Issue - World Council of Credit Unions

Fall/Winter 2007
The International Credit Union Magazine
Latin America’s Largest CU Blossoms
World CU Conference: Highlights from Calgary
Australian CUs Cultivate Cooperative Securities Market
Table of Contents | Fall/Winter 2007
Vol. 9. Issue 2
Publisher
Janette Klaehn
Editor
Mike Muckian
Contributing Editor
Lindsay Seabrook
Graphic Designer
Denise Knudsvig
Contributing Writers
Brian Branch
Valerie Breunig
Jennifer Brink
Mike Celichowski
Victor Miguel Corro
Pete Crear
John Ikeda
Janette Klaehn
Lindsay Seabrook
Proofreader
Ellen Ferch
For information concerning
Credit Union World contact:
World Council of Credit Unions
5710 Mineral Point Road
Madison, WI 53705-4493 USA
PO Box 2982
Madison, WI 53701-2982 USA
Telephone: (608) 395-2000
Fax: (608) 395-2001
E-mail: mail@woccu.org
Website: www.woccu.org
Publishing Information
Credit Union World is published two times a year by
World Council of Credit Unions. Send submissions,
requests for subscriptions and address changes to
Mike Muckian, Editor, at mmuckian@woccu.org.
©2007 World Council of Credit Unions, Inc.
PERSPECTIVES
4Executive Forum
A Glimpse of the Future
by Pete Crear, President & CEO
27Global Viewpoint
When Cooperation Makes
Business Sense
by Brian Branch, Executive
Vice President & COO
INTERNATIONAL DEVELOPMENT
6World View
Blossoming Enterprise
Latin America’s Largest
Credit Union Grows
Through Cooperation
19
by Jennifer Brink
10Outside of the Box
Fostering Global
Credit Union Growth
Gates Foundation-Funded
Survey Measures Need in
Pilot Countries
by John Ikeda
Cover: Colorful buildings
characterize Mexican
street scenes.
Photo by Maria del Carmen Moreno
6
Q&A
Patrick Jury
Iowa CU League
Russian Credit Unions Have
Lessons to Teach
by Mike Muckian
Credit Union World
The International Credit Union Magazine
World Council of Credit Unions
Executive Officers
PEOPLE
Pete Crear
President, Chief Executive Officer
5Everyday Hero
Kurt Lykins
Corporate One FCU
20
22International Partnerships
Building Cultural Bridges
Joint Efforts Between Costa
Rica and Alabama Benefit
Both Credit Union Groups
WOCCU Supporters
T hank You
Your Contributions Make
a Difference
26Behind the Scenes
Mentor.Visionary...
WOCCU Staff Member
Luis Jara
by Victor Miguel Corro
Board of Directors
Melvin Edwards
Chairman; Caribbean
Caribbean Confederation of Credit Unions (CCCU)
Barry Jolette
1st Vice Chairman; USA
Credit Union National Association (CUNA)
José Manuel Rabines
2nd Vice Chairman; Peru
National Federation of Credit Unions of Peru (FENACREP)
Grzegorz Bierecki
Treasurer; Poland
National Association of Cooperative Savings & Credit Unions
(NACSCU)
Catherine Roberts
Secretary; USA
Credit Union National Association (CUNA)
MEMBER PLATFORM
14Platform
Confluence of Leadership
World Credit Union
Conference Report
24Products and Services
New International
Learning Opportunities
Attract Enthusiastic
Participants
by Lindsay Seabrook
by Valerie Breunig
16Member Highlight
Proof of Concept
Australian Credit Unions and
CUNA Mutual Cultivate Market
for Cooperative Securities
by Mike Celichowski
14
Brian Branch
Executive Vice President, Chief Operating Officer
16
Mark Bailey
Director; Ireland
Irish League of Credit Unions (ILCU)
Daniel Burns
Director; Canada
Credit Union Central of Canada (CUCC)
Anne Cochran
Director; USA
Credit Union National Association (CUNA)
John Gilbert
Director; Australia
Cuscal Ltd.
Ron Hance
Director; USA
Credit Union National Association (CUNA)
Sylvester Kadzola
Director; Malawi
Malawi Union of Savings and Credit Cooperatives (MUSCCO)
Neil McDonald
Director; New Zealand
New Zealand Association of Credit Unions (NZACU)
Alcenor Pagnussatt
Director; Brazil
SICREDI Servicos (SICREDI)
Penny Reeves
Director; Canada
Credit Union Central of Canada (CUCC)
Executive Forum
A Glimpse of the Future
T
he sign of success in any enterprise is growth, and few things have been quite
as successful in the World Council’s history as our annual conference this past
summer in Calgary, Alberta. We may have closed the four-day event with a live
rodeo at Calgary’s Stampede Park, but the true stampede started months earlier as more than
2,500 participants from 62 countries began registering for what turned out to be our second
most highly attended and easily the most highly rated conference. There was energy, excitement
and a vibrancy you rarely experience during such events.
