Christmas is quickly approaching and to mark the occasion,thousands upon thousands of Christians will be flocking to churchto celebrate the birth of the Christ Child. Many will do so becauseof their allegiance to a community and worshiping together as thebody of Christ. Others will do so merely out of obligation.

Still, for many others, Christmas will be one of only a few daysduring the year – outside of Easter and the occasional funeral –that you'll ever find them physically in a church. Yet, when thisparticular group is asked about their faith, they will quickly andreadily identify themselves in the same way as those having anallegiance or practicing only out of obligation. They'll respond,Catholic, Anglican, Lutheran, Methodist, and so forth. Sad buttrue, they're missing the mark.

Simply giving oneself a label isn't an immediate qualificationas the “Real McCoy.” Such labels must be earned by embracing acreed of beliefs and espousing a certain behavior as defined by thegroup or its leaders. Just like in any club or organization, it'sone's adherence to the totality of rules, guidelines and practicesthat defines membership. A cafeteria approach – selecting what youpersonally what to observe or not – is no substitute for the realthing.

And isn't that the same when we consider our credit union andits cooperative heritage? While we like to think our credit unionis a cooperative and boast of it being so, does our credit unionactually live up to all the established criteria defining acooperative business model or is it a cooperative in name only?

Let's face it, not all credit unions are the same, nor do theyall function in a consistent and similar manner. I've had CEOs tellme time and time again that many of their volunteers don't evenknow what a cooperative is. If so, how can one set and influencethe strategic vision of the organization without knowing thecriteria defining its identity and guiding its very business?

Intentions might be of the highest caliber, but if one's boardor staff have no understanding and appreciation for what makestheir shop distinct in the financial services marketplace – thatwhich is its core value proposition; that which is the fundamentalreason why all credit union people do what they do – then the words“Credit Union” in its name may be a misnomer.

The Litmus Test

Back in the U.K. in 1844, in an effort to identify what makes anorganization a cooperative, attendees at the Rochdale conferencedeveloped a list of principles defining a cooperative businessmodel. Simply put, the resulting seven “fundamentals of acooperative” have become the standard practice of any organizationlabeling itself a cooperative.

The Seven Credit Union Cooperative Principles are:

1. Voluntary Membership
2. Democratic Member Control
3. Members' Economic Participation
4. Autonomy and Independence
5. Education, Training & Information
6. Cooperation among Cooperatives
7. Concern for Community

How Do You Measure Up?

I've tapped the website of my friends at BECU for a concisedescription of each cooperative principle. Let's review them whileyou evaluate how well your shop measures up to the standard.

1) Credit unions are voluntary, cooperative organizations,offering services to people willing to accept the responsibilitiesand benefits of membership, without gender, social, racial,political or religious discrimination.

Seems to me it would be rather difficult for a credit union tonot live up to this principle.

2) Cooperatives are democratic organizations owned andcontrolled by their members, one member one vote, with equalopportunity for participation in setting policies and makingdecisions.

Democratic; owned and operated by their members . . .really?

3) Members are the owners of the credit union and contributeto, and democratically control, the capital of the cooperative. Forcredit unions, which typically offer better rates, fees and servicethan for-profit financial institutions, members recognize benefitsin proportion to the extent of their financial transactions andgeneral usage.

Simple enough; the more one uses the products and services, themore one benefits from the credit union.

4) Cooperatives are autonomous self-help organizationscontrolled by their members. If the cooperative enters intoagreements with other organizations or raises capital from externalsources, it is done so based on terms that ensure democraticcontrol by the member and maintains the cooperativeautonomy.

So, if democratic control and cooperative autonomy areessential, then how does one make sense of the role of theregulator and its ability to place a credit union intoconservatorship? In such cases, has the democratic control by theowners been surrendered?

Naturally, given insurance funds and the laws and regulationsfor financial institutions in the United States, this principle maybe a bit murky. However, does this mean that a credit union is nottruly autonomous, democratic and independent?

5) Cooperatives provide education and training for members,elected representatives, managers and employees so they cancontribute effectively to the development of thecooperative.

A no-brainer; the more one understands the credit union andknows how to effectively tap its services, the more successful theywill become. Providing training and education is an investment thecredit union makes in its own future and potential success.

6) Cooperatives serve their members most effectively andstrengthen the cooperative movement by working together throughlocal, state, regional, national and internationalstructures.

From membership in the local league and the national associationto collaboration with cooperatives in other sectors, the creditunion business model requires participation, not isolation.However, can the concept of co-opetition, instigated by overlappingfields of membership, be viewed as a friendly excuse for notpracticing real cooperation?

7) While focusing on member needs, cooperatives work for thesustainable development of communities, including people of modestmeans, through policies developed and accepted by themembers.

For-profit financial institutions are required by the CommunityReinvestment Act to participate in the local community. For creditunions, it's in our DNA. The more credit unions can help the localcommunity to experience growth and success, and the more a creditunion can help raise the level of financial literacy and thequality of life, the more the credit union model stands to benefitand grow.

Walk the Talk

No one ever said being a successful credit union is an easyventure. It's particularly difficult today given all theregulations, financial challenges and hurdles constantly thrown atthe movement by for-profit competitors. Each and every one of usshould be particularly proud of our “Credit Union” name and what itembodies in today's financial services marketplace. It's a namereflecting a cooperative style of business defined by seven veryimportant principles.

How well does your credit union measure up to those principlesand walk the talk? Are you taking a cafeteria approach in the wayyou contribute to shaping your credit union and its businessculture, or are your actions based on a passionate allegiance tothe cooperative principles and values?

Don't fret if you find yourself falling short! Now is a goodtime to make a New Year's resolution that can help ensure yourcredit union remains the Real McCoy!

WaltLaskos is a relationship-building executive and principal ofThe LaskosGroup in Temecula, Calif.