Category: Credit union History

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An NCUA Camelot Era

Everyone has highs and lows in their personal and professional endeavors.

Some  of my most fulfilling moments were the ten years Ed, Bucky and I worked together in credit union regulation.  First in Illinois, and then at NCUA for three and a half years (October 1981-May 1985).

One of the educational communication efforts we launched was the NCUA Video Network.  The initial film was in partnership with the Illinois Credit Union League, What is Deregulation?, periodic productions chronicle NCUA’s priorities and information vital for credit unions to be aware of.

The final Edition XX was called The Callahan Years.  It is a live, unscripted interview by a moderator with Ed, Bucky and me.  It responds to criticisms, some voiced about our leaving two plus years before Ed’s term expired.  More importantly, it is a discussion of the many ways the agency changed to meet the new era of open competition versus government assigned charter franchises.

This 30-minute review captures the joy and learning that happens when people work well together.  I was fortunate to be a part of a team that stayed together even as we went our separate ways after founding Callahan & Associates in 1985.

The ten years we spent learning from each other  and from movement leaders was a Credit Union Camelot experience for me.

Listen to this summary of this pivotal period in NCUA and credit union history.  It is a moment of remembrance and thanks for this special professional interlude.

(https://www.youtube.com/watch?v=DrfG5PiObB0)

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IRS 990 Filings Should Be Required for All Credit Unions

Last week a proposal that federal credit unions be required, as state charters must now do, to file an annual IRS 990 was reported.

There is useful information in the IRS form that is not available elsewhere, including details about the compensation of the CEO, senior managers and board (when applicable).

Here is a link to a sample for the largest state charter SECU-North Carolina at their fiscal yearend, June 30, 2024.  The initial pages are similar to call reports. Additionally, many yes-no questions about governance link to data in the subsequent schedules.

This full report would be even more valuable if the data of the two federal credit unions closest in size, Navy and PenFed, were available for comparison.

One part of this initial data includes the question about the disclosure/availability of thefiling to the public.  Most credit unions only check this option:   Upon request  In other words, filed, but not readily available.

Information not provided in other required call reports includes:

Schedule I:  Cash grants and Other Assistance to Domestic Organizations and Domestic Governments.

Schedule J: Compensation-Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees.   Also, Loans to and/or From Interested Persons including those funding split dollar life insurance-a retirement benefit described at the end of this post.

Schedule O:  Supplemental to Form 990 includes information on governance,  elections, salary oversight process et. al.

Should Federal Credit Unions Be required to File this IRS form?

I believe it is in the interests of individual credit unions and the industry that federal charters be required to file the same data as state charters.

Here’s why this filing should be standard operating practice.

Transparency is critical to democratic governance and accountability for credit unions’ elected leadership.

Compensation for CEO’s and senior staff (and when permitted board members) is the single most important indicator of personal stewardship of members financial assets.

It is vital in organizations that receive a tax exemption to maintain accountability in return for this benefit.  Especially so when most credit union competitors pay taxes.

State charters have been disclosing this information for over five decades. There has been no downside from the practice.  Public disclosure is a responsibility in return for this significant exemption.

There are problems with the practice, however.  The due date for filing is the 15th day of the fifth month after the fiscal yearend.  That would be May 15th or November 14th for December or June fiscal years.  Many credit unions seek an extension; for example the SECU report was filed on May 29, 2025, versus the November deadline.  This means the information is often a year old.  Ideally the report would be sent to all members in their Annual Meeting information, as part of the year’s financial report.

Filings  Reviewed as Part of Examinations

Also when seeking specific reports via public sources such as Pro Publica, it is not unusual to find that some credit unions are apparently not filing.  There appears to be no regulatory enforcement or review to see if the information is correct.

Failure to file for three consecutive years results in a revocation of a credit union’s tax status-certainly a safety and soundness problem. No state charter should be approved for merger unless the most recent IRS 990 is available, as that information is critical to understanding the required Member Notice compensation disclosures.

