Labor Unions in the African American Credit Union Experience: Oral History Tour Take-away #1

After a month on the road interviewing African American credit union elders (and doing some archival research on the side), I finally returned home to Vermont last Friday with my head full of ideas, observations and insights gleaned from the journey. While I have a feeling I'll be continuing to process the full implications of what I've just experienced for some time to come, I figured I'd write a few posts in the coming days on some of my take-aways. First up: Labor Unions in the credit union movement.

When thinking about credit unions for which the place of employment is the common bond, prior to the trip I'd mostly bought into the assumption that they essentially fulfilled a human resources function for employers. While the credit union I wrote my Masters thesis about was founded by a labor union, I'd assumed it was an anomaly, and that most employer common-bond CUs were rooted in a certain level of employer paternalism.

However, as my trip progressed, it became increasingly clear that the significance of the role played by labor unions in at least African American credit union history, and possibly the history of credit unions more generally, has been distinctly under-recognized. Upon reflection, I believe that this is partly the fault of the fact that the most easily accessible documentary sources from the early movement, such as many of Roy Bergengren's books, were often promotional materials aimed at convincing employers to offer credit unions free space in their facilities, and thus played up the human resources angle.

However, a theme that emerged in many of the interviews I conducted over the course of my trip was the important role played by labor unions in both the establishment and governance of many of the credit unions I encountered. To start with, my very first interviewee, Milton Carr, was not only the former president of the Arabi Sugar Workers FCU, but had also been a union officer prior to his retirement. One has to be a member of the union at the plant to join the credit union, and he was quite explicit about the ways in which the credit union benefits the bargaining position of the union by contributing to the financial stability of the members, as he lays out in the following clip concerning his credit union's "strike fund" savings program:

The Disclosures Sing "Credit Union History"

I approve:

A Coming Attraction: Credit Union History Since 1970

Although Ian MacPherson's 1999 book on the development of the global credit union movement partially bridges the gap, one of the most gaping holes in contemporary credit union historiography has been the lack of a synthetic treatment of the American movement's recent history. While Moody & Fite's The Credit Union Movement remains an absolutely vital resource, an enormous amount has happened since the last edition was released in 1984 that has the potential to shine new interpretive light on the whole sweep of the movement's development.

One of the benefits of a synthetic work of history is that it organizes the jumble of changes that characterize its subject's development into a coherent, meaningful narrative structure. While people often enter into ferocious debates about the exact parameters of that structure, having some sort of understanding of the mechanisms by which the world came to exist in its current form is a powerful aid to decision-making. Without such a framework, it is impossible to learn from the past beyond the scope of simple personal experience. As George Santayana put it more than a century ago, "when experience is not retained ... infancy is perpetual. Those who cannot remember the past are condemned to repeat it."

(Credit Union) Historic Boston

As this last week was my partner (and fellow history nerd) Allison's February break from teaching, we decided it'd be fun to take a short trip to Boston from our home in northern Vermont. Alli is a social studies teacher with a particular passion for photographing old New England cemeteries (some samples of her work in Vermont can be seen here), so our activities were primarily focused around the various sites on the Freedom Trail. The colonial-era buildings and burying grounds were quite interesting, but, fortunately for myself and the readers of this blog, she was kind enough to oblige me in taking some detours to locate a few sites of historical importance to the credit union movement.

My quest was initially inspired by the knowledge that a plaque honoring Edward Filene was located somewhere on the Boston Common. Since that park was on our itinerary anyway, I found a webpage that provided the plaque's location, and we set out in search of Ed.

Unfortunately, the directions on that page turned out to be a filthy lie; the plaque is nowhere near the intersection of Tremont and Temple Streets. After making a few loops, we stopped into the visitors center, but the woman behind the desk was clueless as to the existence of the memorial. Though it was beginning to feel like a wild goose chase, we decided to circle through the Common one last time.

Victory at Last!

This time, lady luck was on our side, and we stumbled upon the memorial near the intersection of Carver and Boyleston across the street from a piano store and adjacent to the Central Burying Ground. Erected by the Credit Union National Association in 1959 (25 years after the organization's founding at Estes Park, CO in 1934), the monument reads:

Edward A Filene

1860-1937
Author, Scholar, Outstanding Citizen of Boston and Public Benefactor
Acknowledged as the Founder of the Credit Union Movement in the United States
This Tablet Erected by the Credit Union National Association
May 1959

Book Review - Comme D'Or: The First Fifty Years of Holy Rosary Credit Union by Michael Behrendt

At the end of my recent trip to America's Credit Union Museum in Manchester, NH, museum director Peggy Powell gave me a copy of the Michael Behrendt's recently published book Comme D'Or: The First Fifty Years of Holy RosaryCredit Union. According to Ms. Powell, the book is representative of a new trend in the historiography of credit unions. For the past few decades, when written about at all, the primary focus of credit union history has been at the level of the national and state-level movement institutions. More recently, however, Ms. Powell has encountered a number of folks working on detailed histories of individual institutions, of which Comme D'Or is an excellent example.

