As a year-end token of thanks, this one is huge.
Sacramento-based Golden 1 Credit Union is announcing today that it will “give back” $18 million this week to more than 500,000 of its members statewide.
Officials of the California Credit Union League said it could be the largest giveback ever by a credit union in California, if not the country.
“We’re doing this for our members following a series of very successful years,” said Golden 1 President and CEO Donna Bland. “As a not-for-profit financial institution, we’re driven by doing what is best for our members. This $18 million is just one of the many ways we are thanking our members.”
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Eligible recipients in Golden 1’s “Member Giveback Distributions” program will receive anywhere from $5 up to $1,000 per consumer loan account or savings account. On that basis, a Golden 1 member who is both a borrower and a saver could receive up to $2,000.
The credit union said distributions will be deposited directly into members’ accounts on Wednesday. The distributions are calculated as 10 percent of the loan interest paid and 10 percent of interest earned on savings accounts, between Jan. 1 and Sept. 30 this year.
Unlike banks, not-for-profit credit unions do not offer traditional shareholder dividends. But they do, in good years, return what they call “bonus” dividends or “patronage payments” to their members.
Golden 1 has not reported year-end earnings for 2014, but last year it reported net income was up nearly 24 percent, as of Dec. 31, 2013, compared with year-end 2012. At the end of 2013, it reported nearly $8.2 billion in total assets.
Tina Ramos-Ingold, spokeswoman for the California Credit Union League in Ontario, said staff members researched how much money credit unions had given back through distributions nationwide. They found some total payments in the $10 million to $15 million range, “but we didn’t find $18 million. That’s a pretty high number.”
Not all of Golden 1’s 700,000 members will benefit. Members who are solely checking account holders, for example, are not eligible for the giveback program.
Bland said this was not the first “giveback” by Golden 1, which bills itself as the nation’s sixth-largest credit union in terms of members. In 2002, Golden 1 distributed around $10 million, she said.
Claes Bell, senior banking analyst with Bankrate.com, said that giveback programs are another way for credit unions to build customer loyalty.
“You can definitely see that it’s an opportunity to reward loyal members, and it’s very important for (credit unions) to hold on to that long-term commitment, not just accounts but (for) mortgages, car loans and that kind of return business,” Bell said. “If they’ve made a lot of money over the last few years, that is something they can do with that money.”
Bell added that he could not recall a credit union payback as large as $18 million.
On its website, Golden 1 has been keeping its dividend news a secret, urging its customers to check back Wednesday “to see just how thankful we are.” It also noted that customers could follow the credit union on Facebook and Twitter “for the big reveal.”
Golden 1 noted that giveback distributions may be taxable, and members will be mailed 1099 and 1098 IRS tax forms.
With 80 branches, Golden 1 says it’s California’s largest credit union in terms of members and locations. It’s the state’s second-largest in terms of assets.
The statewide league said there are 370 credit unions in California, with nearly 10 million members and combined assets of $146.6 billion. For more information, go to golden1.com/giveback.
Call The Bee’s Mark Glover, (916) 321-1184.