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Michigan Credit Union League Home » Information Services » Publications » Contact » 2005 » 1st Quarter » Outlook  


CRI: The Right Thing to Do

By JoAnne Fillwock
Financial Health CU (LN)

Do we, as credit unions, have a social mission? And, if so, how do we define it?

This was the question that came up for discussion at our credit union’s strategic planning session a few months ago. The overwhelming consensus was that we do have a social mission, but since we never really talked about it “strategically,” we weren’t sure of what it was, how to define it or how to measure our success.

We know that the Federal Credit Union Act refers to credit unions serving people of modest means, but our board agreed this by itself isn’t much of a “social directive.” In addition, our credit union — and most other credit unions today — serve people of all income levels, not just those of “modest means.” We know we’re involved in a variety of initiatives and outreach activities. Our credit union raises money for the Children’s Miracle Network and contributes financially to a variety of other good causes. We’re committed to socially responsible efforts such as registering people to vote, holding flu immunization clinics and offering financial education seminars. We partner with the Michigan Disability Rights Coalition to underwrite loans for people with disabilities, and we recently received a grant from the National Credit Union Foundation to develop and provide financial education materials and programs for disabled persons.

These are things we just did, not because it was part of a strategic or regulatory directive, but because it somehow seemed an inherent part of our reason for being — the credit union credo of “People Helping People.”

I think this is how most credit unions approach their social initiatives today. We really don’t do a very good job of keeping track of these initiatives and who we helped — but we’re involved because it’s the right thing to do.

If we can accomplish so much with little formal planning — what would be the impact of elevating the importance of our social mission to a strategic level? Doing that would mean that we would focus more on outcomes, and consider more creative ways of serving members and potential members profitably, to the benefit of all our members. It would mean that when legislators ask us how we’re different from banks, we’d have more than just anecdotal stories of how we’re impacting the social and economic well being of our members and our community.

I believe that credit unions can have social missions and still be profitable — but a social mission needs to be strategically important.

A few months ago, I was approached by MCUL staff about the possibility of chairing a task force which would identify and focus on current and potential credit union community reinvestment initiatives. The minute credit union folks saw the words community and reinvestment side by side, many became uncomfortable. After all, isn’t “community reinvestment” something that banks are forced to do by the government through the Community Reinvestment Act (CRA)? Aren’t credit unions already doing enough in giving back to the community?

The answer to the first part of this rhetorical question is definitely yes, and the answer to the second half of the question is yes, no, or maybe — depending on whom you’re talking to. Most credit unions are doing a great job of giving back to the community, either directly through their involvement and support of community projects, schools, and similar initiatives, or indirectly through initiatives which reach out to underserved and economically disadvantaged segments of the community.

The MCUL, however, is taking the opportunity to elevate the social mission of the collective credit union movement in Michigan to a strategic level with its Community Reinvestment Initiative. By creating this Community Reinvestment Initiative Task Force, the League is acknowledging a key credit union difference — that we voluntarily recognize our social imperative, and we don’t need to be coerced by legislation for us to do so.

Or, in other words: Banks do the right thing because the law says they have to. Credit unions do the right thing because it’s the right thing to do.

If we agree on the importance of credit unions being socially involved, why not make it a strategic priority? Why not begin by identifying all the wonderful things we’re doing and communicate them to the League as a clearing house? Why not look for creative and profitable ways of serving financially challenged households and micro enterprises?

If we do this, we will not only be accomplishing even more good in our communities and for our members. We’ll also be promoting and protecting the future of the credit union movement. When the bankers campaign for taxation of credit unions, and rail that credit unions are really no different than banks, we’ll have a wealth of recent and tangible
evidence that proves otherwise.

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