Your Cooperative and Capital Credits

As a member of the Red River Telephone cooperative, you are the recipient of patronage capital credits on your Red River Telephone account. The questions and answers below will help you understand your cooperative, how it differs from an investor owned utility, and what capital credits mean to you.

What is a cooperative and how does it differ from an investor-owned utility?

What are capital credits?

Do I receive interest on capital credits?

Can my capital credit allocation be applied to my telephone account?

When are capital credits paid to members?

How do I claim capital credits from an estate?

Q. What is a cooperative and how does it differ from an investor-owned utility?

A. A cooperative is a unique type of business that is owned by the members it serves. An investor-owned utility is owned by investors which may be located anywhere and are not necessarily the customers it serves. A cooperative is organized for the purpose of providing quality services to its members at a reasonable cost. Red River Rural Telephone Association is a cooperative owned by its members. All profits are allocated to our members in the form of capital credits.

Q. What are capital credits?

A. Capital credits are the amount allocated to each member from the cooperative's profits. The amount of your capital credit allocation is determined by the amount of business you do with Red River Telephone each year and the company's profit for that year.

Q. Do I receive interest on capital credits?

A. Under the Articles of Incorporation, no interest shall be paid on capital provided by the patron.

Q. Can my capital credit allocation be applied to my telephone account?

A. No. Capital credit allocations are not cash until such time as the Board of Directors chooses to retire them. Once a decision is made to retire capital credits, checks are issued and distributed to all members who had service with the co-op in the year or years being retired.

Q. When are capital credits paid to members?

A. Capital credits are allocated annually. At the discretion of the Board of Directors, allocated capital credits may be retired (paid out in cash). At that time, the allocated capital credit balance that the Board has elected to retire becomes available to the member or former member as cash. Until the Board of directors chooses to retire the credits, they are not available to the member as cash. One exception to this is at the death of a member, a former member, or in the case of a joint membership, the member's spouse.

Q. How do I claim capital credits from an estate?

A. Contact Red River Telephone for information on documents that will be required such as a death certificate. 

If you move, it is important to keep Red River Telephone informed of your current mailing address for any future capital credit mailings.