Self-published by Holy Rosary Credit Union of Rochester, NH to commemorate its fiftieth anniversary, Comme D'Or is accessibly written and structured in a way that reveals it's author's solid understanding of the nature of the credit union model. At a time when uncertainty about the nature of the difference between banks and credit unions is far too common, it would be quite easy for a writer coming from outside the movement to write the history of a credit union as if it were that of a bank, with the economic story taking center stage.

Fortunately, Michael Behrendt doesn't fall into this trap. The city planner of Rochester, NH by profession with a book about that city's architectural history already under his belt, Behrendt brings an enormous depth of knowledge about, and appreciation for, the social and cultural history of Rochester to Comme D'Or. As a result, while the economic aspects of Holy Rosary Credit Union's development are not neglected, people and community are (very appropriately) at the core of the narrative.

A Primary Source Mother Lode: The St. Francis Xavier University Online Archives

In the early 20th century, St. Francis Xavier, a small Catholic college in Antigonish, Nova Scotia, stood as one of North America's most innovative and active institutions working in support of cooperative development. Beginning in the mid-1930s, Roy Bergengren began corresponding with some of the leading lights at St. Francis Xavier (particularly Father Moses Coady), which led to a great deal of mutual influence between the American credit union and the "Antigonish" movements.

Given this history, I've been wanting to make a trip to Antigonish for a while now in order to dig through the Coady-Bergengren correspondence that is housed in their archives. Though such a journey remains in the realm of idle fantasy for the moment due to lack of funds, I was extremely excited today to discover that they have made a substantial chunk of their collection available to the public through an online archive!

Best. Anniversary. Present. Ever.

My girlfriend tried her hand at making me a t-shirt tribute to Roy Bergengren, with epic results. CU History nerds, eat your hearts out, cuz this baby's one of a kind!

Occupy Your Credit Union! A Tactic for Activist Members

    While the financial crisis and economic malaise of the past few years has been truly devastating, one silver lining has been the development of increased awareness of the democratic cooperative model of financial services embodied by the credit union movement. Hundred of thousands of people responded to the call to "move your money" around Bank Transfer Day, and both the rate of growth and the stature of the credit union movement is higher than it has been in a very long time.

    All of this is very exciting! However, it only represents the first step in achieving a just financial system. Being a credit union member is not basically the same as being a bank customer who gets better rates and fewer fees; rather, at its core, credit union membership means that you own your bank. With that ownership comes not simply a claim to your fair share of the profits that Bank of America would otherwise have shipped off to its shareholders, but the right to have an equal say in determining the policies and priorities of your credit union.

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 Union Songs from the Founding of CUNA

After braving the icy roads back to Burlington, VT from my trip to America's Credit Union Museum in Manchester, NH, I have so many things to write about! A full recap of the trip will be forthcoming [*Update: Read it here*], but, in the meantime, I figured I'd treat Credit Union History readers to a fun find: a collection of credit union songs found in Edward Filene's diary from the Credit Union National Association's 1934 founding convention in Estes Park, CO! Included are such toe-tapping numbers as:

"The Old Loan Shark" (to the tune of "The Old Gray Mare")
"Credit Union Fellowship Song" ("Sidewalks of New York")
"Edward A. Filene" ("Yankee Doodle")
"Credit Union, Parley-Voo" ("Hinkey-Dinkey, Parley-Voo")
"Theme Song for Estes Park Credit Union Conference" ("The Man on the Flying Trapeze")
"Song of the Credit Union Widow to her Husband" ("Till We Meet Again")
"Song of the Credit Union Spinsters" ("Silver Threads Among the Gold")

I have to say, I'm looking forward to The Disclosures putting out a grind-core cover of one of these classics. Until that happens, though, I'll leave you with a recent video from those modern toubadours that continues the proud tradition of credit union people writing goofy songs about our movement...

