NEW YORK (5/6/09)--Despite continuing challenges facing U.S. credit unions, financial cooperatives worldwide have a “good story to tell” in terms of stability, member service and their ability to “spread” financial risk, according to Pete Crear, World Council of Credit Unions (WOCCU) president/CEO.
Crear took the credit unions’ positive message last week to a United Nations (U.N.) meeting of global economic experts on “Cooperatives in a World in Crisis.” “Credit unions have not contributed to the creation of the global economic crisis,” Crear told participants representing 13 countries. “However, through their roles as member-owned and operated financial cooperatives, credit unions are contributing to the healing process.” The group met for three days to examine the role and capabilities of cooperatives, including credit unions and financial cooperatives, to counter the effects of the ongoing economic downturn. Participants, comprising primarily academics and cooperative association executives from the U.S. and other countries, submitted reports before the meeting, outlining the role of cooperatives in their countries. To view WOCCU's report to the U.N. work group, use the link. Crear’s paper evaluated how credit unions in nine member countries and regions have been affected by market disruptions due to the financial crisis, their inclusion in financial rescue programs and changes made to deposit insurance for both banks and credit unions relative to the crisis. To WOCCU’s knowledge, credit unions have not accepted government funds for bailout purposes, Crear said. “Credit unions’ overall approach of accepting member deposits, providing loans to members and generating strong capital bases has kept the majority of them out of harm’s way as bad investments take their toll on the for-profit financial services industry,” Crear said. “Their conservative practices are driven by a philosophical mandate to place member needs ahead of institutional profits.” WOCCU also supported the U.N.’s International Year of Cooperatives, proposed for 2012. The U.N. celebrated its first International Day of Cooperatives in July 1995 to recognize and reaffirm cooperatives’ role in economic, social and cultural development. The event would expand that recognition to better draw attention to major global issues and the role cooperatives can play in addressing them, Crear said. “Declaring 2012 as the International Year of Cooperatives would shine a more intense light on cooperatives and credit unions worldwide,” Crear said. “Such a ‘blessing’ by the U.N. and its member governments would lead to greater support for cooperatives and credit unions, enabling them to better serve members.” Last week’s meeting was held in response to U.N. resolution 62/128, “Cooperatives in social development,” which introduced the concept of the International Year of Cooperatives. The resolution also urged the strengthening of cooperatives worldwide and the development of increased public awareness of their overall socio-economic impact.