Press
Report quantifies benefits of cooperative partnerships
WASHINGTON, DC (March 16, 2015) — The Credit Union National Association (CUNA), the National Credit Union Foundation, the National Cooperative Business Association (NCBA CLUSA), and the Filene Research Institute are pleased to announce the release of a new report quantifying the business case for credit unions and other cooperatives to engage in mutually beneficial partnerships with each other. The report can be downloaded at this link.
“As leaders in their communities credit unions are a natural fit to work with other cooperatives,” said Jim Nussle, president and CEO of the Credit Union National Association. “We share a common set of business principles that guide our work for the betterment of our members and community.”
About 35% of credit unions have community Fields of Membership (FOMs), making them readily able to accept cooperatives as members, i.e., as borrowers and/or depositors. Many credit unions without community FOMs may also be able to accept cooperatives as members through membership in select groups.
“Credit unions are not financial institutions that happen to be cooperatives. They are cooperatives that happen to be financial institutions,” said Mark Cummins, president & CEO of the Minnesota Credit Union Network and Chairman of CUNA’s Cooperative Alliances Committee. “This report shows that credit unions and other cooperatives are natural business partners and would greatly benefit from working together.”
Recognizing the tremendous potential for economic benefits that credit unions could reap from developing more business relationships with other types of cooperatives, the CUNA Cooperative Alliances Committee sought to demonstrate this potential with data. The Committee partnered with the National Credit Union Foundation, the National Cooperative Business Association and the Filene Research Institute to undertake research and analysis to examine this.
Funded by a grant from the Foundation, Filene conducted the study and announced the results of the project at a recent meeting in Washington, D.C. Credit union and cooperative leaders met about how they can follow up on and use the results of this research, including: cross-promoting membership; sharing physical space, such as locating credit union branches or ATMs at or next to non-financial cooperatives; cross-marketing efforts such as co-branding credit cards; and shifting cooperatives’ current and future deposits and borrowing from commercial banks to credit unions.
“This is about quantifying the business opportunity between credit unions and co-ops,” said Mike Beall, president and CEO of NCBA CLUSA. “It’s a ‘no-brainer’ for credit unions to ask for co-ops deposits and loans, and a ‘no-brainer’ for co-ops to make the switch to credit unions from banks. NCBA CLUSA is committed to making this happen.”
Gigi Hyland, Foundation Executive Director said, “the Foundation is proud to support this project as we know the power of cooperatives and credit unions working together will help improve more people’s financial lives.”
“There’s an incredible opportunity for cooperatives and credit unions to come together. On deposits alone, credit unions could help co-ops earn hundreds of millions of additional dollars every year,” said Mark Meyer, CEO of the Filene Research Institute. “But credit unions have to tell that story better, and this report is a great step in that direction.”
In 2014, non-financial cooperatives in the U.S. had about $300 billion in assets. These cooperatives range across a broad variety of sectors, including utilities ($149 billion) and farm-related ones ($83 billion). Non-financial cooperatives would benefit from broadening their potential sources of credit and financial services. As cooperatives themselves, credit unions are a natural destination, instead of commercial banks, for non-financial cooperatives’ deposits.