Who owns the
peanut butter and jelly sandwich? Surely this creation is as American
as apple pie, patriotism and motherhood. No one could own this everyday
staple of school lunch boxesor could they? Recently I picked
up a Smuckers Uncrustable Peanut Butter and Jelly Sandwich.
On the back of the package was patent no. 6,004,596.
a patent exists, granted in December 1999, describing a product
with a first bread layer having a perimeter surface coplanar
to a contact surface and containing a first filling
comprised of peanut butter and a second filling comprised
say that Smuckers has filed suit to enforce its rights to the peanut
butter and jelly sandwich against a Michigan firm that developed
a substitute sandwich.
in America, where concepts of ownership come in two flavors, would
this kind of reasoning appear. Either a product or service is privately
owned or it is government property. These are the two alternatives
for owning productive assets, whether they be land,
commercial assets or intellectual property.
But the credit
union modelthe cooperativedoesnt easily fit either
option. As of June 30, credit unions managed over $450 billion in
assets. Credit unions cant be bought or sold; merger requires
a majority vote of members. Moreover, there is more than $50 billion
of net worth, or members collective savings, within
the 10,000 credit unions in excess of members savings and
loans. Thats a lot of capital for no one to own.
It is also a tremendous responsibility.
people might be tempted to convert this vague, collective ownership
to private property through charter conversion, the real challenge
is to understand and exploit the advantages of this third way of
managing wealth in America.
Credit unions are creating a unique organization that combines individual
benefits with cooperative power. Outside credit unions, an individual
seeks the for-profit firm offering todays best financial deal.
But the credit union model says join us for individual service and
collective economic strength. Each member is part of a community
of common-wealth that is attempting to create more advantageous
economic opportunity now and in the future. Two
advantage to the member must be at the local credit union level.
Members should be getting a better economic deal as well as an opportunity
to participate in the credit unions future direction.
Participation certainly means using the credit unions services,
but the credit union model also promises other kinds of involvement.
Why is this participation important? How can credit
unions develop this advantage?
Recently I attended
my Vietnam Navy ship reunion. We came because we had participated
in a shared experience, albeit in our own individual ways. The enginemen
or snipes on my LST had a very different view of the ships
evolutions than did a quartermaster. An officer aboard ship as well
as on the beach experienced very different events than
did an enlisted person or the chiefs. Yet 30 years later there was
a common bond of service that everyone shared, even if there had
been no ongoing contact.
participation may seem utilitarian, not something to build reunions
around. But maybe not. I have been to many events where the speaker
shares his or her first experience with a credit union. For example,
when Doc Heins retired from CUNA Mutual he talked about
getting an auto loan as a graduate student with no money and no
credit history. That event helped shape his entire career.
credit unions there are stories about the first loan, the help with
a purchase or the extra special service. These participations are
sometimes simply identification through creative marketing such
as a credit card from Congressional FCU with a picture of the Capitol
on the plasticmembers want that card.
But often participation
is much more than a marketing contact. A recent example
of extended involvements is in the Annual Report of Alternatives
FCU, a $35-million community development credit union in Ithaca,
N.Y. Stories about members and employees participation
in the credit union experience appear throughout the
report. One concerned a young college student, Gabe Flores:
is one of the first IDA (individual development accounts) youth
participants. . . . As a peace activist, Gabe did not want to register
for the selective service. However without registering, he would
not have access to a number of student loans and grants. The IDA
helped Gabe get money for his education while not having to go against
his values (page 19).
Another member is quoted in the Report: I am honored to be
a partner with an organization dedicated to the ideals of compassion,
justice, sustainability and abundance for all. I appreciate your
integrity and steadfastness.
Every time a
credit union conducts a member survey, holds town hall meetings,
invites letters for political action, or hosts an open house for
a new branch or head office, community spirit is fostered.
is clear from a recent Web survey in which members were asked why
the credit unions on-line account was their most important
union does not make you feel unimportant, but lends more of a humanistic
service to its members.
is MY credit union. It will never be the target of a hostile takeover.
. . . I have most of my money there as well.
Level of Community
must certainly occur in the interactions a credit union has with
its members. But the greatest strength may come from credit unions
commitments with each other.
In every instance
of a coordinated effort to create common advantage and a network
created to support it, credit unions have been successful. Sometimes
this is in the political arena, such as the capitalization of the
NCUSIF or passage of HR 1151. More often it is in the operational
area. The corporate network, created by credit unions, has done
more to keep smaller credit unions viable and provide large credit
unions with options than any other financial system today. Shared
networks and ownership of initiatives in areas such as data processing,
member investment alternatives, new insurance options and even credit
counseling leverage credit union capabilities far beyond the powers
of any one credit union.
and CUSOs being created today, the collective market power of credit
unions is aggregated and used to benefit members. The strength is
not in the resources being mobilized but in the collective intent.
Can credit unions negotiate better automobile deals for their members
working individually or by creating an organization that aggregates
the buying power of members and the financing power of credit unions?
Both strategies are being used. Which approach is most likely to
impress the auto manufacturers or large dealers that credit unions
want fair, consistent value for members?