My mentor was my dad, who owned a small business in Milwaukie, Oregon. He taught me the importance of businesses being involved in their community and the joy of making a difference in people’s lives. He was not surprised when I chose to work in credit unions. Today I’m CEO of Oregon’s second largest state-chartered credit union, and I love going to work every day, making a difference in the lives of our members, employees and the communities we serve.
Credit unions have been so focused on serving communities and providing excellent financial services to members that we have failed to tell our story—who we are and what makes us different. Here are some key facts I hope you find interesting.
1. Credit unions can make special arrangements when times get tough
Many credit unions were started by pioneer member-owners who began the business in the garage of someone’s home and pooled their funds in a shoebox. The focus was always clear: providing access to credit for people who could not seem to get it at the local bank. Fast forward and today you find thousands of credit unions all over the country and thousands of stories annually about members who need help—and get it—from their credit union.
Even in this tough economy, credit unions understand that “bad things happen to good members.” In the last three years, credit unions have continued to loan and work diligently to help members who have lost their jobs to keep their autos and stay in their homes. These efforts have helped stabilize families during the worst economic downturn since the Great Depression.
At Oregon Community, we helped more than 500 members in 2012 alone with special workout loans that adjusted rates or payments on auto loans and mortgages.
2. You actually own the place
Credit unions are member-owned, not-for-profit financial cooperatives. That means everyone who becomes a member owns a piece of the rock. No shareholders. No paid board of directors focused on profits. Every decision the credit union board and management makes takes members into consideration first. Decisions such as convenience, interest rates, branch locations, technology, products and services are all made to support the needs of the membership. Over a million residents in Oregon alone belong to a locally owned credit union, and that number is growing every day.
3. Credit unions give back
Credit unions are a positive influence on all financial services in the communities where they do business. Here in Oregon, credit unions hold a small percent of market share, but even so, we effectively help to control costs and maintain the rate environment for everyone. Research shows that when credit unions are in a market, all loan and deposit rates are positively impacted.
In 2012 Oregon credit unions put more than $110 million back into the pockets of members as a result of lower loan rates, free checking, higher rates on savings and other benefits. That works out to an average of $152 per credit union household. That’s real money our members didn’t spend to get access to vital services like credit and a safe place to keep savings. Given the cost of groceries and gas these days, that’s a great reason to be a credit union member.
4. Credit unions are the kindler, gentler financial institutions
Credit unions have a well-deserved reputation for superior service and being the kinder, gentler financial institutions. But it’s not just our members who benefit. Community service is in our DNA. For example, Oregon Community Credit Union is the single largest corporate scholarship sponsor at the University of Oregon. UO is where our membership started. Our members believe in supporting education, so it only makes sense to give back through scholarships for Oregonians, many of whom are the first of their families ever to go to college.
Along with supporting other scholarship programs in 2012, Oregon Community also donated over half a million dollars, and our employees volunteered over 2,000 hours to help our members have the opportunity to live in a vibrant and prospering community by supporting many nonprofits.
5. Big banks favor big loans
The odds of a startup getting a loan from the largest banks in America aren’t favorable. A Harvard Business School report, “The State of Small Business Lending: Innovation and Technology and the Implications for Regulation,” declares that large banks approve only 33 percent of loans under $100,000, compared to 60 percent approved by small banks. This finding was based on a FDIC survey of business owners.
The explanation for the discrepancy is simple: large banks are focused on sourcing and scaling loans over one million dollars, cross-selling products to their customers, and driving down costs through standardized operating procedures and technology.
The simple truth is that millions of Americans have figured out that being a member-owner of a credit union is their first choice when it comes to financial services.
People who really care
Instead of running from bank to bank hoping to get a small business loan, explore credit unions in your area. They are far more focused on serving their communities in a way that will expand economic activity. They know the community and their decisions are made locally.
What you will find is that credit unions don’t spend big bucks on promoting themselves, but the odds are you will receive the loan you need to build your business from people who have your back.