On a sweltering summer day in late June 1977, I walked through the back doors of CUNA’s Filene House in Madison, Wis., to begin what is now a 35-year career in the credit union movement. I had been a credit union member since college, but I didn’t have a clue that credit unions were much more than just a different way of saying “bank.”
On that first day I was given a copy of “The Credit Union Movement,” by J. Carroll Moody and Gilbert C. Fite. My boss also told me to spend time browsing through the bound volumes of Credit Union Magazine that went back to the early 1930s.
The magazine was then named The Bridge because credit unions were designed to provide a bridge from economic hardship to economic opportunity.
Now that the movement has surpassed $1 trillion in total assets and the number of members soon will exceed 100 million, does our history still matter? Is it still relevant?
Credit unions have been so successful that Americans of all income stripes and colors have access to cooperative financial institutions whose primary mission is service and not profit. Our current legislative battles are just the latest in a century-long war to extend the credit union option to as many Americans as possible.
Just as early credit unions served as a bridge for working men and women to what became the great American middle class, we must continue to evolve as a necessary strategic response to the economic times in which our members live today.
Credit unions’ future will require nimbleness and innovation. Some will argue that looking too often in the rearview mirror prevents us from seeing both opportunities and obstacles ahead. They might argue that history serves only to pigeonhole credit unions as niche institutions designed to play a limited role.
Banks certainly believe that to be the case. Note their perpetual state of hysteria when it comes to anything that hints of credit union empowerment. Their heavy-handed campaign to prevent Congress from raising the cap on member business lending is just the latest salvo in an endless campaign of aggression against credit unions.
Our history as financial cooperatives defines us like nothing else. History provides meaning and purpose to our future.
It’s why the public and Congress supported credit unions in 1997 when a U.S. Supreme Court ruling threatened consumer access to credit unions. That threat triggered a strong and united response that enabled credit unions to pass the Credit Union Membership Access Act in only a few months.
NEXT: The past is essential to the future
The past is essential to the future
There are three elements to history:
What happened usually is indisputable. Why it happened and the present and future significance of what happened are complex and almost always debated.
There never will be complete agreement on the relevance of history, but a coherent narrative is possible if context and perspective are provided and debated.
Without context, history becomes fertile ground for mythology or propaganda. Mythology can, to some degree, unite us by providing common ground on which we express pride in our past and in who we are.
As the newspaper editor in John Ford’s classic movie, “The Man Who Shot Liberty Valance,” said, “When the legend becomes fact, print the legend.”
But history as propaganda is dangerous, and no nation or population is immune to propaganda pushed by leaders, mainstream institutions, or the media. History without context also becomes fertile ground for demagoguery.
We can pay simple homage to our founders and pioneers by posting their sepia-toned pictures in our lobbies and offices. Or we can reprint and frame the powerful Joe Stern political cartoons from the 1920s and 1930s that captured the imaginations of Americans as they learned about credit unions.
But hanging pictures on the wall or putting coffee-table books in our reception areas is akin to treasuring pictures and memorabilia from family ancestors whose stories we’ve forgotten. Value is not always measured by time alone.
The spark that ignited the first credit union fire is as hot today as it was in the beginning, when credit unions were vehicles of socioeconomic reform.
Credit unions were born in the U.S. during the Progressive Era of the early 1900s. Forward-thinking Republicans and Democrats working together recognized that industrialization, immigration, and urbanization were three massive forces drastically affecting the quality of life, so they initiated a series of social, political, and economic reforms that forever altered the American landscape.
During the next three decades, credit unions grew steadily, but slowly, as one state at a time enacted the necessary enabling legislation. Their sole purpose was to provide American workers and their families with a vehicle to practice thrift, build their savings, and have access to affordable credit to be used prudently and responsibly.
Credit unions were designed to be a bridge to economic opportunity and economic justice. “Not for profit, not for charity, but for service,” was one of the movement’s earliest mottos.
Credit unions often were the sole agents available to average men and women as a way to accumulate assets and build wealth. But it took an economic collapse and the Great Depression to accelerate credit union growth. A second reform movement known as the New Deal led to the passage of the Federal Credit Union Act in 1934.
The movement’s founders created a national association the same year, and soon every state had a league that helped create credit unions by the thousands during the following three decades.
The number of credit unions peaked at 23,000 in 1969, but consolidation has led to economies of scale and greater capacity to serve our members. Assets and members have soared.
Credit unions were integral to the nation’s greatest era of economic stability. They helped create the great American middle class that ensured financial stability for untold millions of households.
