I don’t have a crystal ball, but one thing seems certain: The next 50 will be quite different from the past 50.
For me, answering the question starts with remembering how credit unions came to be in this country around the time of the Great Depression.
The nation’s financial system had shut down. Hard-working people were out of work. And if you had a financial emergency, you had nowhere to turn for a helping hand.
But people came together in their workplaces, towns, and churches to find a solution. They pooled their money into a community fund to borrow from if they needed help—and to pay back when they could.
Credit unions were born because they filled a void in the market—helping people when nobody else would. Credit unions made small-dollar loans—very small-dollar loans—to people in need.
If the banking system hadn’t broken down in the 1930s, you have to wonder if there ever would have been a reason to create credit unions. But there was a reason, and credit unions grew as a result, in both number and size.
Today, credit unions are no longer the only lender in town and have largely moved away from small-dollar loans. Many competitors also make loans and provide deposit accounts.
Credit unions went from being the only choice, to just one of dozens, maybe even hundreds, of service providers. Many of our competitors have superior cost structures and access to a lot more capital for cutting-edge innovations. So, we ask ourselves whether credit unions are still relevant in today’s world.
It’s a good question.
I wish I had the answer, or could identify the silver bullet that will make Americans swarm back to credit unions as they did in the early days. But I don’t have either. Not yet.
I do believe, however, the Holy Grail for credit unions lies in seeking cooperative solutions to life’s challenges—and not necessarily the ones centered exclusively on members’ financial needs.
I know researchers are investigating the relationship between people’s financial health and their physical health. Credit unions might evolve to enhance their members’ lives in more ways than just in the pocketbook.
If we focus more on how we serve members—harnessing our cooperative principles—and not on the what—almost exclusively providing financial services—we might find an answer.
Does our future rely on our ability to provide cheaper checking accounts and lower cost mortgages? Or is it in helping folks take control of more than just their financial futures?
Our history of serving members in ways that no one else is willing or able to can be an example for our future. The engine that drives us is the not-for-profit, cooperative model.
In the early days, we gave people small-dollar loans because no one else would. What will we do for members in the future? Find the answer to that, and I believe we’ve found the answer to credit union relevancy for the next 50 years.
DOUG FECHER is president/CEO of Wright-Patt Inc. CU.