Two Days in Manchester: The Tale of My Trip to America's Credit Union Museum

After dreaming of taking such a trip for the better part of a year and planning it for the past few weeks, last Wednesday I finally left my home in Burlington, Vermont for a two day visit to America's Credit Union Museum in Manchester, New Hampshire. It being northern New England, nasty weather was naturally on its way, so I hit the road in the early afternoon to avoid the impending deluge of ice and snow, and arrived in time grab dinner and drinks with my New Hampshirite friend and fellow mutualist nerd Julia Riber-Pitt.

After some good beer and interesting conversation at Jillians (a local restaurant and pool hall), my mile-long stroll back to the hotel was livened by a parade of gorgeous old historical buildings. Manchester is a classic 19th-century New England industrial town, with enormous, long red-brick mills (now repurposed for a variety of functions) lining both sides of the river that flows through the center of the city. Indeed, America's first credit union, the original site of which is now occupied by the museum, was established to serve the French Canadian immigrants who worked in those mills, and many of the houses that lined my path were built in that era as well.

Credit Unions and the Wall Street Occupation

My first real awareness of and appreciation for the credit union movement was a direct outgrowth of the 2008 financial crisis. Like many Americans, I was deeply shocked by both the fraudulent excesses of the banking industry and the collusion of government regulators which combined to plunge our economy into a recession from which we've yet to extricate ourselves. In order to try and better understand what had happened, I began reading widely in economics, and, in the process, stumbled upon the powerful alternative to the current financial order that is the credit union idea.

The thing that initially fascinated me about credit unions in the context of the financial crisis was the fact that they were, on average, far less negatively impacted by it than for-profit banks. Sure, they struggled as the economy turned sour and a few failed, but their woes were nothing compared to the apocalyptic crisis that engulfed the for-profit banking sector.

After a fair amount of research, I came to the conclusion that this advantageous outcome can be largely attributed to credit unions' cooperative ownership structure. In a for-profit bank, the depositors and the shareholders are two different groups of people. The shareholders, who legally have an absolute say in the direction of the company, generally want their bank to take risks which have the potential to pay off in the short term. On the other hand, depositors generally prioritize safety over returns, but, because they have no say in a for-profit bank, the banks took on too much risk for their own good, which ultimately led to the massive Federal bailout.