The Vital Need for Co-ops
The cooperative movement has made its impact around the world.
I ran across this headline in a recent roundup of credit union-related news: “Members approve credit union merger.”
The story described how members of Yakima (Wash.) Valley Credit Union approved a merger with Catholic Credit Union (also of Yakima). The result was a combined credit union with $471 million in assets and nearly 50,000 members.
The headline and story serve as concrete evidence of the difference between cooperative credit unions, and banks and other financials.
After all, when was the last time you read “Bank customers approve merger”?
You haven’t, because it just doesn’t work that way for banks and their customers. For credit unions and other cooperatives, “democratic member control” is one of the principles by which they operate.
It’s a principle that credit unions and other cooperatives celebrate. And, at the end of this month, cooperatives around the world will start a year-long observance of the principles, history, and benefits of cooperatives.
That’s when the International Year of Cooperatives kicks off, highlighting the contribution of cooperatives to socioeconomic development, in particular recognizing cooperatives’ impact on poverty reduction, employment generation, and social integration. CUNA has been invited to the opening ceremonies in New York later this month, and I know credit unions will be well represented.
The cooperative movement has made its impact around the world, but particularly here in the U.S. Nearly 30,000 U.S. cooperatives operate at 73,000 places of business, according to research sponsored by the National Cooperative Business Association (NCBA) through the University of Wisconsin.
Further, they own more than $3 trillion in assets, and account for nearly $654 billion in revenue, create more than two million jobs, with $75 billion in wages and benefits paid. That’s a total of $133.5 billion in value-added income.
This is a significant group of entities, by any measure.
But the economic and financial statistics tell only a small part of the story. The impact cooperatives have on people’s lives is the most noteworthy. It’s reflected in the International Year’s theme—“Cooperatives build a better world.” That’s a theme we’re also tying in to this year’s International Credit Union Day on Oct. 20.
Take the case of Hope Credit Union in Jackson, Miss., which stepped in to fill a void on behalf
of its community.
This summer, a local regional bank announced plans to close nearly two dozen branches in and around the area Hope Credit Union (Hinds County, Miss.) serves. The bank was the only financial institution in two small towns in the county, Edwards and Utica.
So, Hope agreed to try to fill the void left by the departing bank. It operated a membership drive out of the Utica City Hall to establish an area branch. But, the ultimate decision to establish that branch depends on the people, who must commit to opening accounts. The credit union estimates it needs $7 million in deposits and 500 members each in Utica and Edwards to open viable branches, news accounts report.
Members’ economic participation is, of course, another key principle for cooperatives. For Hope Credit Union CEO Bill Bynum, it’s the defining principle as the community builds support for the two branches. “Hope’s success and the future of financial services in these towns will ultimately be decided by the people in these communities,” he told a local newspaper.
Perhaps not all credit unions are in a position to do what Hope is attempting to do. But credit unions find all sorts of ways to support their communities of members—not the least of which is providing members with af-fordable loans and a safe place to save their money, at no or low cost.
So, beginning late this month and throughout 2012, take time to celebrate cooperatives, and your credit union’s place in the cooperative movement. The International Year of Cooperatives gives us all a chance to spotlight what we are, how we operate—and the difference credit unions make for their members, cooperatively.
BILL CHENEY is CUNA’s president/CEO.