Book Review - Cumet by Roy Bergengren

Written on the ship purser's portable type-writer while returning home from his own European tour in 1933, Cumet: A Fantasy Having to do With Credit Union Mass European Tours (CUMET being an acronym for Credit Union Mass European Tours) is a thirty-four page pamphlet very much inspired by Roy Bergengren's anxieties over the potential for renewed world war. Written in a light, conversational style and hitting on many of the themes treated in greater depth in his 1932 book We the People, Cumet is, in essence, a proposed strategy by which the credit union movement might contribute to heading off such a conflict.

At the core of his proposal is the idea that "all the peoples of the earth would, if they could, live at peace. I believe that they need only to know each other--for they have common hopes and joys and sorrows and a common urge to find happiness." (34) In a world that is rich in relationships that cross international boundaries, Bergengren argues that war would difficult to justify, since people would viscerally understand it as an attack upon people they care about rather than faceless foreigners.

"Ownership Salience" in Credit Unions (and Cooperatives)

An extremely interesting and unique characteristic of credit unions (and cooperatives generally) is the nature of their relationships with their member-owners. While often understood simply in terms of members' contractual and legal rights, the movement's history clearly suggests that the ways in which members conceptualize their relationship to their credit unions can vary extremely widely between institutions with identical governance structures. Such differences, in turn, can often exert profound influence on the developmental paths of different credit unions, and thus must be understood as driven by subjective, rather than structural, factors. One such dynamic that that I've found particularly useful and compelling when considering credit union development is something I've come to refer to as "ownership salience."

By this I mean, simply, the intensity with which a credit union member psychologically and behaviorally internalizes the fact that he or she owns their credit union. When ownership salience is entirely lacking, members simply treats their relationship with their credit union relationship as identical in kind to the customer relationship with a bank or other non-member owned business. This sort of person is a credit union member simply because it is the most attractive option on the market, and, when thinking about their institution, he or she uses the pronouns "they" and/or "it" (as in, "They made a donation to the food shelf"). If such a person has a negative experience, their natural response is no different than it would be at a bank: take their business elsewhere.

Book Review - People Helping People: A History of the Maine Credit Union Movement

"People Helping People," is a well-used credit union slogan, and also, it turns out, a common title for books about state movements. Edward M. Walters used the phrase for his 2009 history of credit unionism in Texas, but it's first appearance seems to be on John W. Zerillo and Ted Desveaux's 2004 book People Helping People: A History of the Maine Credit Union Movement.

Though commissioned and published by the Maine Credit Union League, Zerillo and Desveaux's work is especially interesting because, unlike many other trade-association supported histories (including the aforementioned work by Walters and Moody and Fite's CUNA-sponsored national history), it doesn't treat the development of its sponsoring organization as a proxy for the history of the movement as a whole. While the Maine Credit Union League is the focus of one quite readable and interesting chapter, the most fascinating parts of the book come when the authors tell stories of early credit unionism that highlight the culture of the early credit union movement.

My Coming Trip to the Credit Union Museum: Call for Suggestions

Ever since I first discovered the existence of America's Credit Union Museum in Manchester, New Hampshire, I've been dying to check it out. Unfortunately, life kept getting in the way of my dreams of archival adventuring, but I've decided to put my foot down and make January the month I finally get to take in the American credit union movement's premiere historical institution for two glorious days. My hope is that this trip will provide inspiration for a number of Credit Union History posts, including (but, thanks to the inspirational magic of primary sources, not limited to):

• A video interview with museum director Peggy Powell.
• A review of the museum's exhibits (hopefully with photos!).
• A brief guide to the resources available in the museum's reading room.
• A book review of Roy Bergengren's single known work of fiction, Cumet: A Fantasy Having to do With Credit Union Mass European Tours (as it turns out, Paul Thompson's The Credit Union Lady is not the only credit-union themed novel ever written). Self-deprecatingly mentioned in several of his subsequent non-fiction books, Bergengren's novel supposedly proposes the idea of credit unions organizing trips to other parts of the world in order to help create international understanding. I've been fruitlessly searching out a copy of Cumet for a while, but it has been impossible to find; however, it turns out that the Museum has one, and Ms. Powell has graciously offered to open the glass case and allow me to read it!

Additionally, I'd happily welcome any suggestions from readers of Credit Union History as to other thing to look for and/or what you'd like me to write about. Leave your suggestions in the comment section, on the Facebook page, or drop me an email.

***UPDATE***

I finally got the Credit Union History "Tip Jar" working. If you'd like to help fill my gas tank for this trip, click on the "Google Checkout" button on the right hand of the screen...

