Credit Unions being a Cooperative

Recently, the “dot-coop” (or .coop) extension topic was brought up on This question was about whether or not it’s a good idea for credit unions to use this domain extension to signal that they are part of the broader cooperative movement.

This leads to the question: does being a part of the broader cooperative movement still mean anything in today’s credit union world? The reason I like to raise this question is that I had been working with this movement for about eight years before I had ever heard of the Seven Cooperative Principles. I knew that credit unions were member-owned, members had equal voting power, and that they were run as not-for-profit financial institutions. But I didn’t put two and two together to realize that all of these things are principles of the larger Cooperative movement.

So I recently voiced this question in response to the .coop issue, and received a wonderful response from my friend Gene Blishen. Gene is an amazing guy; he walks the talk. He’s the CEO of a successful, small credit union in British Columbia, where he remains true to credit union and cooperative principles while running a productive operation, one which has done some excellent technological innovation based on improving service to the members.

For many credit unions, in the U.S. especially, being a Cooperative has little or no meaning. They are simply trying to be the best financial organization possible, while running under the not-for-profit banner. It’s not that these credit union professionals care any less about their members. They still want to do the best they can for them, and make their lives better. It’s just that they don’t see any significant purpose in the Cooperative movement, or perhaps don’t see how it fits in their workplace. And that’s fine.

Here is Gene’s response on the matter, also posted on his Tinfoiling blog:

I think there is an elephant in the room and it never gets invited to leave.

IF you read the 7 Co-operative principle on which most CUs were founded years ago they were important in the structure and culture of the credit unions. As the financial industry has advanced somehow those principles have been forgotten, neglected or just unknown.

If one makes a decision about anything there are some fundamentals that act when arriving at that decision. Without the knowledge of these principles then the decision gets hijacked by being made outside those principles. If we bring to focus these absolutes that are a given i.e. we need to make money, we need to compete and neglect to discuss and bring forward how we incorporate these values (principles) in our CUs we do an incredible disservice.

Of course we need to make money, I don’t think that is a principle that needed discussion when CUs started. Of course we need to compete, they started because they could compete. But what about democratic owner control? What does that mean in todays CU? Or the education principle? I think we don’t want to discuss those. Why? To be honest because we have failed to bring these to the important level they need to be, we have been too busy making sure we make money and are moving forward in the marketplace.

I look at a CU like a car. You get it into shape. You tune it up. You keep it working well. But is that all? No you then decide where you want to go with it. What destinations are available and when will you get there. You always pay attention to the operation of the vehicle otherwise you won’t get there. Just remember you have seven places to arrive at and the journey can be exciting and very interesting. Remember we do have GPS to get us where we are going these days! 🙂

Here is a related blog post I wrote on the 6th principle of Cooperatives, which is that Cooperatives cooperate with each other: Zucchinis and Credit Unions: Not strange bedfellows

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6 Responses to “Credit Unions being a Cooperative”

  1. Morriss Partee Says:

    Ron Shevlin has pointed out this Harvard Business School blog post, Is Profit as a “Direct Goal” Overrated? as pertinent to this conversation.

  2. Tom Webb Says:

    This is an important topic. Whether managers, board members or members know it Credit Unions are financial services co-operatives. At least that is the way they started out. North American credit unions started out with Alphonse Desjardins in Levis Quebec and the idea was picked up by the owner of the Filene department store in Boston who was concerned that his workers had trouble getting financial services. He hired Roy Bergengren who later worked with Moses Coady and Jimmy Thompkins to start the credit union movement in Atlantic Canada. Desjardins, Coady and Thompkins were co-operators.

    While many credit unions have allowed their understanding of who they are slip (and some have even changed their names to remove the words credit union, they ought to reflect on their roots for some compelling reasons:
    – a significant number of their members do know and expect them to behave as credit unions not banks
    – the majority of people in the US have a more positive view of them than they do of banks
    – if it is not the co-operative purpose, values and principles that are the founddation of their identity what is it?
    – co-operative purpose, values and principles are valued by people all over the world.
    – credit unions can be stronger by being part of the wider co-operative movement and the reverese is true as well
    – 300,000 co-operatives in Europe have an output greater than the tenth largest GNP in the world
    – especially since September 2008 credit unions and other co-operatives have not just an opportunity but a responsibility to people around the world and future generations – to offer an alternative that: does not produce toxic paper, whose shares do not go up and down like a yoyo, does not see foreclosure as the best way out, that is focused on meeting member and community need rather than appealing to greed.
    – credit unions and other co-operatives have a unique selling point linked to co-operative purpose, values and principles – it is trust.

    Alone credit unions are wonderful (usually) together with other co-operatives they could be formidable.

    Tom Webb
    Program Manager
    Master of Management – Co-oeratives and Credit Unions

  3. William Azaroff Says:

    Hi Morriss, I started to leave a comment, but wrote my own blog post instead. Thanks for the inspiration…

  4. william azaroff » Blog Archive » What a co-op means today. Says:

    […] I must credit Morriss and Gene for their posts that inspired me to write this. No Comments […]

  5. Theresa Hilinski Says:

    Gene is great – had the pleasure of hearing him speak at the closing Crash session last Wednesday…what a great guy!

  6. FMSI Says:

    I love the car analogy. Specifically, the GPS speaks volumes about this topic. We should always be looking for new innovative approaches. Whether or not that is being part of a COOP or utilizing some other tool to be the best organization for members. Good Points!

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