We hear it every day. Credit unions are better than banks. We’re “People Helping People.” We’re “Not for profit, not for charity, but for service.” It’s all about the “credit union difference.”
So what does the “credit union difference” mean? It means that we are a not-for-profit financial institution. We’re not non-profits. We have to have the money to invest in new technology for our members, pay our staff, invest in training & development of our employees and board, and so much more. We need earnings. We just don’t need profits to pay hundreds of thousands to our board members. And we’re not beholden to our stockholders and board members to provide hefty returns.
As an aside, the average Bank of America board member earned $390,000 per year in total compensation for its 2021 fiscal year. And according to the 2021 Wells Fargo proxy statement, their highest paid board member earned $534,633. Things that make you scratch your head. And that’s just the tip of the credit union difference iceberg.
The credit union difference also means that we have deeper care and concern for the communities we serve – and we operate with the best interests of our members based on the eight cooperative principles. Even as the principles have evolved since they were first introduced in 1844, they still form a solid foundation for all cooperative businesses around the world.
From the International Cooperative Alliance, “Cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others.”
That’s all nice to know, but who cares about the credit union difference? There are three key groups who should not only know what the credit union difference means, they should also care deeply about it.
- Your Employees: Let’s face it. Some employees work at the credit union because it’s a way to pay their bills. Imagine if your new employee program included a discussion about the cooperative principles and provided examples of how your credit union lives those principles every day? A job would become a career. And a career could become a passion for credit unions. Knowing the history of your credit union is one step. Living the philosophy of the cooperative principles is where we need to aim with each of our employees.
- Your Board: As your board embarks on their 2023 strategic planning journey, consider a discussion around the cooperative principles. Consider how your decisions are impacted by these principles. They can become a north star to guide you toward deeper concern for community (Principle 7) and diversity, equity and inclusion (Principle 8). If you find your board and leadership team celebrating an ultra-low delinquency rate, discuss whether you are truly living your social responsibility and caring for others. Are you balancing the business (risk) with the heart of what makes credit unions different financial providers? Are you living by the principles upon which your credit union was founded? We’re People Helping ALL People. It’s time to start living that way.
- Your Members: While we’re educating our staff on the credit union difference, there’s an even bigger opportunity to educate our members. Imagine having a brief presentation you show to every new member when they sign their membership card? We could shift the conversation from “I didn’t know I was a member” to having a vast force of members as passionate as Kristen Christian. (She was the woman behind Bank Transfer Day in 2010.) Knowing how credit unions are different will help members become more loyal to you if they start to get lured away by offers from alternative financial providers. We’re more than a free t-shirt and a parade float. We need to be our own best advocates with our existing and potential members.
You need a team that is passionate about the ways in which they can make a difference in the lives of their members and their communities. My team at CU Difference is passionate about helping your team recognize that working for your credit union is more than a job. From optimizing the member experience to building staff capability, we have developed programs that will teach your team how to act on the credit union difference. Reach out to learn more about growing a culture based on the credit union difference.