Pete Crear
Chief Executive Officer
The numbers tell the story, of course, as do the breadth of countries that sent representatives,
including first-time attendance by representatives from The People’s Republic of China. One of
the most moving sights I’ve seen in my 40-plus years in credit unions is the parade of member
flags that opens our events. To watch the colorful banners of 62 nations brought to the stage
vividly reminds us all how widespread the credit union influence has become, and how unique
its application must be to meet the financial needs of the millions of members we serve globally.
Those unique service needs have the potential to take on mammoth proportions with the
emergence of China into the free market. China has more than 25,000 rural credit cooperatives
that function similarly to credit unions, with more than 200 million members. China’s
involvement has the potential to more than double the size of the international credit union
movement overnight.
The return of China to the financial cooperative movement has the capability of rearranging
our entire playing field, bringing profound changes to the international credit union movement.
That mere realization may alter the way the World Council and many of you conduct business
from this day forward.
The World Council’s 2008 World Credit Union Conference is scheduled for next July in
Hong Kong, literally China’s doorstep with ready access to the profound impact its participation
in the free market will bring. Will you join us at next year’s conference to see firsthand the
future of the international credit union movement?
CANADA
RUSSIA
MEXICO
4 | CU WORLD
COSTA RICA
COLOMBIA
ECUADOR
KENYA
RWANDA
BOLIVIA
AUSTRALIA
National credit union systems featured in this issue of Credit Union World.
Everyday Hero
“My first trip to Bolivia sparked a
true interest in credit unions and
belief in the philosophy. Before
that, I hadn’t really thought about
credit unions as a philosophy.”
—K
urt Lykins, Corporate One FCU,
Columbus, Ohio
xxxxxx
x x x x xx x x x x x x x x
K
BILL MERRICK
xxx x x
urt Lykins isn’t your average IT guy. In addition to
being a master at financial technology management,
he looks at what people are doing, discusses their
hopes and needs, then helps them identify solutions so they
can achieve their goals.
about savings or loan rates. Instead, she told us how she
came to town once a week to sell her goods. Since there was
nothing really to buy in the small town, she deposited her
earnings in the credit union so that she wouldn’t have to
risk being robbed in the boat back to her small village.”
When Kurt joined Corporate One Federal Credit Union in
Columbus, Ohio, in 1993, he hadn’t thought much about
credit unions, or what differentiated them from other financial
institutions. Since then, not only has he been a critical driver
of Corporate One’s growth in the United States, but he’s also
led the development of a national shared branching network
among credit unions in Bolivia.
Kurt returned to Columbus determined. He rallied his
Corporate One colleagues and drove the Bolivia initiative
from consensus to installation in 10 months.
Volunteered by others to go to Bolivia, Kurt went for the
adventure. He walked off an overnight flight from Miami to
La Paz, climbed aboard a minivan and traveled down a road
known as one of the Western Hemisphere’s most dangerous.
Ten hours later, still reeling from the high altitude, he arrived
at his small hotel to find there was no water.
“In San Ignacious, we asked a woman standing in a credit
union line why she was there,” said Kurt, describing his
defining credit union moment. “I was expecting a response
Where to next? Kurt is keeping an eye on Bolivia, but he’s
also working to engage more U.S. credit unions and corporates
in international initiatives. “It took me 10 years,” he said.
“I want others to have those defining moments sooner.”
Kurt will be hosting the 2008 Corporate Operations
Forum in Mexico (a first), and continues to volunteer with
WOCCU throughout the world.
Not your average IT guy, not by a long shot. ■
Do you know an everyday hero? Let us know for a future
profile. Email: mmuckian@woccu.org.
CU WORLD | 5
Later that same week, Kurt rode a rickety five-seater plane
above Bolivia’s Amazon region to the small town of San
Ignacious, where he landed in a field to find a community
the rainy season had cut off from the rest of the country,
indeed from the rest of the world.
Today, Bolivia’s credit unions are connected via a national
network that offers nationwide points of service, accepts
international remittances and, most importantly, has one
central data location that will help provide more sophisticated
services in the future.
