Buy Local-At Your Credit Union
A trend is taking place that is custom-fit for credit unions, yet one that most credit unions are missing. It's called localization or "buy local".
Across the country and in nearly every segment of the economy, organizations are moving money, ideas, businesses, and work back to their own communities. They are moving away from the large, dominant, centralized companies and toward their local communities.
It's a logical outgrowth of the search by many to set things right in our country after several years of knowing that something was wrong. Consumers feel it. Members feel it. We don't need complex economic analysis to tell us this. We know it because the economic events since 2007 have left a mark on most Americans.
We're emerging from those years of malaise with a new set of questions and beginning to formulate new answers and new models. In food, for example, we have the slow food movement and the explosion of "eat local" farmers' markets, the rebirth of local and sustainable agriculture (www.slowfood.com). According to the American Independent Business Alliance, locally owned businesses on average return to the community 45% of each dollar spent compared to 13% at a chain. And every dollar spent at a locally owned business returns five times that amount within the community through city taxes, employee wages and the purchase of materials, supplies and services from other local businesses.
Communities across the country are looking for ways to generate their own electricity. They're installing community-scale wind turbines and solar arrays. According to the New Rules Project, 20 states now allow cities and counties to finance energy-efficient retrofits and on-site renewable energy generation and repay the loan with a property tax assessment.
It is happening in banking and capital too. Yes, many of us still have a mega-bank credit card in our wallets. But in the wake of the big bank busts, Americans tend to question whether the interests of the shareholders of Chase are in line with their own interests. Organizations like New Rules (www.newrules.org) are working across industries to bring many things back home to a community scale and location that does look out for the interests of the people of Main Street. This includes banking.
In capital, there are well-funded organizations working to bring our money home to our communities. BALLE (www.livingeconomies.org) works to build networks of local business communities that promote local economic development. Their work spans energy, agriculture and community capital. The Slow Money Alliance works to bring capital home to rehabilitate the American family farm, after decades of decline (www.slowmoneyalliance.org).
Credit unions were founded on this principle. Scale permits true intimacy with our members. We serve no other master, no other markets, and we have grown to the size and sophistication that allows us to compete toe-to-toe with the services of the big banks. Yet we remain a growing but small voice in the financial services market.
Credit union market share was just under 6% in 1999 and it is just over 6% today. In that same period, FDIC-insured banks grew assets by over $6 trillion. That means that they addedthe equivalent of nearly seven whole credit union systems in a decade. The scope of that number alone stuns the senses. Yes, credit unions doubled assets to $900 billion, but still-$6 trillion.
Now is a time credit unions can seize this opportunity-add our work to the growing trend. We have the right scale and the right relationship with the communities we serve. Through the careful preservation of the "member first" credo and thoughtful innovation, credit unions can join in greater number the local-first efforts to re-emphasize our position at the heart of our communities.
Our guest blogger today, Peter Barnard, is a partner with 320 Market, LLC.