to meet planning goals

Social Responsibility and Outreach:

Credit unions perform a variety of activities in their fields of membership and their communities in order to contribute to the greater good of the community. Stark Federal Credit Union practices social responsibility and outreach in the following ways:

• Shred it event
  Both members and non-members are invited at no cost to bring their personal documents containing sensitive information.
  

• Contribution to school programs in return for advertising
  

• Coats for Christmas
  Members are asked to bring in their gently worn coats, gloves and hats to be donated to needy people in Stark County.
  

• Collect contributions of food and other items for the Humane Society.
  

• Employee contributions thru dress “down” or dress “up” events; American Heart Association, Hunger Task Force, Children’s Miracle Network, Community Christmas, Battered Women’s Shelter
  

• Individual employees participate in neighborhood Heart Association and cancer drives and mailings

Civic Involvement:

Credit unions have a responsibility to actively participate in the civic affairs of their communities, in order to be considered as good corporate citizens, and to enhance the stature of the communities in which they do business. Stark Federal Credit Union practices civic involvement in the following ways:

• Chambers of Commerce – Alliance, Canton, Jackson-Belden
  

• Heart/Cancer Walks – Many Stark Federal Credit Union employees participate in the annual American Cancer Society 5K walk to benefit the fight against breast cancer
  

• HOF balloon festival

Political Advocacy:

The fourth pillar of market differentiation, political advocacy has a twofold purpose. First, it acts to keep public officials at the local, state and federal levels aware of the enhancements that credit unions create for their members and their communities by virtue of their active involvement in the first three pillars of market differentiation. Secondly, political advocacy aims to help preserve and strengthen the credit union charter at the state and federal levels in order to allow credit unions to continue to provide the positive economic benefits that are available to members and potential members as a result of our structural differentiation. Stark Federal Credit Union practices political advocacy in the following ways:

• By actively participating on the Ohio Credit Union League Government Affairs “Key Contact” program.
  

• By actively participating in OCUL and Chapter-sponsored advocacy-oriented events, such as the Chapter Legislative Night.
  

• By actively developing relationships with the state representative and state senator that represent the credit union’s house and senate districts.
  

• By participating in one-on-one and group meetings with officials at all levels of state and local governments in order to ensure that they are fully aware of the economic and social good that accrues from credit unions’ differentiation efforts.
  

• By sending letters and E-mails to selected legislators as encouraged and aided by NAFCU.
  

• By being active contributors at the staff, management and Board levels to the Ohio Credit Union League Political Action Committee, and at the corporate level to the Ohio Credit Union Defense Coalition, in order to ensure that the movement’s advocacy efforts can continue to keep the credit union movement strong, which in turn economically benefits citizens both in Ohio and nationally.