Happy Inter-Dependence Day: How Credit Unions Make Us More Free

Profits aren’t un-American, but empowering economic freedom is the difference-maker in the credit union brand of patriotism.

A State of the Union speech 75 years ago provides some perspective on today’s state of the credit union as we celebrate this week the first-born of our patriotic holidays.

In January 1941, President Franklin D. Roosevelt gave his four freedoms speech to define what America stood for: freedom of speech, freedom from want, freedom to worship as each person sees fit, and freedom from fear.

FDR was rallying the country away from complacency about the gathering storm clouds across the Atlantic and Pacific. Credit unions need to shed complacency, too, when it comes to making sure every congressman and consumer, legislator and layman, knows about the credit union difference.

That difference isn’t because not-for-profit credit unions are somehow more moral than for-profit banks. Profit is hardly un-American. No, the credit union difference lies in making members more free.

That’s the movement’s purpose, its origins and its reason for being, our raison dtre. (A nod here to the French-American origins of our nation’s first credit union.) ContentMiddleAd

Freedom’s Many Facets

In a speech to credit unions in Massachusetts in November 1984, NCUA Chairman Ed Callahan described how in just three years deregulation had unleashed a spontaneous change from deep concerns over survival to unprecedented growth.

He cited three institutional freedoms as the basis for this dramatic change:

  1. Freedom to compete in the marketplace.
  2. Freedom to serve whom you want based on terms chosen by board and management.
  3. Freedom to be secure under the cooperative safety net established by a reformed NCUSIF.

Ed closed by stating the heart of the credit union difference is not in the rhetoric of people helping people; rather it’s the reality of how credit unions serve the multiple needs of all members & what we do with these new freedoms is our difference.

Credit Unions Enhancing Personal Freedom

In America, personal freedom is inextricably linked with economic success. The competitive forces encouraged by a capitalistic economy means that many are still not free from want. Economic inequality continues to grow; personal opportunity is frequently bequeathed by the circumstances of one’s parents.

Freedom from fear affects not only those whose jobs have been newly disrupted by global forces but also those who have always lived at the margin. Those living in immigration’s shadow now face a particularly potent mix of fear and economic uncertainty.

At its very best, each credit union member is seen as a person worthy of respect and support. A while back, while waiting for Jim Blaine, then CEO of SECU in North Carolina, to drive me back to the airport, I watched him listen to a branch manager present a heads-up on a loan application.

The manager said this member will go delinquent several times over the loan’s life but will always make it up. This is what his experience suggests. Jim and the branch manager agreed to make the loan, despite the member’s credit history. The decision was based on the person who had the need not a formal credit policy.

Happy Inter-Dependence Day

That is how credit unions enhance members’ freedom. A sense of financial well-being is empowering for every individual. Many who cannot earn enough or aspire to the comfort of a retirement nest egg will need a financial institution that will serve, not exploit, their financial needs or uncertainty.

The essence of the cooperative model is where members and the credit union co-create equitable opportunity for all.

The irony of Independence Day is the interdependence on which all personal freedom rests. FDR gave this meaning in time of war. Ed Callahan illuminated the credit union contribution in times of economic stress.

Cooperatives daily demonstrate that freedom is more than celebrating a past event, it’s a daily practice of serving one’s neighbor in a way that enhances everyone’s self-worth.

Happy Fourth.

July 3, 2018

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