Why Closing a Newspaper is Like Merging a Healthy Credit Union

This July 7 article in the Washington Post described the impact on the community of the decision to close Youngstown, Ohio’s only local newspaper, the Vindicator, after 150 years of operations.

Some reactions and consequences described in the article were the following:

“Mere moments after the start of the hastily called community forum, the tears started to flow.

“Gobsmacked,” was how one Youngstown reader described her horrified reaction to the surprise announcement,

“The Vindy connects us all. A community without a strong, central newspaper is missing leadership — and a big part of its identity.”

With the Vindicator’s closing, Youngstown will become an unfortunate first: a good-size city with no daily newspaper of its own.

For Mark Brown, the Vindicator’s general manger, the loss is personal, devastating.

His family has owned and run the paper for 132 years. His mother, Betty Brown Jagnow, the publisher who is well into her 80s, still comes into the office regularly and has called the decision “gut-wrenching.”

“It’s all we’ve ever known and all we ever wanted to do,”

The Vindicator’s 44-member newsroom staff digs deep into local issues, and has won plenty of state awards for general excellence, for reporting and commentary, and for its website, which has no paywall.

“I’m scared for the community” the paper quoted Mark Brown.

What this means, said Joel Kaplan, associate dean of Syracuse University’s Newhouse School, “is that no one in that community will be covering, on a regular basis, school board meetings, city council meetings, the cops and the courts. Democracy, as we know it, is about to die in Youngstown.”

“Scared for the Community”

The facts of the Vindy’s demise are not unusual. Decades of declining circulation, $23 million in accumulated financial losses, and no local alternatives for the community to turn to.

Whenever a locally-focused, community-based organization is closed whether by merger, failure or sell out, the community’s future is undermined. Some may respond that there are multiple mass media and social news sources to keep the community informed. But that misses the point of local ownership and focus. Local ownership matters: leadership is responsible to local priorities, not a faraway corporate business model. Local employees bring expertise and commitment to success; a legacy of  pride, community well-being and knowledge is created and sustained.

While newspapers and credit unions have very different business models, the continued merging of strong, well-managed and long-serving credit unions into much larger organizations often hundreds of miles away or even out of state, sacrifices one of the most important leadership and economic factors underwriting the viability of local towns, subdivisions and even small cities.

The myth of “expanded services” used to justify management’s surrender of a charter and assets created over generations undermines cooperative principles critical to credit unions remaining the alternative to for profit financial firms. These “voluntary” mergers violate the fiduciary, democratic foundation of cooperative governance. They are little more than commercial transactions benefitting not members, but individual and or corporate ambitions.

Like the loss of a town newspaper, every time I read about the merger of well run, established and successful credit unions, I too become scared for the community: in this case the cooperative option.

P.s. added 8/2/19

Today’s press announced a merger of two credit unions 1,200 miles apart with no historical sponsor or other connection. The $754 million Vibrant Credit Union, chartered in 1935 to serve the employees of John Deere is located in Moline, IL. Infinity FCU ($333 million) is located in Westbrook, ME, and was founded in 1921 to serve telephone workers. Why would members in Maine want to use outlets or services in Illinois? How does having an East Coast hub in Maine benefit members in Illinois? The reasons for the combination raise the question: whose interests are being served by combining two well run, strong community charters with no common heritage or prior relationship, and literally time zones apart? This disclosure should make interesting reading for the members of Infinity who must vote to give up their 100 years of local control of policy, resources, and leadership in the state of Maine.

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