Will credit unions embrace an 8th cooperative principle?
Credit unions need to rethink diversity and inclusion in the industry.
For one, it would be worthwhile to add diversity, equality and inclusion as an eighth cooperative principle that guides credit unions, argued Maurice Smith, CEO of Local Government Federal Credit Union and Civic FCU, during a panel at Inclusiv’s annual conference in Los Angeles on Tuesday.
That idea was floated last year but met with some pushback. Critics said that diversity and inclusion were already covered in the existing seven principles of voluntary membership; democratic member control; members’ economic participation; autonomy and independence; education, training and information; cooperation among cooperatives; and concern for community.
Smith argued such an assertion should be viewed in the same lens as a review of any legislation written long ago – by looking at the intent.
“The cooperative principles were written in 1844 – 20 years before the emancipation of the slaves in America, and 80 years before women were allowed to vote,” Smith said. “So if you look at what was going on in the country at that time, it is difficult to say those that wrote the principles were thinking about diversity and inclusion. A little bit or redundancy is not the worst thing that could happen.”
But the idea could be gaining some traction. A week prior to the Inclusiv conference, the Credit Union National Association board voted to support the notion of an eighth principle, Smith noted.
A second panel on Tuesday at the conference highlighted immigration with an emphasis on how credit unions can help this demographic.
“Immigration is everyone’s issue. It is everyone’s business,” Manuel Pastor, professor of sociology and American studies and ethnicity at the University of Southern California in Los Angeles, said during the second panel.
According to Pastor, credit unions could help immigrants become naturalized citizens. He said some 11 million people are eligible for naturalization, but have not even begun the process, for various reasons including cost.
“People do not have the liquidity to pay for fees and lawyers,” Pastor said. “Give people the information and resources. If you just did that, you would make a tremendous difference.”
Dr. Linda Lopez, chief of the Office of Immigrant Affairs for Los Angeles Mayor Eric Garcetti, told attendees research by the Chamber of Commerce has found immigrants are an “economic engine.” She said Garcetti’s office wants to create an “inclusive economy,” but government cannot do things alone. Collaboration must be part of the equation.
“Sometimes you have to grab people by the hand and help them,” Lopez said. “Many immigrants put cash under their mattress. Figure out how to walk with those people, listen and introduce them to financial products and services.”
Carla Decker, president and CEO of DC Federal Credit Union since 2001, said during the diversity, equality and inclusion panel there are potential members waiting for affordable financial services, including immigrants and other underserved segments of the population.
“Unless people make a commitment to change behavior, nothing changes, so commit to having a more diverse, equitable credit union,” she urged.
Samira Salem, senior policy analyst for CUNA, said there is a business case for diversity, equality and inclusion. She said credit unions need to be diverse to be relevant and competitive, noting research has found organizations with high levels of diversity in their leadership are more likely to have success.
“In addition, having different perspectives represented helps organizations avoid risk,” Salem said.
Monica Davy, director of the National Credit Union Administration’s Office of Minority and Women Inclusion, said one of the first things when she joined the office in 2015 was Google “credit union diversity. But she did not find many entries.
“Four years later, there are some very exciting things going on,” Davy said. “We have momentum, but we have to make sure we don’t just talk about diversity – there has to be action to follow.”
Davy said NCUA has created a “Credit Union Diversity Self-Assessment,” an anonymous report that has nothing to do with any examination. The information is sent in aggregate to Congress – with no CU identified.
“We want to see where the credit union industry is when it comes to diversity,” Davy said. “Please use it as a tool to spark conversation at your credit union. This is important, because if you do not intentionally include, you unintentionally exclude.”