Cliff Rosenthal
This is What Credit Union Democracy Looks Like
This afternoon, my daily routine was disrupted in a good way by
the annual meeting of North Carolina’s State Employees Credit Union
(SECU), the $50-billion, 2.7 million member, 85-year old credit union
that is the nation’s second largest.
I became a cooperative idealist in the 1970s, first as a food
co-op organizer until I was introduced to credit unions when I was
charged with organizing one for the farm worker nonprofit I worked for.. .
. I was enthralled with credit unions as democratic, egalitarian
institutions, created to empower individuals excluded from the
for-profit banking system.
I was fortunate enough to be hired by the National Federation of
Community Development Credit Unions (rebranded as Inclusiv after I
left), becoming CEO in 1983 and serving for nearly 30 years. . .
Over the years , , , I went to my share of annual meetings of our
member credit unions, usually not very well attended (except if there
were refreshments). It was great to meet members, and it was my job, but
truth be told, it was not the liveliest way to spend an evening or
weekend afternoon.
My Life’s Work
The 90-minutes I spent watching SECU’s annual meeting on YouTube
reminded me why credit unions became my life work. One after another,
SECU members debated recent changes instituted by the board, most
controversially, the introduction of risk-based pricing—the nearly
universal practice of U.S. credit unions which charge members different
rates according to the credit score-informed tier they fell into.
Not SECU. For nearly its entire history, it offered the same
price for the same loan product for all members. It was a simple,
time-honored, financially successful practice, that fueled SECU’s steady
growth. . .
But for some members and the credit union’s recent leadership,
that was not good enough. Several speakers argued that the credit
union’s savings rates were not competitive; one spoke of his children
leaving SECU for better rates at a bank. How would the credit union grow
and—well, compete—if it didn’t raise savings rates to retain members? .
. .
Speaker after speaker—members of 30 years, 40 years, 50
years—spoke passionately about what SECU had meant to them and others, a
place to get the best possible rate even when they were starting out in
life, were struggling financially, or had marred credit.
True, risk-based pricing was everywhere in credit unions
today—but for those with long memories, it had not always been so. They
fully understood that better returns on savings were available
elsewhere. But they were staying.
One-tier pricing is radically egalitarian—providing those with
fewer financial means the same rates enjoyed by those with immaculate
credit scores and ample resources. Except it is hardly radical, and
hardly new.
One speaker denounced the strategy as “socialist”: This was North
Carolina, he argued, not Russia, China, or Cuba. But I heard no “woke”
or progressive rhetoric, only the testimony of people who cared deeply
about their fellow North Carolinians and wanted to help them better
their lives. “People helping people”—not simply a brand slogan, but an
expression of human solidarity.
I spent my career working with small, community-based
institutions. As the credit union “movement” became the credit union
“industry,” with assets and membership disproportionately concentrated
in a minority of institutions, I reluctantly concluded that my ideals
and passion were nothing more than a relic.
Today, I thank the members of SECU for the inspiration and hope they gave me.
© Clifford N. Rosenthal
... and every SECU member! 
Unfortunately, here "We" go again!
Well, it has now been six months since the SECU membership approved a resolution of polite inquiry [see October 11, 2022 post] at the 2022 Annual Meeting. Probably time to pause and take stock of what has occurred and what hasn't. So many moving parts, it can get confusing, right?!?