We can’t let go of that. Indeed, we have to reinvent it. We are sophisticated institutions now, and it is easy in the whirl of days to concentrate on the likes of boosting membership, generating more retained earnings, and increasing the loan portfolio.
But that is not why we started, and that is not why we should exist. We came into being to challenge the status quo and to improve the financial lives of persons who were mainly shut out of reasonable services.
The Old Ways Worked
Our purpose was to improve the financial lives of people. But this does not mean that we as institutions have to set our focus on our own balance sheets. Instead we can set our goals as: To do good, to help, to challenge the status quo rather then reap a larger share of it.
We discovered that by setting out to do good, to help, that our institutions could also sustain themselves well on the spread between loans and savings. We could shave this pretty thinly, return as much money as we could to savers, and still have money to hire more people, purchase computers, offer ATMs and more. By doing good, we did well.
(This is a far cry from other financial institution origins. They organized in order to make money for the organizers, the more money pocketed thereby for their own purposes the better. They might set aside some money to help a community, but this was antithetical to their main purpose.)
We Can Do Better than We Do Now
We did shake up the status quo. Common people in all geographic areas -- in urban centers, rural areas, factories, parishes, office buildings and on farms -- saw the benefit of working cooperatively one with another to improve their own lives, the lives of their neighbors and by extension their communities. Credit unions mushroomed across the land and prospered. The model made sense to people and they were willing to join. Now we have to re-envision that early period in a new way.
True, we are a subset of the financial services industry. We do much of what banks, S&Ls and others do. But if we think of ourselves only as a subset of the financial services industry then this is what we will do: merely offer loans and savings at slightly better rates. We can do better. We have done better. We must do better.
Reasons and Examples
We did the right things for the right reasons, and doing so turned out to be a popular model. We must do the right things again. There should be no other reason than that they are the right things to do. But if you need another reason, here’s one: If we don’t, we’ll just get bored and turn ourselves into banks. And if you need another: It will keep us interesting and interested; it will keep us innovative, and with that we can move forward.
Jeff Schwalen’s story in this issue about Hiway FCU helping the Hmong in St. Paul is one example of doing good. Here at GTE FCU, we also have been trying to live up to this creed. We built our headquarters building in an enterprise zone in Tampa, arguably the most needy neighborhood in west central Florida. We provided jobs and opportunity to this neighborhood. Though we cannot claim direct connection, we now see signs of development and improvement all around us. We think this neighborhood in five years is going to be one of Tampa’s best.
In addition, we formed a CUSO called Credit Union Housing Partnership (CUHP). By means of CUHP, one developer built 200 modestly priced homes here. Another took over a half-vacant deteriorated neighborhood and made 90 affordable homes. We helped finance the developer. We are going to finance the home buyers, who, incidentally, will not have to pay for appraisals (it was all done in advance) and only half the cost of normal title insurance, all for a savings of $3,000 to $5,000 per home. The need was so great for these homes that we had to have a lottery to see who would get them.
Present Course is Not an Option
If all we do is make good rates and offer good services, we are not going to exist in the long haul. We have to stretch. We have to do what we once did. We have to be creative and innovative about solving social problems.
We need to do this for our citizens and our neighborhoods. We need to do this for ourselves.