1970). We had the opportunity to visit with Paul recently and ask him about his book and most importantly, what lessons we can learn today from his writing.
Please tell me about your book.
Development of the Modern U.S. Credit Union Movement 1970-2010 covers the transformation
of credit unions from small, largely volunteer-run cooperatives, offering limited services, to mainstream financial institutions. These developments included share insurance, an independent federal regulator, national credit rating bureaus, FOM expansion, new powers and products like share drafts and credit cards, and computerization. These developments fostered the consolidation of the movement, resulting in a decline in the number of credit unions from more than 23,000 in 1970 to some 7,000 today. At the same time membership has risen from some 23 million to 96 million.
What did you learn from writing the book?
I learned many interesting, unpublicized details about credit union development and also the human side of the story from interviewing participants in those developments. I gained new respect for the people who guided the movement during what was a turbulent and challenging period. Most of all, I gained perspective on the broad sweep of modern credit union history.
Why should someone read a book about credit union history?
You will find it a fascinating story of triumphs and failures, folly and wisdom, and a bit of skullduggery. Second, I believe credit union work is a mission of service to others. Reading credit union history can strengthen your dedication as you see how people of many different backgrounds worked together to create the movement as we know it today. It also puts one's current job into perspective as part of a broader movement that has contributed significantly to America's democratic progress. And finally, there are practical lessons to be drawn from knowing how credit unions have responded to inflation, recession, and other challenges.
What are some of those practical lessons we can learn from the book?
First of all, the power of cooperation. As Edward A. Filene, a founder of the American movement, put it: “As individuals, we are helpless drops of water, but together, we are a Niagara of power.” Through cooperation, we get the laws and regulations that provide a favorable environment for credit union growth. And by working together and sharing ideas and information, everybody is strengthened. Shared branching is an excellent example of credit union cooperation. Second, we should hope for the best and plan for the worst. History shows a succession of economic bubbles and downturns, no matter how government tries to maintain an even keel. Credit unions that are cautious in investments, not chasing earnings, that maintain a high capital to asset ratio, that have a response plan for unexpected contingencies, and that focus on member service weather challenges best.
Who are some of the influential credit union leaders you discuss in the book and what can we learn from them?
Chairman Ed Callahan and his assistants, Bucky Sebastian, and Chip Filson, provided strong and visionary leadership at NCUA during the early 1980s. They were dedicated to the credit union idea and applied many of the lessons they had learned as regulators in Illinois as they organized the recapitalization of the federal share insurance fund, gave credit union boards more powers, and loosened field of membership restrictions. They set the template for NCUA leaders to come. From them, we can learn the importance of dedication to the cause, learn to look forward rather than nostalgically trying to hold onto the past, and learn what good regulation can accomplish. On the trade association level, I'll mention CUNA President Herb Wegner, who in the1970s led the movement into the age of share drafts, credit cards, and ATMs, helped by people like Jim Jukes of Iowa. Again, they demonstrated dedication to the credit union idea and a vision of what could be.
Your book is about the credit union past. What do you see for credit unions in the future?
While I'm cautious about predicting the future, I do think technology will continue to shape the movement, and those credit unions that go with the flow will do well as long as they focus on member service and operate conservatively. But they and other financial institutions will need to do a better job of protecting their files against hacking and malware. With government overstretched in its obligations and the emphasis on deficit reduction, taxation will continue to be a legislative issue. On the one hand, taxation might force credit unions to be more efficient, but the tax exemption acts as an incentive for credit unions to remain focussed on service, not profit. So taxation might encourage more credit unions to drift from their moorings and convert to thrifts or banks.
How can readers obtain your book?
It's available in softcover and e-book version (not Kindle) from lulu.com. Lulu.com
also carries my credit union novel, The Credit Union Lady, which provides a look at the human side of the credit union movement of the 1920s-50s.