Credit unions should support this 100% public filing for the movement.  That would demonstrate public responsibility and respect for the member-owners.

 Summary of 990 Filing Requirements for Credit Unions

All state-chartered credit unions that are tax-exempt under section 501(c)(14)(A) are required to file an annual information return with the IRS (either Form 990, 990-EZ, or 990-N), with the specific form dependent on their financial activity.

There is no asset level that completely exempts them from this filing requirement.

The specific form to be filed depends on an organization’s gross receipts and total assets:

  • Form 990-N (e-Postcard): For organizations that normally have annual gross receipts of $50,000 or less.
  • Form 990-EZ: For organizations with annual gross receipts less than $200,000 and total assets less than $500,000.
  • Form 990: For organizations with gross receipts of $200,000 or more, or total assets of $500,000 or more.

Federal credit unions, in contrast, are exempt under section 501(c)(1) and are not required to file an annual information return with the IRS.

Failure to file the required return for three consecutive years will result in the automatic revocation of the organization’s tax-exempt status. The IRS provides resources on the Form 990 series filing requirements on its website.

Split Dollar Life Insurance-Employee Benefit Description from SECU NC’s latest 990 IRS filing.

SPLIT DOLLAR LIFE INSURANCE: THE CREDIT UNION HAS GRANTED NONRECOURSE LOANS FOR LIFE INSURANCE PREMIUM PAYMENTS TO SELECT MEMBERS OF SENIOR MANAGEMENT. THESE LOANS ARE COLLATERALIZED BY THE ASSIGNMENT OF THE CASH SURRENDER VALUE OF EACH RESPECTIVE LIFE INSURANCE POLICY. THE POLICIES ARE OWNED BY THE EXECUTIVES AND THE OWNERS HAVE SOLE CONTROL OVER THE LISTED BENEFICIARIES. UPON DEATH OF THE INSURED, THE PROCEEDS FROM THE DEATH BENEFIT OF THE LIFE INSURANCE POLICY ARE USED TO PAY THE OUTSTANDING BALANCE AND ACCRUED INTEREST OF THE LOANS. THE LOANS ARE CONSIDERED NONRECOURSE AND AS SUCH, THE CREDIT UNION HAS RECORDED THE BALANCE AS THE LOWER OF THE OUTSTANDING LOAN BALANCE PLUS ACCRUED INTEREST, OR THE CASH SURRENDER VALUE OF THE LIFE INSURANCE POLICIES.

 

 

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Volume 1, No. 1 — The Bridge and Credit Union Democracy

This week I explore the integral role credit unions expected to play supporting democracy in America.  Yesterday’s post presented ten principles of cooperative action during WW II when democracies united to fight fascist dictatorships.

Today I describe how this role is framed in the first  credit union publication, The Bridge.

In the Beginning

The first national credit union journal appeared in June 1924.  Called The Bridge, the lead articles included:  Postal Employees Take to Cooperative Banking and New Jersey Credit Union Law Enacted.

But most importantly in this initial edition was the Announcement box centered on the front page.  This column gave the rationale for The Bridge’s name.  It was a metaphor referring to credit union’s fundamental  purpose to promote democracy.

Below is a copy of that front page.  After the photo  is a retyped, clearer version, of this statement of credit union’s role in America’s democratic development.

                   

 

 

 

 

 

 

 

The Paramount Function

Announcement!

May we present “The Bridge!”

Other issues will appear from time to time as the development of cooperative people’s banks throughout the United States warrants.  In seventeen states—from New Hampshire in the north to Mississippi in the south and west to Oregon—there are now credit union laws.  It is the mission of the “The Bridge” to recount further credit union progress as it develops period.

Why the name “The Bridge”? Alphonse Desjardins, great disciple of Raiffeisen and pioneer in the development of cooperative banking in North America, said in his book:  “Success for the young democracies of this continent depends upon the prosperity and worth of life to the millions of working men who compose them.” 

