LAS VEGAS-Vancity has used equal parts mission and margin to grow into the largest CU in English-speaking Canada.
William Azaroff, director of business and community development for the CA$17.1 billion CU, Vancouver, B.C., told the National Directors' Convention here that "mission and margin and inextricably linked. If we do not have a vision and strategy based on a mission, then we are no better than a bank. We have a history of huge growth, but it also is important to have impact."
The story of Vancity is the story of Vancouver, Azaroff said. Formed in 1946, it was the first to provide a mortgage in the working-class east side of Vancouver (homes average CA$828,300 there today), the first to lend to women without a male co-signer, first with a female board member, first in Canada with a socially responsible mutual fund, first to market to the gay and lesbian community, become carbon neutral and to adopt a living wage policy.
These firsts are not just "do-good" activities, Azaroff insisted.
"These are smart and solid business decisions. Lending to females had a huge impact on the community. Having a female board member led to diversity. Social responsibility has become a more important issue as time goes by. The gay and lesbian community in Vancouver is vibrant, so marketing to it opened many opportunities for us."
Unlocking Business Opportunities
Azaroff said the full impact of adopting carbon neutral and living wage policies is not known yet, but he looks forward to evaluating in five years. "I have no doubt they will unlock business opportunities. We did not do them for that reason, but they will have an impact."
The notion of common bond is something that has evolved, said Azaroff.
"The common bond was good for credit unions," he said, suggesting CUs have moved to a "new" common bond-behavioral, attitudinal and emotional, he continued.
In years ahead, Azaroff said CUs can capitalize on the ideas and ideals behind a number of social movements, including Occupy Wall Street, Buy Local and Fair Trade. He said people realize their well-being is linked to the well-being of others.
To that end Vancity is part of 25 banks, cooperatives and other financial institutions that are part of the Global Alliance for Banking Values. GABV members' assets exceed CA$60 billion. It includes three Canadian CUs, but no U.S. CUs.
"Research compared the performance of 17 values-based banks with 29 'too big to fail' banks between 2007 and 2010," he reported. "Values-based banks were twice as likely to invest their assets in loans."
The same research found ROA of values-based banks was 0.50%, while for big banks it was 0.33%. ROE for values-based banks averaged 7.1% vs. 6.6% at other big banks.
Credit unions need to have confidence in their cooperative, community-focused, values-based model-regardless of size, Azaroff said. He said CUs invest their money in their communities for maximum mutual benefit, but still can do more. He suggested credit unions create an impact by giving focused grants-with the idea of supporting causes that will lead to sustainable lending.
