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Credit unions’ cooperative nature

2012-05-18T00:00:00Z Credit unions’ cooperative natureBy Tracie Kenyon IR YourTurn Helena Independent Record
May 18, 2012 12:00 am  • 

Three years ago, I supported Congress’ desire to act swiftly during the worst financial crisis since the Great Depression; like many in our citizenry I wanted my elected officials to “do something.” And what I got (as well as you) was Dodd-Frank, “An Act to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ‘too big to fail,’ to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.”

Did you know the rest of the title of that famous 2010 legislation is “Wall Street Reform and the Consumer Protection Act”? After last week’s J.P. Morgan Chase & Co. debacle, there are new concerns whether Wall Street truly was reformed and consumers actually protected. And while some may argue that what happens 2,000 miles away doesn’t impact them, most of us are acutely aware that risky actions impacting our nation’s largest financial institutions certainly make their way back to Main Street.

Ahhh, Main Street, the oft-used, idyllic descriptor of small businesses everywhere — and while the term has received a ton of political play lately, certainly most can agree that “Main Street” applies to home-grown, locally owned businesses. Cooperatives, by their very nature, epitomize that Main Street descriptor. You see, each cooperative business abides by seven principles: voluntary and open membership; democratic control; member economic participation; autonomy and independence; education, training and information; cooperation amongst cooperatives; and concern for community.

Quite simply, cooperative businesses are owned by their users and organized to provide a service without profit motive. The International Cooperative Alliance describes co-ops as: “An autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.” All cooperatives have the shared values of self-help, self-responsibility, democracy, equality, equity and solidarity.

The United Nation’s International Year of Cooperatives is 2012, and for good reason, there are cooperative businesses in nearly every sector — farm, electrical, food and financial services. So now we’re back to financial services. Were you aware that credit unions are financial cooperatives? Which means that they are owned by their depositors and created specifically to serve the financial needs of those engaged in the co-op — no stockholders, no paid board members — and what could be more Main Street than that?

And, at the same time credit unions adhere to the great principles and values listed above, they provide a safe, local option for financial transactions (all of Montana’s credit unions have federal depository insurance safeguarding deposits).

While I expect that Wall Street, and the actions of a few bad actors, will continue to plague us even in the Treasure State, it’s comforting to know that there are options for those seeking refuge in Main Street providers — I invite you to try a locally owned, cooperative business like a credit union and put your money to work in your own community.


Tracie Kenyon is president/CEO of the Montana Credit Union Network, the trade association for Montana’s credit unions and credit union organizations.

Copyright 2015 Helena Independent Record. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(7) Comments

  1. chris2014
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    chris2014 - June 26, 2014 5:49 am
    Credit unions are nonprofit organizations owned by their members. Ideally this means you’d get a better deal at the credit union. Credit union should provide great services at a fraction of the cost. However, it’s not always the case. Some credit unions just act like banks with tax benefits, and large banks may get an advantage due to their larger scale. In this case you can use Cash Advance Loan Store that can be a good solution to many financial problems.
  2. ralphy
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    ralphy - May 21, 2012 7:26 am
    why jgrdh11, would you decide that a company chartered and governed locally, is worse than a large corporation say like wells fargo, that took billions in bailout and other free government money just to protect the wealthy investors at the top of the food chain? none of the large multi-state corporations that control most of our banking institutions have any interest in local concerns or people (their employees on the local level do however.) Credit unions continue to be a great resource and a great business idea!
  3. Eddie
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    Eddie - May 19, 2012 8:13 am
    I believe that most people do know that credit unions pay all taxes except corporate income tax.  One of the many benefits of being an owner/member of a credit union means that you have a vote in the democratic process of the credit union - one member equals one vote. Part of that process is the declaration of dividends - which members pay taxes on.  It is a matter of choice; both for our members and the financial institution. If a for-profit bank would choose a credit union charter, they too could recycle the money directly into the community.
    If people would like additional information on the credit union difference they can go to -

    Eddie Black, President/CEO Trico Community FCU
  4. whatif
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    whatif - May 19, 2012 1:09 am
    So jgrdh11 do you also support taxes on churches to pay a fair share?
  5. Mick
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    Mick - May 18, 2012 2:43 pm
    For the benfit of all I.R. readers, credit unions do pay taxes. They don't pay corporate incomes taxes, because they are not for profit financial cooperatives. However, they do pay all sorts of other taxes, like property tax (which fund such things as schools, roads, etc.), payroll taxes, etc. Congress studied the tax issue several times and found that the public good (dollars generated by the savings that credit unions produce) far outweighs the potential tax revenue generated and those dollars stay in the community to pay for local goods and services.
  6. Mick
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    Mick - May 18, 2012 2:21 pm
    To jgrdh11 and anyone else interested, not for profit credit unions do pay taxes. While they don't pay corporate incomes taxes, they do pay all other taxes, such as property, payroll, etc. Congress has studied the issue several times and found that the public good (dollars generated by the savings that credit unions produce) far outweighs the tax revenue that would be generated...and those dollars stay in the community to pay for local goods and services.
  7. jgrdh11
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    jgrdh11 - May 18, 2012 7:38 am
    Ms. Kenyon, you left out a very important fact in your little letter glorifying credit unions that I’m sure most people also don’t know. That is that credit unions don't pay taxes. Thanks, but I'll do business with businesses that pay taxes that are funding all of these new government programs/regulations being put in place by the current administration. I seem to think I remember Nobama saying a few hundred times, "we should all pay our fair share."

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