A Passageway to Prosperity
CUs have always been a bridge from economic challenge to economic opportunity.
We have changed the name of this column to “The Bridge” to commemorate the publication Roy Bergengren first published in the 1920s to promote the young and untested credit union movement.
The Bridge changed its name to Credit Union Magazine in the early 1960s. But in addition to its longstanding purpose, we want readers to find pride in every credit union’s history. Never forget that credit unions—above all other financial services providers—serve as a bridge from economic challenge to economic opportunity for millions of American consumers and their families.
Credit unions’ success as a passageway leading to prosperity is unparalleled. The movement today serves 94 million members, and recently crossed the $1 trillion threshold in total assets.
Cooperatives tend to form when there are gaps between what the marketplace offers and what consumers need. When the first U.S. credit union opened its doors for business in 1908, it was a bridge for struggling mill workers.
When President Franklin Roosevelt signed the Federal Credit Union Act into law in 1934, banks were closing and the unemployment rate in our Depression-ridden country was 25%. Thus, credit unions were the bridge that kept many struggling households above the treacherous waters of economic collapse.
Credit unions connect the working Joes and Janes to the middle class. And credit unions can rightly boast that they were among the essential social, economic, and political reforms that brought greater stability and fortune to this great nation.
Born during the Progressive Era of the early 1900s, credit unions were an important channel for the great energy and passion in that age for social and economic justice. That era granted women the right to vote, enabled direct election of senators rather than selection by corrupt party bosses, created the desperately needed first child labor and workplace safety laws, and restricted big business’ ability to limit competition and control access to markets.
Credit unions reached adolescence during the New Deal in the years during and following the Great Depression and World War II. This was a time when Roosevelt expounded on his “four freedoms”—freedoms of speech and religion, and freedom from want and fear.
Credit unions reached maturity long before the Campaign for Consumer Choice overturned a U.S. Supreme Court decision and won the passage in 1998 of H.R. 1151, The Credit Union Membership Access Act. This law granted millions of additional consumers the right to credit union membership through small employer groups. It was a mature and entrenched movement that enabled CUNA, the state leagues, and credit unions to bring thousands of members to Washington, D.C., to fight for their rights.
Banks like to pigeonhole credit unions. They’ve been claiming since the beginning that credit unions were designed to serve only people of modest means. The arguments heard in Massachusetts in 1909 (when lawmakers debated the first state credit union act) are the same heard today about credit unions making small-business loans.
Credit unions today continue to reach out to millions of consumers who don’t have “bank” accounts and rely on payday lenders, title loan companies, and check cashers. Their role as a bridge for consumers is exemplified in countless meaningful ways.
And credit unions also are a bridge for:
► Small businesses that lack access to capital because banks have turned their backs;
► Young Americans who can’t afford college, or lack the knowledge and skills to cope with an increasingly complex financial world;
► Working Americans who’ve seen the demise of their pensions and health-care benefits, and who must take their future security into their own hands; and
► New Americans who come to this country for the same dreams and hopes that drove all of our ancestors to America generations ago.
Credit unions are a bridge. Our founders knew this intuitively, and so should we as we live in a time when the financial challenges for households and individuals might be as difficult as those we faced decades ago.
MARK CONDON is CUNA’s senior vice president, business and consumer publishing. Contact him at 608-231-4078.