True to its name, Our Family Social Credit Union ($541.9K, Omaha, NE) has its roots in the family get-togethers that Lucy and Manley Williams would host at their home in the 1940s. Besides giving family members the chance to catch up on news of one another, the family social also served as a financial resource for hard-up relatives. If a family member struggled financially, relatives would pass the hat around to gather funds and help. The funds were a loan, and family members trusted the recipient to repay the money so that another cash-strapped relative could benefit from the system.
Eventually, the Williams family realized that it made more sense to form a credit union so that relatives would have somewhere to turn when there wasn’t a reunion or family social scheduled. One of the cousins who happened to be an attorney applied for a Nebraska state charter on June 26, 1950, and the credit union was formed. All family members deposited money into their share accounts so that there would be enough assets to make loans, and since then, the family has been providing capital to relatives this way.
Our Family Social’s field of membership includes anyone who is a direct descendant or blood relative of Lucy and Manley Williams as well as individuals who join the family via marriage or adoption. Today, the credit union has 523 members in 22 states, and apart from a 25-cent charge for opening a new account when a child is born, there are no processing fees.
Members also volunteer as the credit union’s employees, handling loan applications 24 hours a day seven days a week. Relatives who need a loan for a new car or some other purpose fill out applications just like they would at any other credit union, except that Our Family Social has no call center and only a minimal website. Instead, credit union members get premium service by calling their relatives directly, including after business hours.
Although auto loans are the most common, teenage members have received loans for bicycles and guitars. In fact, members make sure that their teenage children learn responsible financial habits by applying for loans from the credit union instead of hitting up their parents for the cash. In this way, Our Family Social virtually guarantees that it will attract the next generation of members.
The credit union doesn’t pretend to always have the lowest rates, but because members are also relatives, the institution is especially motivated to act with everyone’s best interests in mind. The same is true for borrowers. On the rare occasions when a relative defaults on a loan or goes into bankruptcy, that borrower has eventually repaid the loan out of a sense of loyalty to not just the credit union but also to the family.
Meanwhile, the family socials still continue with the credit union organizing a family reunion every two years. But unlike the family socials from 60 years ago, there’s no reason to pass the hat around anymore.
This week, in honor of July 4, we invited five credit unions to share the story of their beginnings. Tune in each day to learn about another cooperative's origins.