World View
Blossoming
Enterprise
Latin America’s
Largest Credit Union
Grows through Cooperation
6 | CU WORLD
By Jennifer Brink
Mexico
G
uadalupe Fuentes is one among more than a
million Caja Popular Mexicana (CPM) members
whose life wouldn’t be the same without a trusted
financial institution watching her back. Affordable loans
have enabled her to build her roadside business and finance
her family’s first home. Today, her entire family saves at
CPM, and she has nothing but praise for her credit union.
Fuentes’ experience is among many success stories in an
institution that has spent the past decade transforming
itself to better serve its members.
Twelve years ago, 62 credit unions, state federations and a
national federation merged to form CPM, now the largest
credit union in Latin America. The newly formed credit
union struggled with inefficiency and a debilitating lack
of cohesion among its branches. Today, thanks to the
dedication of CPM staff, support from its credit union
league partners in California and Texas and technical
assistance from a World Council of Credit Unions
(WOCCU) program funded by the United States Agency
for International Development (USAID), CPM has
increased assets nearly four-fold, slashed loan delinquency
rates to 5% from 19%, and is growing at a rate of 14,000
new members per month.
Cultivating Sustainable Growth
At the core of CPM’s transformation have been its
varied efforts to unify a fragmented network of branches.
The first step was to get everyone speaking the same
financial language.
CPM next turned its focus to creating a central platform
for communications, since the different branches were
operating various systems, software and hardware.
Imperative to the credit union’s success was the installation
of a standard information technology (IT) system.
CPM officials visited partner credit unions in California
and Texas, as well as Truliant Federal Credit Union in
CU WORLD | 7
In the past six years, Caja Popular Mexicana has grown by nearly
600,000 members and US$864 million in assets to become the largest
credit union in Latin America.
MARIA DEL CARMEN MORENO
WOCCU introduced its PEARLS financial performance
monitoring system to CPM at the start of the technical
assistance program in 2002. CPM implemented the software
at each of its 325 branch offices. The new reporting system
enabled credit union officials to assess each branch’s performance and make more informed strategic decisions.
200,000
Growth
000,000
Savings, Loans and Members
800,000
400,000
200,000
This all-women’s semilla cooperativa group in the mountains of
1200000
Coatepec, Mexico meets with its CPM field officer (far right) twice
a month at the restaurant above
to access loans as working capital
1000000
for their farms, restaurants and small businesses, and to deposit a
800000
minimum of US$10 per month as agreed upon by the group.
600000
Nuturing the Cooperative Seed
400000
200000
The semilla cooperativa [cooperative seed] approach to rural
outreach was developed by the 0WOCCU program in Veracruz
state, one of Mexico’s poorest regions. The Mexican Ministry
of Agriculture, Livestock, Rural Development, Fishing and Food
(SAGARPA) financed the program, and three CPM branches are
among the credit unions adopting the methodology.
The Philosophy
Access to loans in rural areas of Mexico is often accompanied by
interest rates of more than 100%. Credit unions offer much more
affordable loans, accompanied by a range of other financial
services. In a country where the relative cost and time of travel
can empty a person’s pocketbook, semilla cooperativa offers a
cost-effective and convenient way for credit unions to deliver
financial services to the underserved in remote rural areas.
How it Works
Credit union field officers travel to area villages up to 30 kilometers
(about 19 miles) from branch offices to introduce the credit
union’s full range of financial services to community leaders.
The credit union then introduces itself and the semilla cooperativa
group delivery methodology in a community meeting. Those
interested in joining the credit union form groups of 10-30
people that decide how often to meet, with the usual frequency
being one meeting per month. The group elects a president,
secretary and treasurer. The three leaders help the credit union
verify loan application information and collect payments and
savings deposits.
How it Differs
8 | CU WORLD
While non-governmental organizations and loan sharks offer
microcredit with rigid requirements and high interest rates,
semilla cooperativa provides sustainable financial services to
rural members through offering efficient and non-compulsory
financial education meetings, affordable rates and the security of
belonging to a regulated financial institution. One credit union
has even adapted the methodology to capture youth savings,
aptly naming it semillita cooperativa [little cooperative seed].
-Jennifer Brink
The U.S. Agency for International Development administers
the U.S. foreign assistance program, providing economic and
humanitarian assistance in more than 80 countries worldwide.