The paramount function of any democracy is to equalize the opportunity of those people who constitute it.  The credit union is in very fact—a bridge; it may be the bridge over which the tenant farmer travels the wide gap that separates him from ownership of the soil; it may be the way that opens the great land of Opportunity to the wage worker who finds his savings the “open sesame” to broader possibilities for himself and his family.

If credit unions, when logically developed on the broadest scale, educate great numbers of our people in the management and control of money; if they result in a better citizenship; if they serve as a great practical Americanization process—the credit union system will prove to be a bridge—over which, as a people, we may travel to a more perfect, a sound and a permanent  democracy. 

Casting around for a name for this record of credit union progress–why not—“The Bridge”

June 1924, Vol. L  No. 1

 

 

 

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The Credit Union Committment to Democracy

On a visit to Seattle a week ago, I found two credit union traces.   The first was a street level branch for BECU near the Pike Street Market on 1st Avenue.

The second  was a listing of books referencing credit unions from the business and industrial section of the Seattle Public Library.  One of the books was The Fight for Economic Democracyin North America 1921-1945 by Roy Bergengren.

Published in 1952 by this co-founder (with Edward Filene) of America’s credit union system, the book tells the founding story  describing those efforts as a crusade for economic demcracy.

As the title suggests, democracy is a key theme for this post WW II cooperative history.  It is more than a movement. Credit unions are integral to America’s  democratic aspirations for equal opportunity.

A Statement of Principles

Bergengren included an example of credit union support for war bond savings drives that proclaims this larger purpose for the cooperative system.  Here is the V for victory poster with the credit union logo and the statements of purpose.

Here are the ten principles retyped for readability.  Some are war related, but others much broader for credit union’s role with members and their communities (emphasis added).

THIS CREDIT UNION HAS ENLISTED FOR DEMOCRACY

  1. Our first objective is to win the war.
  2. We will encourage and promote thrift and the saving of money as a basic personal war service.
  3. We will encourage and promote regular saving by our members and families for security and the future.
  4. We will make loans to foster the growth of stability in our community.
  5. We will urge members to buy war savings stamps and bonds regularly.
  6. We will keep faith with the requirements of the community, state and nation in all our practices and policies.
  7. We will supply our members immediately savings that otherwise might go into channels that would drain the war effort.
  8. We will keep our members mindful that saving, with wise use of the resulting credit, will help shorten the war.
  9. We will keep the records of our progress clear, complete and available.

10.We will maintain the existing democratic character of our credit union and apply the lessons we are learning daily to our postwar democracy.

Today’s Credit Unions

Seventy-five years on, are credit unions living up to the legacy described by Bergengren and passed forward to today’s member-owners?  Is democratic practice described in this statement still a guiding principle?   Most critically, if not, what governance process has replaced it?

As demonstrated this past weekend, many believe America’s political future is at risk.  Can credit unions in their cooperative way show their commitment to maintain the existing democratic character of our credit union and apply the lessons we are learning daily to our  democracy?  

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Federal Government Shuts Down-The Importance of Options

In this latest test of political masculinity in Washington DC, the federal government has shut down.

NCUA says it is still open for business.  As evidence  the agency  reissued this guidance from over 14 years ago:

11-CU-05 / April 2011
Planning and Preparedness for a Potential Government Shutdown

This  test of political will and messaging on both sides has an open-ended feeling about it.  No one knows for how long or at what cost this standoff will continue.

This event and its aftermaths will only add to the many economic, financial and consumer uncertainties now infecting future outcomes.

This is not the first era of credit union’s navigating broad events outside their control. Recalling previous periods of change can remind that one of the most useful responses is to have options–not merely  hunker down to weather the storms.

When Options Matter

The headline reads:  Federal Credit Unions Eyeing State Charters as Rate Ceiling Hurts. It is from the Business & Finance section of the January 18, 1980 edition of the Washington Star newspaper.

The opening paragraphs:

Some federally chartered credit unions are trying to switch to state charters because the government’s 12 percent interest rate ceiling is shutting down their loan business. . .