Today, the middle class is struggling. Median household income has been stagnant or in decline for several decades. Unemployment or under-employment is increasingly common in many once-secure households.
There’s a growing gap between the jobs that will pay well in the future and the number of workers with the requisite education to get those jobs. The ranks of America’s poor are on track to climb to levels unseen in half a century, according to the U.S. Census Bureau.
A tepid economic recovery, the ongoing possibility of a slip back into recession, and a government safety net that is becoming increasingly frayed means the need for credit unions is as great now as it was in 1908 or 1934.
History matters because what we’ve accomplished in the past helps us see what we need to do in the future. We must continue to tell the credit union story of where we’ve been and where we’re going. We must continue to work for legislation and regulations that help credit unions build passionate and enduring public support.
As successful as the credit union movement has been, the general public fails to fully grasp the importance of a not-for-profit, cooperative business model. Too many consumers are not members and have, at best, a vague understanding of credit unions.
Or if they became members through an indirect channel such as auto lending, they may never fully grasp the benefits of long-term membership unless they learn more about our history and our values and why they’re still relevant.
NEXT: Building the structural framework
Building the structural framework
Credit unions are a well-kept secret from many Americans, even though the term “credit union” resonates positively for those familiar with our history. Credit unions have always struggled to build a stronger brand, nationally.
But it hasn’t been for lack of effort—the National Advertising Program, the National Marketing Program, and the National Branding Campaign were all major initiatives that eventually faded away for lack of funding. Leagues have sponsored state-wide programs that have been met with mixed success.
Why do those failures continue to haunt us and why is it essential we try again? Consider how people process information: What people say, how they act, what they support, and what they dislike depends on how they think.
Linguists and cognitive scientists tell us we think in a deeply embedded psychological manner at the sub-conscious level. We think more emotionally at this level than rationally.
We use what linguists call structural frames that simplify our thinking. We think metaphorically because metaphors simplify how we think.
Credit union pioneers used metaphors such as “bridge” or “crusade” to paint simple pictures of credit unions and their purpose.
Frames and metaphors can be positive, negative, or neutral. Banks are an “industry.”
The structural frame for “industry” includes words such as commerce, business, productivity, and work. Credit unions are a “movement.” The structural frame for
“movement” includes words such as progress, action, or change.
Both words carry dissimilar structural frames, and metaphorically people think differently about credit unions than they do banks.
That’s why credit unions historically have been able to rally members to their cause when they’re threatened. Many members have built positive structural frames for credit unions because of their experiences.
Credit unions aren’t viewed as callous, bottom-line-driven institutions that care primarily for profit. Nor are credit unions viewed as institutions that helped drive the world to the brink of financial collapse a few years ago.
Credit unions are the “minutemen” or guardians of American households as depicted in a famous Joe Stern political cartoon—one of many commissioned in the 1920s by Edward Filene and Roy Bergengren to craft a positive public opinion of credit unions.
Our history matters a great deal because it helps build the framework that people rely on when they think about credit unions.
Activists, politicians, propagandists, and marketers are particularly adept at using frames and metaphors to mold thoughts. Our movement’s founders worked diligently to build a framework around which the public could construct a popular image of credit unions compared with their competitors. They were master marketers.
The reality, of course,is that banks are often better than their public images. Banks can do wonderful things, but few people would use the metaphor of a white hat when talking about banks as they do when talking about credit unions.
Now the challenge is to take the positive, emotive framework that many apply to credit unions and build upon it to rally more people around the kind of momentum generated last fall by Bank Transfer Day.
Our history is deep and meaningful, and the movement’s history is integral to the history of each credit union. Our employees and volunteers need that understanding.
A credit union is not just another choice in the marketplace; it’s part of a beautiful tapestry whose threads are our diversity in common bonds and our commonality of mission to serve all Americans. We can’t afford for our history to be ignored, misunderstood, or poorly taught.
If we don’t understand and communicate our history, how can we expect our members to appreciate its relevance in terms of how we operate, the products and services we offer, and how we price and deliver them?
We need to build a broader structural framework than what currently exists—one that appeals intuitively to all Americans. Otherwise, we must constantly re-educate the public. A good and positive structural frame that sways public opinion requires personal experience, plus consistent exposure to repetitive marketing and brand messaging.
History matters because history is not just about the past. History is the ongoing accumulation of human experience and knowledge upon which we build current and future actions.
History is dynamic. It’s a vibrant force that guides our future course. Credit unions were designed as vehicles of reform, and we must continue to focus on reform if our past is to influence our future.
We must touch the human heart if we’re to provide a purpose to our existence that goes beyond profit, or even service. That’s why our history matters.