Special Report: America's CU Conference

Seven Principles of Highly Effective CUs

CUs should leverage their cooperative principles to grow and thrive.

June 21, 2011

Credit unions can grow and thrive using their cooperative principles, attendees learned Monday during an America’s Credit Union Conference Discovery breakout session conducted by speakers from CUNA Mutual Group and BECU.

Many credit unions develop principle-centered initiatives and generate positive economic results for their members, the community, and the credit union itself, says Jennifer Kuhn, CUNA Mutual talent management and recruiting director (above right).

“Credit unions are unique in the financial services space with their cooperative model,” she says. “Leveraging the credit union difference can help generate growth and financial success.”

Deborah Wege, community affairs manager at BECU and executive director of the BECU Foundation, told the audience about BECU’s support of Express Credit Union in King County, Wash.

Express Credit Union provides low- and moderate-income families with affordable financial services as an alternative to payday loans and check cashers. BECU works with Express Credit Union to expand its capital and extend its influence to immigrant and low-income families in the Puget Sound region.

“Not only does BECU’s sponsorship help the members of Express Credit Union, it enhances the ability of BECU to do our cooperative part in strengthening our underserved communities,” says Wege.

This example demonstrates two of the seven principles of highly effective credit unions: concern for the community and cooperation among cooperatives.

Kuhn and Wege shared the seven principles of highly effective cooperatives developed by the International Co-Operative Alliance, and challenged attendees to develop a cooperative, purpose-driven credit union. The principles are:

1. Voluntary and open membership. Cooperatives are voluntary organizations, open to all people able to use their services and willing to accept the responsibilities of membership without gender, social, racial, political, or religious discrimination.

2. Democratic member control. Cooperatives are democratic organizations controlled by their members who actively participate in setting policies and making decisions. The elected representatives are accountable to the membership.

3. Members’ economic participation. Members contribute equitably to and democratically control the capital of their cooperative. Members allocate surpluses for any or all of the following purposes: developing the cooperative, benefiting members in proportion to their transactions with the cooperative, and supporting other activities approved by the membership.

4. Autonomy and independence. Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.

5. Education, training, and information. Cooperatives provide education and training for their members, elected representatives, managers, and employees. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of cooperation.

6. Cooperation among cooperatives. Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional, and international structures.

7. Concern for community. While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.

Cooperative principle learning is at the core of the National Credit Union Foundation’s Credit Union Development Educators (CUDE) Certification program. Kuhn and Wege are Credit Union Development Educators, representing the CUDE Advisory Council.