In the last year, the 12 percent ceiling on loans has either shut down lending at some credit unions or generally restricted granting of loans in others.

Energizing the Options-NOW

Leadership is the art of changing before you have to.  The Trump administration’s one consistent theme is disruption, if not the destruction, of traditional government functions.

Recently in an NCUA board meeting the single member Kyle Hauptman suggested that it was possible the agency might have no board members in the future.

Whether that was just a hypothetical musing or confirming his interest in another government position is unknown.

But assume that scenario.  No board at NCUA.  What would the administration do?  What it has done with other vacancies, appoint an “acting Chairman” likely from Treasury.  And then begin a process of assimilation like the OCC under that Department for the agency’s future.

Just one of many possibilities created when the status quo is not longer as political checks and balances are completely gone.

To protect the independence, integrity and unique role of credit unions, it may be necessary to go back to where the movement started and gained its credibility–the state chartered system.

State regulators (NASCUS), state insurance options, trade associations and every credit union, whether state or federal, should now be assessing the ability of the states to be their primary regulatory choice.

It is critical to reinvigorate the state chartering system as a real option as the federal government and NCUA seem to be careening away from any stable leadership and certain future.

Credit unions created the dual chartering system that has evolved into serving tens of milions owners.  It may end up being their best hope for the future.  That is just one history lesson from the 1980’s.

 

 

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NAFCU’s Founding Story

From Iron Wills to Silver Anniversary, NAFCU Turns 25

Credit Union Times, April 22, 1992

By Frank Diekmann, CU Times Managing Editor

Los Angeles — They were a frustrated group when they met for that first time at the Cockatoo Inn in Inglewood, Calif. The idea had been hatched out of the disappointment felt by a handful of managers at federal credit unions who believed the dominant CU trade association had little interest in them—and even less interest in federal share insurance similar to that insuring bank deposits.

No one even knew how many of their compatriots would show up at the luncheon that was held to explore interest, yet more than 50 did. Now, some 25 years later, the proposal that federally chartered credit unions ought to be federally insured is not just accepted as fundamental—it’s one of the movement’s proudest accomplishments.  And the little credit union group that could has evolved into the National Association of Federal Credit Unions, which today has 750 members and a budget of $4.6 million.

There have been bumps, bruises and victories since the group was issued its charter in 1967 and set off on its engaging journey. The comparably huge Credit Union National Association made a determined effort first to eradicate the new association, then to absorb it via merger, and finally—conceding that the upstart was here to stay—to patch up differences so that the movement could present a unified front on Capitol Hill. . .

The CU Times story continues in these further sections on page 8:

First meeting in 1966

Putting the National in NAFCU 

Early opposition

Early support in Florida 

Trade group tension

Early signs of (some) cooperation 

An electronic future. . .

(Source: Credit Union Times Vol.  3, No.16)

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A Great Idea to Learn About the Movement

Last week CUSO Magazine announced  an imaginative collaborative initiative.  The editorial team pronounced July as credit union history month.

They issued a call for all  to submit aticles, photos and other examples of signficant events in their  history with the movement.

Here is the invitation:

Calling all credit unions! We at CUSO Magazine are officially declaring July to be Credit Union History Month, where we’ll be sharing articles on our industry’s history all month long!

To showcase the credit unions and individuals that contribute to our history and make our industry so unique, we’ll be spotlighting credit unions and credit union champions throughout the event.

Does your credit union have an interesting history? Do you have a teller who never fails to make a member’s day? Do you know of someone or a credit union in the industry doing something great? Let us know!

Email us at editors@cusomag.com, or go to cusomag.com/submit-a-story. Share what credit union or individual you believe deserves some recognition! Let’s make July a celebration of all credit unions do!

A Geat Idea

I love this imaginative effort.  In every garage, storage closet, and crammed bookshelf, credit union believers have left some keepsake of a special occasion.  It may be a cassette tape of a speech from a conference, a special edition of a cu publication that mentioned them, or perhaps the handout from a speical event.  For example, the plastic encased credit union stamp honoring the 50th anniversary of the FCU Act in 1984.

