I’ve been looking at the HM Treasury document published last month as part of its public consultation on the future of credit unions in Britain.
The government is asking, among other things, about credit union legislation and the future of the common bond concept. Or, in short, it’s asking what needs to be done to make credit unions more secure and more effective.
I do admit to the occasional worry about our credit unions. I worry on the one hand that, as the trend grows for them to become bigger and more professional, they are heading off in exactly the same trajectory as our building societies, where member ownership became little more than a legalistic formality. I worry about my credit union no longer feeling as though it is ‘mine’, or rather ‘ours’. But then conversely I worry that strategic oversight by elected volunteer boards isn’t really up to the job of looking after its members’ money in a properly efficient way. A friend complained the other day that she’d been waiting a month for her (and my) credit union to sort out a problem with her account. The letter she’d sent had brought no reply.
I suppose I have another worry, too, and that is ironically caused by the very enthusiasm with which the government recently has been embracing the credit union idea, as the answer to everything from loan sharks to small business finance needs. As coops around the world know very well, too much top-down influence (and funding) doesn’t always produce the most appropriate answers.
It’s interesting is to see what we can learn from countries where the credit union movement is more developed, so it’s fortuitous that the latest issue of the Journal from the Society for Co-operative Studies which has just arrived through the post has a useful piece by Paul Thompson on credit unions in the US. What’s particularly interesting – and perhaps slightly depressing – is to see how closely the three challenges Paul identifies for the US movement mirror what I see as the issues here too.
The first, according to Paul, is the challenge of fostering credit union philosophy (he calls for credit unions to have a ‘philosophical compass’ to keep them on the right path of providing honest reliable service to members, and avoiding staff convenience and self-aggrandisement).
Secondly, he identifies a challenge of maintaining credit union democracy as they grow in size and lose direct contact with members. And thirdly he detects a governance challenge for management boards (“During the past 40 years, boards of directors have been playing catch-up in terms of understanding their credit union’s business”).
Back to the UK: the government’s consultation period lasts until September 1st.