Can you imagine a court ordering a person to pay $5,000 in interest on a $150 loan?
It seems shocking today, but it actually happened. It was an event that provided the impetus for Alphonse Desjardins, a Canadian, to found North America’s first credit union in 1901. He was convinced that common people deserved the opportunity to access capital, and that by pooling their resources, they could improve their lives.
More than a century later, it makes sense to reflect on our movement, and to ask ourselves whether we’ve measured up to the dreams of visionaries like Desjardins, merchant-philanthropist Edward Filene, and the “Mother of Credit Unions,” Louise McCarren Herring. These are the pioneers who helped credit unions take root and grow in North America.
My answer would be a qualified “yes”—that we continue to fulfill the credit union vision and remain relevant. Most credit unions remain true to the cooperative credo at the heart of our movement. We’re sharply focused on our mission and the needs and concerns of our members.
Most credit unions are responding to member calls for comprehensive financial products and services, technological innovations, expanded access, personalized service, and customization. Many of us can now meet virtually all of our members’ financial service needs—beyond the dreams of the credit union movement’s architects.
But let’s be honest: Not everybody’s on board. Unfortunately, some credit unions saddle members with higher-than-necessary costs that mask poor management, and some fail to provide even rudimentary financial education.
It doesn’t have to be that way. I’m a future-focused person, but the answer to this problem is found in our past. Today’s conditions are different, but our founding cooperative spirit is as vital and relevant now as ever. Our success, as individual credit unions and as an industry, depends on our capacity to collaborate and innovate.
No credit union, alone, has the resources to secure our collective future. Like our forebears, we must pool our resources—creatively, technically, and financially—to ensure that we continue to evolve our businesses and embrace the changes remaking the financial services world.
Technology continues to shift our paradigms. Even the concept of collaboration must be viewed more broadly than in the past. Many of us share within our organizations and even with other credit unions. Our challenge, however, is to fully deploy technologies available now, and those on the horizon, to collaborate more fully and effectively.
But many businesses today are struggling to partner with the ultimate collaborator: the consumer. This is an area where credit unions have a big advantage, since they’ve always been member-owned cooperatives.
Credit unions are better positioned than most financial providers to include consumers in the conversation about what our product offerings ought to be and how we should deliver them.
One thing is certain: Credit unions’ future will be dramatically different than the present. Technology will continue to focus our service philosophy. For-profit banks will redouble their efforts to challenge credit unions’ nonprofit exemption from federal income taxes.
It’s not much of a stretch to predict some credit unions won’t make it. And many others will consolidate—joining forces with like-minded, similarly focused peers to offer more benefits to members than they could standing alone.
Whatever form our business takes, the future belongs to those who consistently put members first—demonstrating the cooperative, people-helping-people values that inspired our beginnings.
TERESA FREEBORN is the president/CEO of Xceed Financial Credit Union, El Segundo, Calif.