Episcopal Church Foundation Vestry Papers - for leading congregations

At first glance, parishes and banks look as different as apples and oranges. Upon a closer look, however, the differences run far deeper than superficial appearances. One institution is a collective — a cooperative—in which individuals pool their treasure, time, and talents to create a social and spiritual community that serves its members and their communities in their search for a deeper relationship with God. The other is a bank. A bank lends money for the purpose of making profit for profit’s sake. The very mission of the bank is to concentrate community wealth in its investors’ hands. Its corporate vision is to grow larger so it can lend more and concentrate more wealth. This is not to say all banks are bad, or that none of them maintain a deep commitment to their communities. But make no mistake, the bank serves the dollar above all else and worships profit.

So why is it then that so many parishes choose to place their deposits with banks? Surely some just unthinkingly maintain the legacy banking relationship because, well, “that’s just the way we’ve always done it.” And, at the end of the day, that legacy bank will protect the money, provide access to it, and maybe even offer a loan at a somewhat advantageous rate. Other parishes and their vestries might recognize the misalignment between the missions of a bank and that of the church but remain unaware that other options exist. As a matter of good governance, vestries would be well-advised to review their choice of financial institution on a regular schedule and make changes where warranted. At these times, consider the credit union.

Credit union communities are not-for-profit cooperative “banks” that spread resources among its members, serve their communities, and are democratically governed by their members. Does that sound like a parish and its vestry? It should. Credit unions are founded upon the cooperative principles which include voluntary and open membership, member control and participation, member education and training, cooperating with other cooperatives and concern for community.

These principles mean that while credit unions provide all the traditional banking services like taking deposits and giving loans, they do not divert profit from the community and place it in the hands of investors. Credit unions instead look to their founding principles and return those profits back to the membership in the form of advantageous rates on those deposits and loans, help members achieve financial skills, and invest in the health of their communities.

But why would a financial institution do such seemingly Christian things? How do they even survive in a capitalist economy? Credit unions need look no further than the Federal Credit Union Act of 1934 which established credit unions as cooperative associations established “for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes.” What more provident purpose can exist than offering credit to help individuals and parishes alike achieve financial independence so they can focus on securing their earthly and spiritual futures?

It is welcome news then that the Episcopal Diocese of New York has successfully opened the New York Episcopal Federal Credit Union — the culmination of an idea that began 35 years ago at the 1988 Episcopal Church convention, received support with resolutions in 2004 and then again in 2014 at the diocesan conventions and, nearly ten years later, the granting of a charter by the National Credit Union Association. In its own words, the New York Episcopal Federal Credit Union, “will be a sustainable financial institution that will meet the needs of the people and institutions in our Diocese with affordable loans, and banking services, and financial wellness seminars and counseling.” In addition to affordable loans and financial counseling, the credit union will, “reach out to the marginalized and unbanked among us who are not now welcomed by commercial banking institutions.” This is, “an ongoing demonstration of our commitment, as Episcopalians, to address financial inequality and to make reparations for the economic barriers erected by structural racism within our society.”

A common misperception of credit unions is that they are the “bank of last resort for the underserved and underbanked.” This credit union will welcome and serve all parishes, parishioners, and participants in any outreach ministries across the Diocese of New York, there are no caps on income or deposits. And deposits are insured through the National Credit Union Administration (NCUA) at the same levels as the FDIC. Perhaps this year, as vestries convene to make choices about what to do with their money, they may also see this as an ideal time to consider where to put it. Thankfully for parishes, parishioners, and participants in the Diocese of New York, the New York Episcopal Federal Credit Union has now become a reality.

The Cooperative Principles for Credit Unions — copied from the National Credit Union Foundation

“The Foundation, along with many credit unions and system partners, have adopted variations of the Cooperative Principles. These variations are not meant to replace the standardized set of seven, but rather bring great relevancy to how these principles impact the credit union business model. We also work to educate credit union employees and volunteers on how these principles should be applied now and in the future to better serve our members and communities.

“To this end, in 2019 the Credit Union National Association and National Credit Union Foundation adopted a board resolution to support diversity, equity and inclusion as a shared credit union cooperative principle, and for credit unions continuing to have a responsibility and take a leadership role in building and serving more diverse, equitable and inclusive communities.

Listed below are the modified Cooperative Principles for credit unions:

VOLUNTARY & OPEN MEMBERSHIP
Credit unions are voluntary, not-for-profit financial cooperatives, offering services to people willing to accept the responsibilities and benefits of membership, without gender, social, racial, political, or religious discrimination.

DEMOCRATIC MEMBER CONTROL
Credit unions are democratic organizations owned and controlled by their members. Each member gets one vote, no matter their financial status, to help make the organization’s policies and decisions.

MEMBER ECONOMIC PARTICIPATION
Members are the owners of their credit union and contribute to its capital. Members, not shareholders, benefit from their credit union’s profits in proportion to their relationship and use of its products and services.

AUTONOMY & INDEPENDENCE
Credit unions are independent, self-reliant organizations controlled by their member-owners, not outside stockholders. When making business deals or raising money, credit unions never compromise their autonomy or democratic member control.

EDUCATION, TRAINING & INFORMATION
Credit unions provide education and training for members, elected representatives, and employees so they can contribute effectively to the cooperative. Credit unions place particular importance on educational opportunities for their volunteer directors, and financial education for their members.

COOPERATION AMONG COOPERATIVES

Credit unions serve their members most effectively and strengthen the cooperative principles by working with other cooperatives through local, state, regional, national, and international structures.