CUs Have Long History of Helping Small Businesses

I find it funny that bankers and their growing army of lobbyists and lawyers are whining about credit unions encroaching on the business lending arena. (“Nevada CUs, Stung by Banker Rhetoric, Try to Counter Publication Bias,” 8/4/04, Credit Union Times and “Banks Overly Worried About CUs’ Entry into Small Business Lending”, Credit Union Times, 8/26/04 online). First, if banks are doing such a good job, why are so many small businesses now choosing credit unions for financing? And second, since when is serving small-business owners the exclusive domain of banks? Mindful that bankers are easily confused by the facts, a little education on credit union history nonetheless might be helpful. After all, we can trace our roots to the cooperative movement of the mid-1800s. Consider the English weavers who created their own cooperative society in 1844: They offered shares to members so they could raise money to buy goods at below-retail prices and then sell those goods to their members more cheaply than local merchants. This co-op model was replicated and ultimately led German credit union pioneer Hermann Schulze-Delitzsch to form “people’s banks” so shop owners, tradesmen and craftspeople could obtain affordable loans. Closer to home, it’s a familiar story that banking injustices had become unbridled in rural North America by the turn of the 20th century, with farm families confronting immense problems trying to enter the market system. It fell to leaders such as Alphonse Desjardins, Edward Filene and, later, Roy Bergengren to create credit union cooperatives to meet the lending needs of working-class people, including those whose livelihoods came from their small businesses. As a matter of fact, the failure of Bergengren’s own small candy business (he couldn’t afford to buy sugar) undoubtedly influenced his life’s work of helping workers, farmers, and tradesmen receive low-cost financing. Over the years, helping small businesses has been so much a part of the credit union movement that it is, frankly, comical to suggest we should ignore our small-business members. The banks don’t need more mouthpieces – they just need a couple of history teachers. Jane C. Melchionda President/CEO EasCorp Woburn, Mass.