Ask Joel Dahlgren how to build a bigger, more financially stable, better-capitalized credit union and this Minnesota lawyer's advice is surprising: regularly give away capital to members.
"It works in the cooperative world, and it would work for credit unions," said Dalhgren, founder of Black Dog Co-Op Law and a longtime consultant to cooperatives. He also recently co-authored "Credit Union and Cooperative Patronage Refunds," a report issued by the Filene Research Institute.
"A co-op's earnings belong to the members. The co-op does not exist for its own aggrandizement. It's the members money," said Dahlgren. "Dividends are very common in the cooperative world–in most co-ops members expect a patronage refund. I was surprised how infrequent it is in the credit union world."
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