Today, good news is in short supply. Economic low points, market volatility, and continuing efforts to fix the problems in Washington dominate headlines.
But there is a bright spot, a light that could show people facing hardship as well as national policy makers a clear path forward. The message is simple: the most viable financial model in America today is the cooperative credit union system.
What the Data Shows
During the past 18 months of an ever-hardening credit freeze, credit unions are on their way to a record lending year in 2008. More than $202 billion of loans to 14.7 million members were originated in the first nine months of the year.
Across the board – in mortgages, autos and credit cards – lending is up. Credit union market share is growing as other lenders pull back or reduce their exposure.
This activity is not just in traditional consumer markets. Credit unions have invested over a billion dollars in student lending, both directly and with state funding agencies. Small business loans are growing. Credit unions are also buying local government unit securities at a time when some smaller municipalities have been shut out of markets.
Credit unions have not escaped the tide of rising delinquencies and increasing charge offs. But as these numbers grow, credit unions have still added over $3.0 billion in capital and maintained a net worth ratio of almost 11%.
Getting the Message Out
The credit union model is working. Presenting these facts with positive stories and data must start with employees. They are both the persons responsible for the success and the key front-line messengers.
Members read newspapers, hear stories of layoffs and face declines in the value of any market savings or real estate they may own. Now more than ever, the loyalty and continued faith of members in their credit union is what makes the model viable. Maintaining their confidence by going the extra mile for every member can enhance the foundation of the credit union system for generations to come.
Finally the public needs to hear the good news, that a financial institution can be operated in their interest, that an organization can be there for them not just in good times, but when circumstances change. More importantly, this option is an organization they own – no shareholders to answer to before a consumer’s needs can be met.
The examples in the following pages show how credit unions have tried to tell their story. Most credit unions are local in their focus and impact. Their stories are often personal but yet universal in their relevance. In today’s turbulent marketplace, every person is looking for an institution he or she can trust when seeking financial services.
The Role of Cooperatives in Society
The credit union story is about much more than financial services. The challenges facing the country today aren’t just economic, but also involve choices about how our society is going to treat its citizens. How can the public interest as well as the private motives of for-profit firms be reconciled for the greater good?
Recently Federal Reserve Chairman Ben Bernanke listed a cooperative model as one way to reconstitute Fannie Mae and Freddie Mac for their future role in mortgage finance. One writer has described the success of the FHLB system as due to its cooperative structure.
Cooperatives are more than an organizational model. Embedded in cooperatives is a social imperative that to succeed, citizens must rely on each other, not merely pursue self interest.
John Kennedy in his 1960 inaugural address captured this spirit when he challenged America’s citizens to “Ask not what your country can do for you, but rather ask what you can do for your country.”
At a time when many constituents today are focusing on Washington as a source of bailouts, credit unions clearly show that old-fashioned cooperation and self-help can provide viable solutions.
That message needs to be told not just on the mountains, but over the hills, especially Capitol Hill, and everywhere.