When future generations of credit union folks look back to the Great Recession of 2009and the havoc it created for credit unions everywhere, what do you think will be their ultimate assessment?
Now lest we forget, credit unions are financial co-ops based on a business model predicated by seven cooperative principles. Membership is voluntary and without discrimination. Co-ops are democratically controlled—-one member, one vote—-formed to be an aggregator where the benefits of membership come in the form of lower fees and better rates, not soaring profits. Co-ops are autonomous, self-help organizations that educate their members, cooperate with other cooperatives, all the while focusing on member needs and demonstrating a concern for the community.
But what was the reality of U.S. financial cooperatives during the first decade of the new millennium?
OK, let’s not kid ourselves. Can we be honest? Although credit unions still demonstrated a strong presence with the underserved, I am of the opinion that the push was on to see where the best yield could be achieved on many credit union investment portfolios. One investor was shopped against the other to see which could deliver the higher yield. All along, we failed to realize the consequences induced by the competition this practise created, affectionately dismissing it as co-opetition.
All the while, credit unions focused their attention on the bankers who were constantly trying to undermine credit union business, pushing for limits on the range of products and services that we might offer, in addition to advancing calls for taxation.
Bankers, increasing regulations, decreasing margins, and now the need to compete for members with the credit union up the block all mounted a formidable pressure on everyone, prying our focus from where it rightfully belonged——on the cooperative values and principles that are at the heart of credit unions. Why should we care about a national branding strategy we asked ourselves when our first obligation is locally to our members and the success of our own credit union?
In retrospect, it’s ironic to think that the more our business flourished, the more our behavior became like the bankers we so firmly abhor. To me, it appears we as an industry drifted from our real intrinsic nature as defined by those seven cooperative principles.
So, I only can wonder if future generations will be of similar opinion. Today, somehow, some way, I believe we have to find our way back to those principles and values that truly distinguish us within America’s financial services marketplace. I believe our survival depends on it. Wouldn't you agree?