1,200
$1,000
$800
Savings
Loans
$600
$400
No. of members in thousands
JENNIFER BRINK
600,000
U.S. dollars in millions
$1,200
1,000
800
600
400
200
0
$200
2001
2002
2003
2004
Y E A R
2005
2006
2001 2002 2003 2004 2005 2006
Y E A R
North Carolina, to analyze IT system options. CPM then
formed a 45-person committee of staff members from
across the organization and undertook a rigorous process to
select the new IT platform.
With the ensuing buy-in from its branches and resulting
standardization, CPM is now operating as an integrated
financial institution. Since selecting the Fiserv IT system
and migrating to the new platform last year, CPM’s
branches have increasingly streamlined operations and,
subsequently, improved member services. Branches now
submit their data daily to CPM’s headquarters. The credit
union has plans to develop an ATM network and is fully
integrating its remittance distribution using the new system.
Delinquency Declines, Capital Levels Rise
Another challenge CPM faced following the merger was
that each branch manager used different criteria to analyze
credit applications and adhered to different rules on loan
collection. As a result, the credit union’s delinquency rate
had risen to a crippling 19% by 2002.
With all branches using PEARLS and a standard IT system,
CPM worked to streamline loan application assessment and
approval and to implement more stringent collection policies.
As a result, CPM has reduced the delinquency rate to 5%
and was able to bring its institutional capital to a healthier
level, paving the way for new product and service development and stable growth.
With its capital levels rising, a new IT platform and credit
standards in place, CPM began expanding its line of credit
offerings. One innovative product was a no-interest loan
allowing members to purchase each other’s goods or services,
such as furniture or dental work, on display or advertised
at the CPM branch. Entrepreneurial members selling the
goods or services pay the credit union a commission on
each loan in exchange for the lobby exposure. CPM also
began offering revolving lines of credit for members who
have established good credit history, such as eight-year
member Guadalupe Fuentes.
In 2003, CPM began offering remittance services to
members and non-members through WOCCU’s
International Remittance Network (IRnet®). Not only does
the service draw new members in, but remittances are now
considered part of member income in loan applications.
JENNIFER BRINK
JENNIFER BRINK
JENNIFER BRINK
(Left) Entrepreneurial CPM members pay the credit union a commission to display their goods or advertise their services
at the branches. Interested members can apply for interest-free loans to purchase the products and services. (Center)
Guadalupe Fuentes, a mother of four and an eight-year CPM member, bought land, built her first home and grew her
small business with help from CPM. (Right) CPM’s branding is unmistakable across Mexico.
The innovative recognition of remittances as steady income
has enabled members to make more productive use of the
money they receive from family members working abroad.
when a member applies for a first-time loan, the wait time is
approximately five days, a long time for someone in need
of immediate financing.
CPM centralized its national marketing strategy last year
to establish consistent branding. Headquarters staff now
oversees publicity and promotion initiatives and disburses
marketing materials to the now nearly 350 branches.
CPM is exploring ways to streamline credit approval
without losing the level of control and risk management it
has achieved. Currently, one individual in each branch sells
credit products, analyzes applications and collects loans.
CPM recognizes the potential conflict of interest and is
considering splitting the duties among three people. CPM
is also exploring the use of credit scoring, a new tool for
credit unions in Mexico.
Today, travelers can’t pass through many parts of Mexico
without seeing billboards beckoning them to CPM. The
credit union’s green stamp is unmistakable. Every branch,
every sign, every passbook, every employee and even the
CPM-sponsored soccer team, Club Deportivo León, carry
the same look.
While attracting new members, CPM has also strengthened
its capacity to respond to them. The credit union redesigned
its website, expanded branch hours to nights and weekends,
created a toll-free number and established a call center.
Convenient locations, accessibility, security and an incentive
program have also led to a very effective word-of-mouth
campaign among CPM members.
Amid solid growth, CPM streamlined the institution’s
decision-making while maintaining democratic input from
its constituents. Definitive tiers of leadership now represent
various branches and regions. Some communities hold
meetings prior to CPM’s annual general meeting, attracting up to 60% of the membership, especially in rural areas
where members have a strong commitment to their
credit union.
Looking Forward
So what’s next? The 3,500 people working at CPM have a
very clear idea of where they’re headed in the next five years.
They’re all focused on driving sustainable growth. The consistent vision is a great accomplishment in and of itself.
Faster Credit Delivery. Though its credit delivery system
has become more significantly more efficient, CPM
recognizes it still has room for improvement. Currently,
CPM is developing staff training and mentoring programs
and has adapted a performance evaluation tool provided
by WOCCU for obtaining and giving employee feedback.
The credit union is also instituting Gente CPM, a program
designed to create a positive working environment and foster
pride among staff.
