DMV for Credit Union Democracy (DMV4CUD)

As candidates running for the Lafayette Federal Credit Union (LFCU) Board of Directors, both David Zuckerman and Chris Bohner are advocating for a number of reforms:

 

• Increased transparency, including disclosing executive pay annually, providing quarterly financialinformation to the membership, and posting the minutes of all non-confidential board meetings on the Lafayette website.

 

• Commitment to a “living wage” policy for all Lafayette employees.

 

• Commitment to maintain Lafayette as a non-profit, democratic and cooperative financial institution, and opposition to any future plans to convert Lafayette to a bank. In 2006, Lafayette tried to convert to a bank, and several of the current Board members were on the board during the attempted conversion.

 

• New products and services including upgrading the online banking system, financing ‎for affordable home solar and weatherization, new products tailored toward the region’s growing immigrant community, financing for coops and other socially-responsible businesses, and exploring partnerships with non-profits seeking to increase credit to low- and moderate-income members.

 

• Bylaw changes to promote democratic participation in the governance of the credit union, including voting by mail and electronically (currently members must attend the meeting in person to vote), and moving the location of the annual meeting from a private country club to a location easily accessible by Metro.

 

• Increase Lafayette’s financial education for the membership, and the establishment of new member-owner volunteer committees to provide feedback and new ideas to the Board of Directors.

 

 

 

Restoring Democracy

In order to benefit from the democratic principles by which credit unions are structured, a credit union and its Board of Directors must actively work to increase and sustain member-owner participation. Credit unions are unique financial institutions, providing their member-owners access to financial capital while being rooted in the principles of transparent, democratic governance. Our credit union should strive to be a significant local institution in which community members can practice, experience, and observe democracy in action - the credit union will be a more sound financial institution as a consequence. Our delegates are tasked with enacting the following policies intended promote a democratic, participatory culture at the credit union:

1. Accessible Annual Meeting: The credit union’s annual meeting should be held in a convenient location for both the Board of Directors and member-owners. The location should be accessible by public transit, and additional transportation should be provided from each branch. The annual meeting should provide translation services for non-English speaking member-owners (who meet a certain percentage threshold of overall membership), as well as childcare services for those member-owners that require it.

2. More Transparency: The credit union should take the necessary steps to ensure that both its board and annual meetings are aimed at not only allowing but encouraging member-owners to participate in credit union administration. Annual meetings should be live-streamed as well as archived electronically for interested member-owners. Requests for information, as permitted under NCUA regulation, should be standardized so that member-owners are aware of any necessary costs to retrieve such information. Credit union email addresses for each board member should be established and posted on the credit union's website and in all branches. Minutes of all non-confidential board meetings should also be posted on the credit union's website. We also believe that compensation for senior executives should be disclosed annually to the membership.

3. Democratizing Philanthropy: Member-owners should be directly involved in determining sponsorships and philanthropic contributions. The Board of Directors must retain the responsibility of allocating the budget for sponsorships or philanthropy, since the board has real-time access to the credit union’s financial standing. However, where funds go should be the purview of the member-owners. Member-owners would be able to nominate organizations or projects, and all member-owners would be allowed to vote. These steps will democratize the community giving process and reorient it towards valuable community projects, rather than those that only the Board of Directors sees as significant.

 

Conscious Lending

Part of the credit union's mission is to create for member-owners a source of credit for provident and productive purposes. To ensure this principle, the credit union should continue to provide non-predatory lending while offering new products to extend credit to underserved local communities. These products include:

1. Non-Predatory Lending: Both the payday loan and international remittance markets are currently dominated by small and corporate predatory lenders. The area in which the credit union serves includes immigrant and first-generation populations that are forced pay expensive fees to send remittances home to their families. And the area's working poor often take out payday loans with exorbitant interest rates to pay for immediate needs before their paychecks arrive. The credit union should explore ways to undercut these lucrative services by offering them at lower rates as a nonprofit.

2. The Cooperative Model: The credit union should hire a loan officer focused exclusively on lending to cooperatives, worker-owned businesses, and social enterprises that pursue community and environmental goals. The credit union should also offer more support to women- and minority-owned businesses in low-income areas. A certain percentage of business lending should go to cooperatives and other businesses with alternative ownership structures, like ESOPs (businesses with Employee Stock Ownership Plans), all of which mirror the democratic structure of the credit union and provide stability for local communities.

 

Ease of Access

In the current financial landscape, credit unions must compete with for-profit banks on not only products offered but also on accessibility, security, and convenience. The credit union should actively invest in modernizing and simplifying services to member-owners. Our delegates are tasked with enacting the following policies intended to modernizing the member-owner experience:

1. Member Eligibility: Potential member-owners should be able to determine their membership eligibility fairly quickly by visiting the credit union’s website. The ‘Membership’ page on the website should feature a simple membership checklist with a link to an easy-to-read map that shows all geographic areas of eligibility. And there should be a ‘Membership Wizard’ that asks the potential member-owner a series of questions, including entering their address, to determine eligibility.

2. Easy Online Banking: Online banking services shouldn’t be ancillary for credit union member-owners, as the internet is increasingly becoming the way most people manage their money and interact with their bank or credit union. Online banking should be featured more prominently on the credit union’s website and signing up should be much simpler. The how-to sheet for online banking included in the packet mailed out to new members should be more visual, and accommodating for non-English speakers.

 

Sustainability

Continuing a long history of serving underserved markets, credit unions across the country and of all sizes are involved in energy efficiency lending. The credit union should target lending for energy efficiency to reduce greenhouse gas emissions, assist low-income households, and stimulate the economy by creating new local jobs. Through offering member-owners fairly-priced loans to make energy-saving improvements to their homes and businesses, the credit union will not only be investing in well-performing assets, but also establishing stronger relationships with the areas the credit union serves.

 

Last Updated: 4/19/2014