An open letter to credit union leaders:
As you gather in Washington for CUNA's annual Government Affairs Conference, it's helpful to keep in mind the words of Thomas Jefferson: "We are not a government ruled by the majority, we are a government ruled by the majority that participates."
Just as it is critical that we engage national and local legislators on issues facing credit unions, we also must encourage credit union members to exercise their privileges as members and their responsibilities as owners.
The National Cooperative Business Association was proud to assist a small group of Lafayette Federal Credit Union members who fought valiantly and successfully against a plan to convert the credit union to an investor-owned bank. The members used the democratic principles at the heart of both cooperatives and our country. The group educated their fellow member-owners literally one by one, despite little funding, no access to member lists, and harassment from the small group running the credit union. Against daunting odds, the members prevailed.
CUNA's own general counsel stated it very well, "Despite the efforts of insiders to control and manipulate the flow of information...the result was a victory for the democratic process and credit union values." Those values are shared by cooperatives in all industries, including electricity, telecommunications, food, agriculture, health, worker, and purchasing.
The long-term key to success will come from differentiating ourselves from investor-owned companies by emphasizing our cooperative values.
A bank may be able to compete with a credit union on rates or products. But it can never compete on structure. While stock companies serve conflicting masters-customers and stockholders-all cooperatives serve only their member-owners.
At NCBA our goals are to promote and protect cooperative business and to unify the co-op sectors. A collective voice is always louder and stronger than individuals. That's why we developed the .coop Internet domain. It gives credit unions and cooperatives a common and unique identity on the world wide web. It's why we convened a high-level task force on cooperative capital needs that came up with a solution involving all the sectors and benefiting the entire community. Finally, it's why we launched a grassroots advocacy network bridging all the sectors. Our advocates will work on issues affecting all cooperatives and we encourage you to stop by our GAC booth and sign up.
I read recently about a food co-op in Madison, Wis., that helped organize a neighborhood farmer's market. The board asked management to pursue the project to better connect urbanites with farmers. There was concern that the market would draw sales away from the co-op, but the result was the opposite. Sales went up on farmer's market days, because customers stopped by the co-op while they were in the neighborhood. Meanwhile, members appreciated what the food co-op was doing for the community. And the farmer's market helped the food co-op develop more local sources for produce that is on sale everyday.
That's just a small demonstration of the power of people working together for the good of the community.
Think how much more successful credit unions would be if more of your members were engaged in the democratic process.
By educating someone about cooperatives' ownership structure, you can turn a customer into an advocate. Advocates tell their family members, friends, and neighbors to join your credit union. Advocates share a passion for your mission. In short, advocates are good for business...and communities.
Paul Hazen is the president & CEO of the National Cooperative Business Association. He can be reached at phazen
