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Are you "Shopping Co-op" for your Financial Services?

Some of you may have heard radio spots recently advertising ”"Minnesota's Credit Unions: Working for People and Not for Profit".• Or you may have seen the billboards around town touting ”"Minnesota's Credit Unions; Over 1.5 Million Strong". If we weren't aware of them earlier, this recent media attention has helped ensure that most of us are familiar with the term "credit union".• While the term may be familiar, what is less well known is how credit unions differ from banks and other financial institutions.

Credit unions, at root, represent people taking control of their own financial security; and because of their cooperative principles and member control, they are uniquely situated to promote this goal. Through credit unions, we put our collective funds to work within our own communities. Since first established in the 1850s in Germany, credit unions have been financial cooperatives, owned and controlled by their members. They are governed by a democratically elected volunteer board of directors. In electing directors, all members, regardless of the extent of their participation in the credit union, are entitled to one vote and one vote only.

Credit unions were originally started as a place where people sharing a common bond (such as geographical location or a common employer) could deposit their savings and, in turn, have access to low-cost credit for their consumer needs. True to their beginnings, credit unions around the world frequently provide consumer financial services to communities where such services are either prohibitively expensive or nonexistent. According to the World Council of Credit Unions, 108 million people worldwide are members of some 36,000 credit unions having over $500 billion in assets.

In the United States, where democratic ideals and relative economic prosperity are features of our cultural landscape, credit unions have evolved from their humble beginnings to become full-service financial institutions, providing everything from basic checking accounts to internet banking and wireless Palm-top account access. Additionally, they are carefully regulated institutions and provide a safe place for depositor funds; most deposits are federally insured for up to $100,000 by the National Credit Union Share Insurance Fund. By the end of the year 2000, there were over 10,000 credit unions operating in this country. Here in Minnesota, in large part due to the strength of the cooperative movement generally, the credit union movement has enjoyed tremendous success. Many Minnesota employers, such as Northwest Airlines, IBM, Medtronic and the State of Minnesota (just to name a few) are affiliated with a credit union. One (Twin City Co-ops Federal Credit Union) even extends membership to all members and employees of cooperatives.

Kevin Chandler, president of the Minnesota Credit Union Network, when contrasting credit unions and banks, asks whether one has ever heard anyone talking about the ”banking movement.• His point is well taken. In contrast to banks, credit unions are a movement with broad popular and bipartisan support. To the extent that credit unions take ”market share• from traditional banks, there has been institutional hostility toward the credit union movement. And that hostility is growing proportionate to the growth of the movement, with bankers and their trade organizations lobbying heavily and waging expensive and protracted court battles to restrict credit union membership and powers. Fortunately, enlightened Congress members and regulators realize that there is little merit to bankers‘ contentions and continue to support credit unions, recognizing the real value of the movement to a broad population base. In fact, regulators and legislators recently praised credit unions for their role in combating predatory lending, their efforts at promoting financial literacy among youth, and their service to communities of color. Additionally, credit unions are continually recognized for their role in promoting local economic vitality.

So, if you strive to ”Shop Co-op,• you should look into credit unions as cooperative financial institutions. As financial cooperatives, they are owned and controlled by the people who use them; they are founded on principles of democracy and economic justice. Credit unions aren't just about providing value to consumers of financial services; they are about values.

If you want to find out what credit union you may be eligible to join, call MNCUN at 800-477-1034 or go to http://www.mncun.org/public/cufind.asp.

Formerly an HPC staff and board member, Jeff Streiffer has been an activist in the cooperative movement for 14 years. Currently, he works as an attorney with the Educational Credit Management Corp. in St. Paul and sits on the Board of Directors for Twin City Co-ops Federal Credit Union. He can be reached at streifferjeff @ qwest.net.