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The case for cooperation
Cooperation between credit unions and other types of co-ops has diverse objectives and takes different forms, from one-on-one partnerships to larger alliances. The time is right for co-ops of all sorts to join forces, say some observers.
“The cooperative community in the U.S. hasn’t worn the cooperative label on its sleeve,” says Bill Oemichen, president/CEO of the Cooperative Network—a multistate association with offices in St. Paul, Minn., and Madison, Wis. “Now more cooperatives are beginning to do that.”
The public is ready to notice. Oemichen points to a Cooperative Network survey of Wisconsin and Minnesota consumers’ attitudes toward co-ops, which showed they consistently preferred to do business with member-owned organizations rather than other businesses. The survey was done before the current economic crisis. “Now more than ever, people are looking for an alternative to the current financial structure in this country,” Oemichen says.
“For credit unions to work most effectively with other co-ops, they have to take that first step and proudly say, ‘We’re a financial cooperative,’ ” says Adam Schwartz, vice president of public affairs and member services for the National Cooperative Business Association. “That’s their differentiator in the marketplace.”
Still, some credit unions are ambivalent about their co-op identity.
“What I hear from some managers is that consumers don’t care,” says Kevin Lytle, vice president of marketing and product management at Western Bridge Corporate Federal Credit Union, San Dimas, Calif. He also serves on the National Cooperative Business Association’s committee for the International Year of Cooperatives, and he’s the other person from the U.S. credit union movement who completed the Master of Management in Cooperatives and Credit Unions program at St. Mary’s University.
“Credit unions have to decide,” Lytle says. “Do they really believe the cooperative structure and seven principles are important? Are those going to be the main sail that powers us forward or an anchor we drag behind?”
The Federation’s Rosenthal believes the smart answer is for credit unions to embrace their
co-operative heritage and engage with other
co-ops. Those actions can help credit unions grow and attract new members. Sure, he says, credit unions can promote, for example, that they don’t charge debit card fees. But what if tighter margins force some credit unions to impose such fees in the future?
Those kinds of selling points might come and go. The true, lasting differentiator to present to consumers, Rosenthal contends, is that credit unions are cooperatives at their core.
“We’re all about equal participation and equal control in governance,” he says. “People need to hear that. Otherwise, the anger we now see aimed at a financial system that’s not working can turn into despair and cynicism. The fact is credit unions have a constructive, positive alternative for people looking for another way to manage their finances and enable opportunity. That’s a powerful message.”
2012: Year of the Co-op
The United Nations has declared 2012 the International Year of Cooperatives (IYC) to raise public awareness of this alternative business model that puts people first, innovates to meet member needs, creates jobs, and provides local services.
“Not the least of these benefits are the services offered through credit unions providing members with affordable loans and a safe place to save their money,” says Bill Cheney, CUNA’s president/CEO.
“2012 is an opportunity not to be missed,” adds Alistair Scott, managing editor of Canada’s CU Newswire, noting the difficulties that continue to afflict the for-profit banking world.
“This year is the time for those who know about credit unions to spread the word about them in a personal, one-to-one way,” says Scott in a recent online forum post.
The IYC officially launched in late October in New York City, attended by representatives from local, national, and international credit union organizations.
As a “catalytic force,” cooperatives build economic power, create opportunity, and enable communities to compete in a global economy, say U.N. officials.
The World Council of Credit Unions (WOCCU) website (woccu.org) offers a forum for credit unions to share plans and ideas about cooperative services—and to celebrate their uniqueness—during 2012.
The Cooperative Principles
There are seven cooperative principles—guidelines by which co-ops in all sectors put their values into practice—recognized by the International Cooperative Alliance:
1. Voluntary and open membership.
2. Democratic member control.
3. Member economic participation.
4. Autonomy and independence.
5. Education, training, and information.
6. Cooperation among cooperatives.
7. Concern for community.