All politics may be local, but inspiration is global-or so it seemed to Maleny CU and the Foresters ANA Friendly Society, which undertook a worldwide survey of community development initiatives that featured several American credit unions.
"At the time I undertook the research, (MCU and Foresters ANA) were probably the only true CDFIs in Australia," explained Paul Rees, the independent consultant who put together the report on the CDFI survey. "We were looking for ideas about how to make finance work for communities and the environment instead of against them. Australia has been plagued by bad behavior by the banks-branch closures, poor service, high fees, inappropriate financial products, etc. We were also looking for ideas for innovative products we could develop that would encourage environmentally responsible behavior, benefit people on low incomes, encourage saving, discourage irresponsible debt, help marginalized people. I wanted to see these introduced at MCU and Foresters ANA, proved and then replicated in other financial services providers. I suppose I wanted to the change the world "
Looking To The U.S.
So Rees turned to the world for some tried-and-true solutions-and found them in Alternatives FCU, Ithaca, N.Y., and Self-Help CU, N.C., among other places.
Alternatives was cited in the survey for its numerous programs designed to help build wealth for individuals and resources for communities. Those initiatives include its CEO (Community Enterprise Opportunity," the Growth Opportunites (GO) Fund, and its development of "The Credit Path-The Path to Opportunity." All were judged to underscore an extremely active demonstration of the credit union people-helping-people philosophy.
The CEO program is a small business development program that marries business skills training with the CU's member business lending program, while the GO Fund is a micro-enterprise venture capital fund for start-up or expanding businesses.
Self-Help Credit Union was cited as an example of a working combination of community action and development organization (the Center for Community Self-Help) and a financial institution dedicated to those same goals.
"The Center develops and coordinates Self-Help's programs, raises resources and advocates for economic opportunity," Rees wrote in his "Inspiration From Abroad" report. "The credit union uses market- rate deposits from members to make commercial and home loans to members who cannot obtain finance from conventional lenders."
The credit union was also praised for its campaign against predatory lending (which helped get an anti-predatory lending law passed in North Carolina that is being considered as a model for similar laws in other states), as well as its efforts to reach out the Latino community. Self Help played a primary role in helping to get the Latino Community CU off the ground.
An Opportunity Is Envisioned
Santa Cruz Community CU in California also earned mention in the report for making its highest priority to meet the needs of low-income people through the development of small business cooperatives, worker-controlled businesses and other community development initiatives.
Though Maleny Credit Union and Foresters ANA serve as solid examples of community development financial institutions in Australia, Rees cited a need for more cooperative development-and a concern that the creation of more such institutions will face a number of challenges Down Under.
"The strength and size of the big financial institutions has created an opportunity for CDFIs," Rees suggested. "The big institutions can't relate to local communities, especially distressed urban and suburban communities and rural communities. These communities just aren't economic for the big players, but they still need financial services."
Indeed, if Americans sometimes feel like the nation is populated by just a few mega-banks, they need only visit Australia for a reality check, where literally four major banks pretty well dominate the market.
"Historically, we have a very strong credit union movement in Australia, but the term 'movement' may not be accurate anymore," Rees observed, noting that the loss of the CU tax exemption has, in his opinion, hurt the Australian movement.
Moreover, the regulatory environment in Australia isn't conducive to the creation of new credit unions, much less CDFIs. "It is now almost impossible to start up a new credit union in Australia," he commented. "Really, the only way is to start one under the auspices of an existing institution and then spin it off when it's financially viable."
Looking To The U.S.
Even so, if the "Inspiration From Abroad" report and the three-tiered project of which it is a part are any indication, credit unions and other cooperatives remain dedicated to the people helping people philosophy. Rees' report was part the Community Capital project, a joint effort among MCU, Foresters ANA and the Commonwealth Department of Family Community Services.
In addition to the "Inspiration From Abroad" report, Community Capital established a national conference on community capital building, a short course on social and environmental auditing, as well as a website (www.communitycapital.asn.au) and other networking resources for community development efforts.
"It starts with a vision for a fair, inclusive, just, sustainable society," Rees told The Credit Union Journal. "Seeing your part in solving the issues that affect your community. Forming partnerships with like- minded organizations.and campaigning on isues. In an era of cynical treatment from both governments and corporations, of spin, doublespeak and lies, people hunger for an alternative that they can trust and rely on."