As we remember our history and how we got to today, it can only make us proud and more inspired  learning about people’s special moments with the Movement.

I would hope the participation is so voluminous that CUSO Magazine will need to increase their publication schedule from once per week to perhaps a daily to share all the examples from personal archives.

I’ll be making contributions.  For example a copy of Harold Black’s last interview as an NCUA board member in 1981 and his future ambitions. Or a brief history of the first credit union share insurance fund started in 1956 in Illinois.

We all hve special moments and people whose efforts we recall years or decades later. I’m all in.  Are you?

 

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Regulatory Relief or Disruption?

At the moment there are two strong politcal drivers animating government and the public.  One is the very anti-government,  “chain-saw” wing of the Republican party. The second force is represented by socialist Zohran Mamdani (let’s make it free) surprise victory in New York’s democratic mayoral primary election.

Both want to overturn the status quo represented by existing institutions.

Most credit unions would not support either approach. They seek regulatory reflief from CFPB or some NCUA proposals (succession planning).  But by all means let’s keep the status quo on taxation and our anyting-goes business models.

To date the only dramatic disruption of the credit union status quo was Trump’s dismissal of the two democratic NCUA baord members.   NCUA is now overseen by a single administrator.  I do not inclde the DOGE inspired staff cuts as change since credit unions have been assured it will be business as usual at the agency.

However is this the time to play it safe, preserve  advantages and avoid any major organizational rethinking?  Or is it possible to chart new courses for the cooperative system and credit unions?

The Regulatory Relief Approach

In August 2014 Mark McWatters joined the NCUA board filling the republican minority position.  Fifteen months later in February 2016 he presented a 30 minute speech to CUNA’s GAC meeting in DC.

His speech offered 21 ideas for “regulatory relief.” Many of his suggesions would sound familiar today-extended exam intervals, due process on exam appeals, total review of regs, an IG exam hotline and freeing corporate credit unions from post crisis constraints.

This is the entire 30 minute speech often interrupted by audience applause.  It would be fair to say that not much changed from this list.

(https://www.youtube.com/watch?v=LOssnO8QOnQ)

A Better Way-Challenging Assumptions about Change

To prepare the coop system for what’s ahead challenging current assumptions will be critical.

It all starts at the top by asking does anyone really believe NCUA is effectively  fulfilling it’s Mission?

“Protecting the system of cooperative credit and its member-owners through effective chartering, supervision, regulation, and insurance.”

Or it’s Vision? 

“Strengthen communities and protect consumers by ensuring equitable financial inclusion  through a robust, safe, sound, and evolving credit union system.”

The current NCUA chair states the agency is just an “insurance company.”   And every board member repeats the mantra that their “north star” is to protect the insurance fund.

Can anyone identify any NCUA efforts  to strengthen and grow the role of cooperatives for Americans?

Why not embrace this disruptive politicalmoment to create a eoop system that truly serves Americans better than competitors?  Are the prevailing assumptions about growth, scale and competitive advantage even valid?

Can we ask new questions?  And propose options that would reignite the power of the cooperative model?

Here are some ideas being debated.

  • Separate the insurance-collective capital role of the NCUSIF from NCUA.  Create a public-private corporation ( like the congressionally chartered Coop Bank) with a board of credit union and public appointees to offer savings insurance and (re)capitalization roles.
  • For those who still seek the comfort of federal oversight, authorize the option of  FDIC coverage, similar to the Industrial Loan Charter option.
  • NCUA would be a bureau in Treasury responsible for federal chartering and FCU exams. Its role would also promote credit union  expansion focused on chartering and coop entrepreneurial initiatives.
  • Strengthen member-owner roles in credit union governance and oversight through greater transparency, established member-owner rights in bylaws and explicit member ownership of the coops collective capital.
  • Convert the CLF to become a coop central for liqudity in partnership with the corporate system. It would facilitate  access to the secondary market and be under the oversight of the separate Insurance fund board.
  • Permit charter conversions to for-profit models provided members receive their accumulated capital in full upon approving the conversion.

