It’s sad to think that “let the buyer beware” should apply to credit unions, which so many progressives conscientiously choose over Wall Street–operated banks, but recent news bears out that warning: when a North Carolina credit union declared that credit unions should lead the way in transparency and made public its CAMEL rating (a metric of its health), the National Credit Union Association immediately took steps to prevent members from getting that information. How disappointing.
Historically, the co-op model has offered a workplace theory far superior to capitalism. Not driven by the profit motive, co-ops ought to be worker-empowering, democratic, healthier, less expensive, and more responsive to employee and community needs— valuable traits during this period of capitalist meltdown.
At this economic moment, as I found myself wondering whether I should get seriously involved in a co-op again, I began to investigate a few in Northern California near where I live. What I found inspired me, and also inspired caution.
Co-ops can sometimes go right, but they often seem to go wrong in one of two ways. The first is by becoming adolescent circuses (Berkeley’s legendary Barrington Hall, for example, has become an excellent venue for punk bands but remains unattractive to the elderly and most people with kids). The second way they go wrong is by becoming successful.
Some agricultural co-ops and credit unions have become big, professional, and distant from the membership. Does anyone think “Progress! Democracy!” upon hearing the names Sunkist, Land O’Lakes, or Ocean Spray? Sad to say, some of these purported co-ops resemble monopolistic cartels that promote only the interests of their own restricted memberships. Several years ago, Ocean Spray even faced an antitrust lawsuit from Northland Cranberries, which alleged that the cooperative had unlawfully monopolized the cranberry products industry to the detriment of its competitors and consumers.
The credit union I currently belong to, First Tech, is technically a co-op, but I never receive a dividend, and recently I was handed an onerous set of new fees, including a fee if my savings account didn’t show activity every single month. Over the years, First Tech has switched hands several times (it was called University and State Employees and then called Addison Avenue before it was given its current name). With each buyout, the credit union became more indistinguishable from a bank. Except for structural differences mandated by law and a slightly higher interest on certificates of deposit and checking accounts, First Tech feels exactly like a bank.
A Mixed Bag
Shouldn’t a co-op be a haven of sanity in the financial maelstrom? Some co-ops—though forbidden to invest in certain kinds of real estate—managed to sink along with the banks.
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