The Internet offers speed, convenience and accessibility. It changes everything. No more the walk to the credit union with the passbook; no more the drive and the search for a parking place; no more the slips of paper to move money from one account to another. A personal computer does this without you having to move from your chair, allows you to do it between sending email and checking out plane fares. As they say, capital now moves half way around the world in the blink of an eye, and that includes moving money into and out of a credit union.
Old Protections are Not Going to Work
Despite the global nature of financial services our attitudes are still stuck on local geography. We try to wall out groups of people from certain credit unions. We say that because you are in one group you cannot be in another's field of membership. Of course, electrons don't recognize geographic or similar artificial barriers. People, only with great difficulty, could move from one side of the Iron Curtain to the other. But ideas and electrons moved across it practically at will. Eventually those who tried to maintain the Iron Curtain understood that it was obsolete for everything except bodies, and it crumbled. So it is with credit unions and similar financial institutions. Regulations and boundaries imposed during the era when local geography counted for something are poor barriers today-ineffectual to ideas and needs but obstructions to the wishes of people. Nowadays, they tend to stump only the honest.
In an age of electrons, it is increasingly absurd to dole out and take away fields of membership. Generally, this is attempted in order to 'protect' a credit union, to bolster safety and soundness. Brokering FOMs can now be seen for what it is: dealing in artificialities that can only forestall the day when inefficient credit unions face the music and are forced to close. We now live in the 21st century. We cannot continue to operate with the expediencies of the 1930s. FOMs were used as a means of organizing. The largest masses of people were employees at large factories; it only made sense to organize around them.
Long before the federal government even considered a credit union regulatory role, the defining group was people who cared to join, be they from the parish or the neighborhood-if you agreed to abide by the rules of the credit union you were in.
Freedom to Choose
Now, after a century, we should be able to choose a credit union based not on factory, or even parish, city or county, but on compatibility with our own needs. We should be able to log on the Internet and choose the credit union, no matter where it is, based on its services, and continue to be members so long as we abide by its rules. The technology, of course, is already there; in the way is out-of-date law and regulation.
Regulators cling to the notion that they should be power brokers handing out markets, taking away markets and trying to build protective walls around inefficient operations in the name of safety and soundness. This is not only out of date, it is dangerous and pompous.
Truly, the old notion of common bond should be put to rest, because no one really knows what it means any more anyway. Those who think they do are dangerous, because they want to restrict which credit unions Americans can choose as right for them.
Fact: People in an electronic age will go where they want to go. Thus, trying to herd them artificially is unconscionable. Individuals want to be able to decide which credit union is going to best for them. The sooner we wake up to that reality, the faster we will follow people where they want to go, the better we will be able to serve them which is our mission and the better off we are going to be.