Book Review - Cooperation Works! by Nadeau and Thompson

Cooperation Works! How People Are Using Cooperative Action to Rebuild Communities and Revitalize the Economy, by E.J. Nadeau and David J. Thompson, is an accessible and wide-ranging overview of the cooperative movement in the United States as things stood at the time of the book's publication in 1996. Including both a general discussion and a number of specific anecdotes, each chapter is devoted to a specific form of cooperation, including such topics as senior housing co-ops, community-owned sports teams, and employee owned enterprises.

In addition to the value of the overall comparative perspective promoted by the diverse subject matter of Cooperation Works!, the book's chapter on community development credit unions (CDCUs) is particularly valuable to those interested in credit union history. Though the historiography of American credit unions in general is pretty sparse, extra little has been written about the CDCU model. This neglect can likely be attributed to the fact that, with their relatively recent origins and a tiny fraction of the asset-size of traditional credit unions, CDCUs are relatively easy to relegate to a footnote or an aside. When discussed at all, they are mentioned in passing as a project that emerged out of the "War on Poverty" era before the narrative returns to the main credit union story.

Common Bonds and Conflicting Identities: The Establishment and Development of the Vermont State Employees Credit Union

Given that I busted my butt writing this document for the better part of a year in order to finish my masters degree, I might as well make it available for public consumption. Read the whole thing here (pdf); the Abstract follows the break:

Occupy and Credit Unions: Next Steps

As readers of this blog are well aware, I've been actively advocating a synergistic relationship between the Occupy and credit union movements ever since since the former kicked off in Zuccotti Park on September 17th, and the developments since that date have been truly exciting. Beginning in early October, "Bank Transfer Day" spread widely through the Occupy movement's networks, which not only resulted in hundreds of thousands of people moving their money from commercial banks to credit unions, but was also critical in making activists aware of the basic differences between banks and credit unions. This awareness has fed activism that continued long after November 5th, with Occupiers across the country supporting the credit union model with teach-ins, pro-credit union pickets of banks branches, and using credit unions almost exclusively as the institution where movement funds are kept.

Given all of this, a recent development in San Francisco has been framed by many as the logical next step: members of the Occupy movement there have decided to establish their own credit union. Called the Peoples Reserve Credit Union, the founders stated that the "goal of this project is to encourage San Francisco residents, businesses, as well as nonprofit and city agencies to keep their money out of the big banks and to redistribute that money locally. Initial services will include micro-loans for the working poor and homeless, and subsidized student loans at low interest rates." After starting with 500 members, the founders aspire to have over 2,000 within a year.

Banks vs. Credit Unions in the Financial Crisis - with Graphs

In recent discussions of the relative merits of using banks or credit unions, one argument in favor of the latter asserts that they generally fared better than banks in the financial crisis. The reason for this, the argument goes, is that for-profit bank shareholders are only liable for losses up to the value of their investment, while they stand to profit from the returns on both their own investment as well as the depositors' funds. Thus, since it's rational to take greater risks when gambling with other peoples' money than with your own, for-profit banks tended to take on risky investments during the real estate bubble.

By contrast, since they are owned by their members, the conflict of interest between shareholders' desire for greater returns and depositors' desire for increased stability simply doesn't exist in credit unions. They thus tended to take fewer risks during the boom, and, as a result, didn't take as grave of a hit as commercial banks when the economy went bust.

In order to see if this thesis reflected the actual experience of the financial crisis, I crunched some numbers from the NCUA and FDIC. The results, which were published yesterday by the Motley Fool, seem to confirm credit unions' relatively superior performance in the bust. Read the full article, complete with pretty graphs, here.

Bank Transfer Day: A Model Victory for the Occupy Movement

Frustrated by a number of negative experiences involving her bank, LA gallery owner Kristen Christian decided to draw the line on October 4th, 2011, when she created a Facebook event entitled "Bank Transfer Day." Calling for people to move their money from banks to credit unions on November 5th, the action quickly went viral. By the intended date, more than 70,000 people had indicated their intent to participate on the Facebook event page, and the Credit Union National Association estimated that more than 650,000 new accounts were opened in the month before November 5th (more than had been set up in the entirety of 2010), and a further 40,000 people joined on the day itself.

When trying to explain this phenomenon, the dominant narrative coming out of both the credit union movement and the mainstream media as a whole is that Bank Transfer Day was primarily a reaction to the decision by large banks (most visibly Bank of America) to institute debit card fees. This ham-handed and poorly-executed policy change, the story goes, struck a nerve and instigated normally passive banking consumers to take Christian's call to heart by revolting en masse and moving their money to credit unions.

Dropping a Little Credit Union History at the Occupy Burlington "Bank Transfer Day" Teach-In