Why I Love Credit Unions

I finally “moved my money” from Wells Fargo to Lafayette Federal Credit Union. It’s local. It’s half a block from work. Charlotte, the branch manager, already knows my name.

Mind you, I never actually opened an account at Wells Fargo to begin with. I opened my account 20 years ago with a regional bank. But it was bought by Bank of America. I then switched to another regional bank. But it was bought by Wachovia. Last year, Wachovia was bought out by Wells Fargo. I’ve never been a big fan of the mega-money institutions. But ever since they drove our economy into a ditch and did it, in part, by taking the homes of poor people and minorities, I felt the biblical prophets giving me a kick in the pants. Hence, the next stage of my financial pilgrimage.

Credit unions, as we know them today, originated in Europe in the 1800s as financial self-help cooperatives among small business owners and farmers in particular locales, geared toward providing for and protecting their economic sovereignty. Eventually credit unions came to be organized around seven principles: 1) voluntary membership, 2) democratic governance, 3) member control of capital, 4) autonomy and independence, 5) education of members and public in cooperative principles, 6) cooperation between cooperatives, and 7) concern for the local community.

“If love is wise,” wrote Pope Benedict in his 2009 encyclical Charity in Truth, “it can find ways of working in accordance with provident and just expediency, as is illustrated in a significant way by much of the experience of credit unions.”

The bottom line for a good credit union is that it exists to help people, not make a profit. For example, I became a member of my new credit union when I bought a $50 “share.” As member I can vote for the governing board, which decides whether surplus should be distributed to members or reinvested. My credit union hosts a financial literacy center, is a member of the Credit Union National Association, and generates tens of thousands of dollars for the Capital Area Food Bank.

One of the first questions to ask when assessing one’s own financial social responsibility is: How quick does my dollar leave my neighborhood? Or as one community organizer put it: How many of your neighbor’s hands does your money pass through before it leaves your immediate community? Generally speaking, the bigger the financial corporation, the quicker your dollar exits.

If you want to build up local economies—independent businesses, public services, local government, arts and culture—then you want to keep those dollars circulating locally for as long as possible.

Another money question, taught to me by Equity Trust founder Chuck Matthei, is: With whom are we called to enter into economic relationship? As a Catholic, this question is foundational. Any “capital” (labor plus land plus social equity) that comes under my stewardship is to provide for the simple, dignified livelihood of me and my dependents and to put at the service of those who are poor.

In Charity in Truth, Pope Benedict reminds us that “grave imbalances are produced when economic action, conceived merely as an engine for wealth creation, is detached from political action, conceived as a means for pursuing justice through redistribution.” In other words, when governments don’t properly regulate markets, then those same governments can’t ensure that their citizens are adequately provided for. The pope rightly criticizes unregulated capitalism as the “conviction that the economy must be autonomous, that it must be shielded from ‘influences’ of a moral character.” The market is a tool that we use to allow fair encounters between people who want to exchange goods and services of equivalent value. But as Christians we think it must also exercise distributive and social justice, based on biblical mandates, in order to build a stable and nonviolent society.

My next financial step is to establish long-term savings in community development financial institutions and funds. CDFIs specifically target underserved populations and provide financial instruments where I can direct my “interest” toward particular needs such as inner-city education, low-income housing, environmental protection, and micro-loans.

In the end, I’m trying to develop a love that is wise by putting my money where my heart is.

Rose Marie Berger, a Sojourners associate editor, is a Catholic peace activist and poet.

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