These are initial ideas. Now is the time to rethink how current trends and, members financial needs can be the basis for a re-designed cooperative system.  Also to be pondered is what roles should established support organizations play?

Now is not the time for the tired phrase of regulatory relief. We’ve been there time and again. Rather now is an opportunity to re-design the coop system so that it can bring out its best promise for the future of its member owners.

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A Tree Planting for Future Growth

Yesterday I was invited to participate in a Yoshino cherry tree planting.   The occasion was to recognize Callahan & Associates’ 40th anniversary (founded April 1, 1985).

The site was on Haines Point a long stretch of land between the Potomac and Anacostia rivers in the District.

There were almost a score of Callahan employees there to celebrate this four decade milestone. The tree is  a symbol of the natural growth the firm projects for the future.

I was asked to turn the first shovel.

Then the staff all joined in.

A fun event, in a lovely park with people dedicated to keeping the credit union spirit alive.

 

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A Statement of Belief from 1935 by Credit Union Founders

Daryl Empen. CEO of Gas and Electric Credit Union, sent me the first Annual Report of his credit union.  The three pages describe the results for members after just six months of operations in 1935.

His comment: While we are offering services today that could not have  been dreamed of in 1935, in many ways, our mission remains the same – improving the financial well-being of our members.  We are still granting loans today for these same reasons and are still focused on improving their lives. 

Sometimes, I think we make this job too complicated instead of focusing on that purpose.  Reading this brought that back into focus for me.  

I share most the typed Report because the context and accomplisments in just six months are remarkable.  The Report discusses the state of the industry in 1935,  presents multiple member benefit examples and projects an unlimited future-in the middle of the Depression. (I added subheads.)

Annual Report of the Secretary of Peoples Power Employees* CreditUnion  as of December 31, 1935  (January 13, 1936)
To the members of the Union:

On the night of May 9, 1935, a meeting was held in this auditorium  for the purpose of discussing what has already provided progressive and far-reaching steps ever taken by the employees of this company- the voluntary banding together of a group of men and women with a common interest for cooperative saving, service and profit; in other words, a credit union. . .

From that day on, your directors have worked untiringly to make this Union an outstanding success. Much credit is due to the President, Vice President and Treasurer  who have met to transact routine Union affairs and emergency business and consider old and new problems.

CUNA, League Membership and Tax Exempt

Among the more notable accomplishments of the year are the acceptance of the Union into the Credit Union National Association and Illinois State League, the exemption from Capital stock and Federal income taxes, the election of President Weise, a director of the Mississippi Valley Chapter of Credit Unions, Treasurer Dau as executive  chairman of the same organization and reduction of borrower’s insurance from 8% to 5% retroactive to October 1st.

Employees Are Benefitting

Already several employees have been released from the clutches of loan sharks, placed on a definite schedule and are fast getting back on their feet.

Others have settled long standing hospital and doctor bills at substantial savings.

Still others are saving for vacations, Xmas savings, insurance, furniture, automobiles and other wants too long to be listed, all of which, can be accomplished at considerable reduction due to elimination of installment buying.

Page 2

. . . today, there are over 3,200 Unions in operation and new ones being formed at the rate of 150 per month. The statutes of 42 states contain Credit Union laws. In Illinois alone, there are 250, Cook County leading with 126. The Tri-City area, with only a recent start already has 14.  (Ed Note: there is no reference to federal charters in these totals.)

The basic soundness of the organization is evidenced by the fact that with banks closing in large numbers, not one failure of an industrial Union mas recorded during the depression.

The movement is only now seriously getting under way and is rapidly spreading to every state in America.

The Depression

The Credit Union has definitely arrived. The question is: Has it arrived in time?

