Republished from chipfilson.com
I am increasingly concerned about mergers of well run, healthy credit unions. And the bandwagon that many credit union CEOs seem eager to join. Here are my reasons why.
One of the most important innovations of the cooperative financial model was to give ordinary citizens the right to “own and manage the means of financial production.”
Without this option, members would just be consumers of financial services at the mercy of whatever options the market, private enterprise or non-regulated firms offered.
Making capitalism more democratic
The co-op response emerged out of the progressive era at the turn of the 20th century. Large monopolies controlled railroads, banking and other vital industries such as steel and oil. Farmers were one of the first groups to organize against large corporate monopoly power via co-ops.
The credit union belief that regular citizens, not the wealthy, could own, control and invest their collective savings was both a political and an economic innovation.
The elected boards were the mechanism by which the governance and democratic purposes were carried out.
The importance of economic democracy
As consequential as the movement’s financial growth to over $1.6 trillion has been, the value of cooperative design goes beyond a purely economic role. Or offering just another market option. Benefits individual credit unions provide for their communities and member groups include:
- Collaborative economic capacity inspired by purpose, passion and values
- Direct CEO accountability to user-owners
- Elected oversight of directors, from the membership
- Focus on community needs and priorities
- Reinvestment of savings responsive to local conditions
- Firsthand knowledge of members and community circumstances-both routine and in uncertain environments
- Leadership in the community to support other local solutions