“Credit unions just may have a powerful weapon in their battle for market share – but a lot don’t fully appreciate it”, said Paul Stull, CEO of the Credit Union Association of New Mexico.
He elaborated – “Banks often have ready access to capital to fuel growth. Credit unions don’t.” But, according to Stull, they have access to something just as good: “Credit unions have access to the power of the cooperative. They can share ideas, technology, employees. They can enjoy great value through cooperation.”
“Cooperation is critical to survival, especially for small credit unions,” said Tom Kane, CEO of the Illinois Credit Union League.
When Stull talks of cooperatives, he means more than just other credit unions. He pointed to everything from rural, electric co-ops to food stores and agricultural cooperatives.
The affinities are enormous. A credit union is about its community. Ditto for a rural, electric co-op and an agriculture co-op. A big bank or electric utility, first and foremost, is in business to profit its shareholders. The cooperatives that compete with them have entirely different DNA, where community service is at the essence of the organization. That’s huge.
And that’s why hunting for ways to work more closely with cooperatives is good for a credit union, also for its community.
Just as it is good for other cooperatives. “We are always talking about this, looking for more ways to cooperate with other co-ops,” said Martin Lowery, Executive Vice President of Member and Association Relations at the National Rural Electric Cooperative Association. “We encourage partnerships,” said Lowery, who added that his organization works with CUNA and also CUNA Mutual, on shared interests.
Some of the best cooperation are barebones business practices. Stull said he knows of cases where multiple credit unions share the same CEO – and, in the bargain, they have access to a more seasoned executive than they might otherwise have.
As another case in point, in Illinois, Kane said his organization sponsors various peer groups where credit union executives get together to brainstorm issues and solutions, involving everything from marketing tactics to compliance issues.
It can still get more exciting. Last November Greensboro, North Carolina, in a section of town classified as a food desert because it had been without a grocery store for years, brought the Renaissance Food Cooperative. “Self-Help Credit Unions Venture Fund played a central role in making this happen,” said Jeff Hardin, Director of Cooperative Initiatives at the Carolinas Credit Union League.
Then it got better still. Jerry Wise, CEO of Greensboro Municipal Credit Union, said his institution decided to get involved in the same neighborhood. “Our involvement came as a result of conversations that RCC and Self-Help Credit Union had with the city of Greensboro. After personally seeing the overall lack of access to financial services in the community, coupled with hearing about day-to-day issues faced by residents, like the lack of transportation, it made sense to site a branch in the community.”
Now Greensboro Municipal Credit Union is opening a branch in the same shopping center. It is also offering membership to employees of the food co-op. Said Wise: “Some of the employees are unbanked, and RCC has pledged to cover the $25 share deposit that will help their workforce gain financial service access.”
Hardin stressed that these kind of alliances have to make good business sense for the credit union – but he stressed that in many instances, the business logic can be found.
Yet if all this is so good, a big question has to be asked: “Why aren’t many credit unions taking advantage of the cooperative difference,” asked Stull. “Many credit unions forget the bonds they have with other co-operatives. The power of the bonds are underappreciated.”
Hardin, in North Carolina agrees that awareness can be raised and his league uses an idea that is brilliant in its simplicity. At an annual conference, the league put out a snack table that was entirely filled with nibbles from co-operatives, such as Cabot Cheese, Blue Diamond Almonds, Land o’Lakes Butter. “We want people to understand there are fundamental differences between cooperatives and other kinds of businesses and this help gets the message across.”
He added that he also wants people to think before they shop and use cooperatives wherever possible.
Carlos Calderon, CEO of the OAS Staff Federal Credit Union, said an idea he has been mulling over is putting together a task force – involving credit unions and cooperatives – to explore how to work together for mutual benefit. He envisioned a cooperative offering credit unions a small discount on their purchases, for instance. “We need to sit down and come up with a practical pilot.”
Chris Roe, Senior Vice President at CUNA Mutual, talked about the importance of cooperatives banding together to get across – to the public as well as legislators – how cooperatives are different and why that matters. “We all have the same model and the same principles. We need to advocate for that.”
All of this becomes highly personal. Are you using cooperatives in your personal and business life? Can you use more? Do you talk up the benefits of buying, say, Cabot or Tillamook cheese – precisely because they are not only good cheese, they are products of cooperatives?
That’s where change begins – at the personal level. But in this sphere, small steps can lead to big gains – for credit unions in particular, and cooperatives, in general.