NEWS AND VIEWS

Cooperation among Cooperatives - Creating Shared Growth Opportunities.

In the 1930’s rural electric cooperatives were formed because investor-owned utility companies refused to offer electricity due to the lack of opportunity to make a profit. Credit unions were formed because people of modest means were unable to access financial services at reasonable costs. Owned by the members who use their services or purchase their products, cooperatives can provide virtually any product or service, and can be either non-profit or for-profit enterprises. Co-ops are formed by their members when the marketplace fails to provide needed goods or services at affordable prices and acceptable quality.

Most people in the credit union industry know and understand our organizations are financial cooperatives. We pool the financial resources of our members and use those for the benefit of all members, through financial products that promote thrift and responsible lending. However, credit unions are only part of a much larger cooperative community.

There are many different types of cooperatives, serving diverse needs across the U.S. and the world, but rarely do these co-ops cooperate and collaborate with each other. Instead, they typically work independently of each other. For 100 years most credit unions have lived outside the broader cooperative world. While credit unions collaborate among themselves, they typically do not feel integrated into the broader cooperative movement. They tend to look at the other cooperative sectors as very different from themselves rather then emphasizing the common traits and heritage.

A new business model solution is surfacing to create shared growth opportunities – Cooperation Among Cooperatives. The American cooperative movement is alive and well, and in many cases thriving, but most often it thrives while disconnected from its peers. This creates opportunity costs and inhibits cooperatives from having an even greater impact for both economic and social progress in their communities. The time is now to bring diverse co-op sectors together and credit unions, as the largest cooperative sector, have an obligation to lead the charge.

The cooperative sector keeps dollars circulating within the local economy, provides secure employment, and is a means to revitalize and sustain healthy communities. Recent research at the University of Wisconsin Center for Cooperatives identified more than 29,000 cooperatives in the U.S. operating at roughly 73,000 places of business. These businesses directly account for $3.1 trillion in assets, 856,000 jobs, $514 billion in revenue and $25 billion in wages and benefits.

The sheer size of the United States’ cooperative movement should be an appealing market for credit unions to seek entry, beyond the financial co-op movement. Members can benefit when their credit union determines to partner and collaborate with other cooperative businesses, thereby providing opportunities for all to save money or enjoy peace of mind.

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