Snatching Up Those Ex-Bank 'Members'
Where will credit unions be 100 years from now? Hopefully with all the bad banks closing, credit unions can find a way to snatch up all the bank "members." Credit unions may be less in numbers, but there are still plenty of members to serve.
Dustin Thoren, CUNA Mutual, Madison, Wis.
Two Reasons CUs Will Thrive Until 2109
I predict there will be a credit union movement in the year 2109. My reason for having this faith is two-fold. First, financial market cycles will continue providing an encouragement for an alternative financial model. Second, an evolved society will always return to the ideals that define the current credit union philosophy.
A casual observer of history could conclude that markets are doomed to relive cycles. Consider this: It has taken around 80 years or so to experience a recession that was severe enough to draw comparisons to the Great Depression. If this trend persists, the next great economic collapse will be around 2089, enough time for financial providers to forget the horrors of today and return to unwise practices.
Second, no matter how smart people become or how much technology changes our lives, there is no substitute for the promises of cooperative finance.
Maurice R. Smith, President
Local Government FCU, Raleigh, N.C. A Radically Different Credit Union Future
My credit union, SAFE Credit Union in North Highlands, Calif., will be much different in 100 years...I think we can expect a radically different credit union than we have today. I expect that there will be fewer than 500 credit unions. Credit unions will realize the full meaning of "member owned," because members will have capital shares and an ownership interest in the credit union. Credit unions and banks will be regulated by the same regulator and we will have the same powers as other community financial institutions. The regulator will have "firewalls" that retain the difference between banks and credit unions and prevent rule making that changes the key differences between banks and credit unions. Members will still have one vote each and elect the board of directors.
The financial system of the U.S. will be different than it is today as a result of the rule changes made after the Second Great Depression in 2010 ...
Henry Wirz, President
SAFE Credit Union, N. Highlands, Calif. A Return To Our (Immigrant) Roots
I am a Canadian credit unionist who works extensively in the developing world. Sadly it seems most countries in the developing world have a history of credit unions, and the wreckage of movements scattered about to show for it.
Today most immigrants from the developing world would automatically choose a bank over a credit union, given what they know (or don't) about credit unions back home. If we cannot turn this situation around we will have problems in future. India's credit union movement, after being wrecked by government meddling in the middle of the 20th century, is finally showing some signs of life.
If we are to turn the situation around, we need the will to react more energetically and creatively... And we need to blend this energy and creativity with a return to our roots: credit unions are still the only historically proven form of microfinance capable of delivering control of capital into poor rural communities where most of the world's poorest citizens toil.
Brett Hudson, Matthews, Managing Partner
Mathwood Consulting Co., Toronto Two Questions That Need To Be Asked
It is rather easy to predict where credit unions are going to be in 2109. Two assumptions must be explicitly formed before the main question is answered: 1. Are credit unions providing a service to their members on an economic basis? 2. Are credit unions structured as mutual organizations, i.e., still owned by their members If the answer to both 1 and 2 are "yes," then I believe CUs will be an important part of the financial services landscape.
Al Menard CUs The Community Banks of Tomorrow
I think the two biggest and most obvious changes will be that credit unions will capture most of the small business lending from the commercial banks, and as part of that, many will consolidate into regional CUs to get to the asset base and supporting that lending staffing function.
Related to that I think we'll see a lot of independent banks, community banks, regional bank chains, and more majors vanish as they're steadily nibbled to death by specialists doing their work better (brokerages, auto lenders, mortgage houses, credit card companies, student loan packagers, PayPal, ag lending, equipment lending, etc.) that losing commercial lending too will make their high overhead and profit expectations unsustainable for many, many banks. Since we've had regular cycles of bank overexpansion and contraction throughout U.S. history, this isn't much of a prediction either.
Loans for residential electrical generation systems, ground-source heat pumps, etc. as a whole product would have been an insightful guess five to 10 years ago, too. Self-sustainability upgrades instead of more traditional home improvement uses would seem like a significant and long-term trend (it's always made sense and only been ignored much in just the past 50-70 years.)
Al Jones, Billings, Mont. A Set of Possibilites Is Awaiting Us
The future is not something predestined waiting for us to discover, nor a totally blank page waiting for us to write it. Rather it is more like a set of possibilities waiting to see if we have the courage and vision to blossom, or if we will just manage to hold our own or decline. The possibilities are based on events and circumstances.
If credit unions embrace the possibilities and face the circumstances with courage, vision and a commitment to values, they can become the leading global financial institutions over the next hundred years. We can also fail at the task because we choose faint-hearted boards, or do not really believe in who we are, or fail to develop the managers we need, or lose our vision and purpose.
Credit unions were created by people who were seeking fairness and justice from financial institutions and not getting it. They were created to meet individual, family and community needs. As they became successful and grew they had to struggle with pressures to become more like other financial institutions — the ones they were created to replace. They share this struggle with other cooperative businesses. The more they copied what non-cooperative financial businesses were doing, the more they hired bankers as managers, the more they failed to educate managers, members and boards about the credit union difference — the more at risk their identities became. Today's reality is that some credit unions have a clear cooperative identity while others are struggling with who they are and some are at risk of demutualization. In sessions with cooperative and credit union managers I often ask if they know of a credit union that is in difficulty because it is living its values. The response is always "no." I ask if they know of a credit union that got into difficulty because it lost its values and identity. The answer is always "yes."
J. Tom Webb, Program Manager
Master of Management — Co-operatives and Credit Unions
St. Mary's University, Halifax, Nova Scotia
A Way To Shake Up Banks, The World
Simple Interest Mortgages would not only shake up the mortgage and banking industry, but the whole world. What would it be like for us if credit unions led the way? Consumers would flock to us by the millions, save billions, and expand product line penetration in the trillions.
Let's not just talk about revitalizing, but let's move toward revolutionizing. How about attaching a credit/debit card to the quickly decreasing balance of the mortgage Oh, I know there's a lot to it and the naysayers will gather by the score, but let us imagine just for a moment how things would be today if mortgages were always done this way....Sure it's radical, but only because it's never been done(at least in my 53 years on the planet). Radical is not always wrong and can often lead us to doing what's right. Just consider what we could do for the health and wealth of our Credit unions, our country, our members, and our friends. The next 100 years would sure be different than the last, and we could lead the way if we have the courage to do so.
John Bates, Triangle Credit Union, Lowell, Mass.
A Foundation That Can Be Built Upon
In reflecting about the next 100 years, I became curious and looked into the past century...The first credit union was created in Manchester, N.H....to help newly arrived French-Canadian immigrants achieve a better quality of life. Presently, St. Mary's, as it is commonly known, is a thriving institution serving a very diverse population.
Fast forward 199 years. I foresee an even stronger CU movement, led by a vision and a set of values that transcend time and space. I suspect that technology will be so advanced that the use of currencies and most payment methods we know today will be obsolete. However, the need for the creation and protection of wealth will remain unchanged.
I envision institutions that are even more tightly knit to the communities they serve, offering not only financial products but also serving as small business incubators, educators, policy advisors and promoters of economic growth...It behooves the next generations to build upon it.
Eduardo Alvarez, Managing Director, Brand and Retail Strategy
NewGround, St. Louis
