In response to an excellent post over at CUES Skybox.
I was at a meeting of cooperative grocers a few weeks back, and there were a lot more young’ens in the crowd than at a typical credit union meeting. When asked to defend the cooperative model, most of them didn’t do it on the basis of cost (apparently co-op groceries are often comparable or more expensive) or participation, even though the ones in the room participated heavily. The default defense was that it was “the right way to buy.”
They pointed to worker rights, environmental concerns, local produce and products, sustainability, and community empowerment. All of these are pretty shaky as purely economic values, but much more powerful as pieces of a moral argument. Granted, the people in the room were true believers of a certain political persuasion, but I didn’t doubt that they represented a certain segment of the population.
The challenge with the credit union co-op difference is that it’s been demonstrated to death that nationwide – and usually local – credit union rates are (a little) better than bank rates. But that’s a miniscule motivator, especially for prospective members. And it’s often trumped by bank convenience and product range.
Articulating those normative values – sustainability, community empowerment, and so on – can be powerful in a community where concern about those issues is important. Props to early leaders like Vancity, Seattle Metro, and Santa Cruz Community, which are all doing this in their own ways … and in communities with many members of a certain political persuasion.
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I think you’re dead on, Ben. Unfortuntately, I think that many of us have been programmed to believe that the only cooperative differences credit unions have to offer are the rates and service – both of which are easily trumped by other features and benefits. There is so much more to being a cooperative, but we need to educate the masses – starting with CU staff and directors – about the advantages.
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Ben- Interesting post, and I certainly agree that the rates/service argument for CU’s vs. banks isn’t compelling on an individual consumer basis. However, I’m not sure the grocery approach makes sense, either. Since a CU is a place to keep your money, economic motivations are paramount. So rather than either values or collective benefit, why not focus more on a tangible benefits approach used by REI in retail or DFCU? If CU’s start rewarding members financially for their individual behaviors, this would drive home the point of the “credit union difference” and more effectively make the case for CU’s vs. banks. A $100 or more annual dividend or rebate check will go much farther with consumers than the hidden benefits of CU’s collective rate advantages.
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I hear you, Bryan. The problem is, for most CUs to be able to afford/justify a substantial annual dividend for all members (not just the upper tier), the already negligible rate advantage would have to erode further. I love REI, but they have the retailer’s advantage of sexy product.
That said, there are several CUs that do a good (and consistent) job with extraordinary dividends. Eastman in TN, and yes DFCU in MI. It’s WAY better than hiding the advantage in slightly better rates..
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