During the past 5 years, the American people have been suffering thru a depression unknown in history. We have machinery in abundance capable of providing a plentiful living for every family in America, but because this machinery is being operated under out-moded financial theories, the result is poverty in the midst of plenty.

And the result of this is a series of mass movements on the part of millions of sufferers. It is useless to point out the futility of most of these movements  such as, “share the wealth” and “soak the rich” or that they are economically unsound.

These people want positive constructive action which will result as soon as possible in definite benefits. And that, it seems to us, is the responsibility of the Credit Union.

You members now have some idea of the relation of money and credit, and our problem is to effect the distribution, not of our present small and dwindling supply of wealth, but of the plenty which we now have the capacity to produce by means of credit.

The credit Unionist can lend his influence to discourage unsound and destructive political legislation which can only result in making conditions worse.

Frankly, your directors have been somewhat puzzled at the continued refusal of some employees to join. Our work is not seasonal and with very few exceptions, there are none of us that are unable to save at least a small sum each month.

Let us look at some of the benefits that accrue to the Union member.

The most difficult step is the first, to resolve that I will have some of my salary laid away for me each month before I can spend it. Deduction is made from your paycheck, this procedure making it even easier than bank deposits.

Once formed, this habit becomes a powerful force as all habits do and before long, the small sums that formerly trickled away, mount up and, before long, the member has a balance that will really be of some benefit to him.

Safe and Sound Operations

Next, the safety of your capital. Your treasurer is bonded. An employee applies for a loan. He must furnish two cosigners, satisfactory to the committee, or collateral, At least one of the directors is personally acquainted with the applicant, we know his reputation, financial status, responsibility and habits. In fact, we know him and his circumstances far better than any bank or loan company can ever know their customers.

In addition, he makes a wage assignment, and his life is insured. The loan is repaid by pay roll deductions, a definite amount each month. And finally, the application is carefully scrutinized and must satisfy the Credit Committee that the purpose of the loan is what we term provident.  That is, the loan will be used for some purpose that will benefit the borrower.

Page 3

Already several employees have been released from the clutches of loan sharks, placed on a definite schedule and are fast getting back on their feet.

Others have settled long standing hospital and doctor bills at substantial savings

Still others are saving for vacations, Xmas savings, insurance, furniture, automobiles and other wants too long to be listed, all of which, can be accomplished at considerable reduction due to elimination of installment buying.

An Unlimited Future

The future of Credit Union functions are unlimited. Some are writing automobile insurance, organized collective buying agencies, and deal in certain types of mortgages. Legislation is now pending in Washington for the establishment of Credit Union banks scattered over the various states to act as clearing houses and care for the details and business of adjacent Unions.

Your directors feel that the Union has accomplished a real service in this company. The employee whose mind is free of financial worry is a better workman, and that which benefits the employee, benefits the company.

In a like manner, the things that benefit the company, benefit the employee. For the first time an employee can turn to his director assured of friendly considerate help in his financial problems, instead of appealing to an outside loan company who can and do, charge him as high as 42% per year.

And let me assure you that no director will ever betray a confidence. You can discuss your needs to him with the full assurance that it will never be violated.

A loan case study in the 1935 Annual Report

Consider two options. An employee decides to buy a certain article for $200.00. He can buy it on the installment plan, paying $5.00 per week 40 weeks, or he can buy it through the Credit Union.

He can buy the same article for cash and get approximately 20% off the installment price for $160.00.  He borrows $160.00 at 1% per month on balances for 40 weeks or ten months. The cost of the loan is $8.80, so this desirable article has cost him $168.80.

Buying at the rate of $4.00 per week, he pays $200.00, plus 6% for a year, so that the installment price is $212.00. The Credit Union member pays $168.80 and the non-union member pays for the same commodity from the same company $212.00. The difference is $43.20 or a total of over 20%.

The Savings Advantage

Or, place $200.in a bank. At the end of a year, they will pay you $5.03. Placed in the Union, the same amount at our present earning capacity would produce $10.00