Challenges Ahead
CPM has advanced far from where it was at the start of the
WOCCU program six years ago. CEO Ramón Imperial
Zúñiga recognizes that the overarching challenge now is
adapting to the new regulatory standards for credit unions
in Mexico and staying competitive in the financial services
sector while remaining accessible to people from all
walks of life.
CPM has transformed itself into a robust financial
institution, but maintaining equilibrium between regulatory
adherence and service to the poor may prove to be its
greatest challenge yet. Thanks to years of hard work and
dedication, CPM is equipped with talented visionaries
who now have the tools they need to carry the credit union
forward and continue serving more people like Guadalupe
Fuentes and her family. ■
Jennifer Brink is development communications officer for
WOCCU. Contact her at jbrink@woccu.org.
CU WORLD | 9
Electronic Payment Services. CPM is currently awaiting a
license that would authorize it to offer members electronic
payment services and long-term loans. This would make
CPM the first credit union in Mexico to offer such services
as online banking and credit cards.
Improved Human Resources Management. CPM understands that as the credit union grows, it must continue
to invest in its people. CPM expects to hire 1,500 more
employees by 2012 and is implementing a number of
initiatives to build skills sets and morale.
10 | CU WORLD
Fostering Global
Credit Union
Outside of the Box
S
erafín Ríos, a laborer from La Punta, a small town
near Bogotá, Colombia, describes himself as a poor
man. Ríos, 73, makes his living collecting and bundling scrub brush to sell as cattle feed. The deep, sun-etched
lines on his face speak to a lifetime of hardscrabble work.
Growth
On a good day, Ríos may earn US$3, enough to buy some
beans and oil so his wife can cook a simple dinner. More
likely, he’ll earn US$1 and may go days without bringing
home a single peso. For Ríos and more than a billion people
worldwide, life is constant struggle. Finding food and
shelter is never guaranteed, income fluctuates widely and
the simplest setback can have catastrophic consequences.
Gates FoundationFunded Survey
Measures Need
in Pilot Countries
Disaster nearly struck for Ríos when he became ill several
years ago and found himself in the hospital. His meager
savings were quickly depleted by hospital bills. Unsure of
where to turn, Ríos visited Cooptenjo credit union and
became a member at age 68. It was his first experience with
any financial institution. With a loan from the credit union,
Ríos repaid his hospital bills while continuing to save.
By John Ikeda
Now, five years later, Ríos has seen a marked improvement in his quality of life, something for which he credits
Cooptenjo in large part. He’s now thinking of applying for
a second loan to purchase a machine for baling feed, which
will save time and help him earn more money.
Almost half the world’s population of 6.6 billion people
live in the same grinding poverty as Serafín Ríos. From
Colombia’s rural communities to Kenya’s urban slums, one
of every two people on earth live on US$2 or less per day.
Many live on much, much less. Despite poverty’s
pervasive nature, there’s more cause for optimism now than
ever before. Several years of strong global economic growth
is helping lift millions out of poverty, while researchers are
learning what types of foreign aid have the greatest impact
in addressing poverty.
Growing Beyond US$2 Per Day
WOCCU is working with 25 credit unions in Colombia,
Kenya and Rwanda to pilot this program. By the end of
2009, WOCCU will have doubled the membership of
these institutions, helping recruit more than 690,000 new
members, many of them just like Serafín Ríos, scraping by
on less than US$2 per day.
CU WORLD | 11
Eli Maina Mbogo, 97, is one of the oldest members of Kenya’s
Muramati Tea Growers SACCO, one of the credit unions participating in
the WOCCU program funded by the Bill & Melinda Gates Foundation.
Mbogo, who has been planting tea since 1959, now employs 60
workers and farms 80 acres.
JOHN IKEDA
For more than 150 years, credit unions have provided
affordable financial services to millions around the globe,
including many from the ranks of the very poor. Now,
with funding from the Bill & Melinda Gates Foundation,
the World Council of Credit Unions (WOCCU) is developing an entirely new way of helping the world population’s poorest members. Through its Credit Union Growth
Program, WOCCU is developing a step-by-step plan for
credit unions in the developing world to increase growth,
attract new members and serve the very poor.
PANAMA
VENEZUELA
Involvement by the Gates Foundation brings a strong
focus on creating measurable impact for each dollar
invested. As part of its commitment, WOCCU is
conducting annual surveys of members at each partner
credit union. The 2007 survey involved more than 60
staff working over a two-month period to interview
nearly 6,500 credit union members. Survey results
contributed to a detailed member profile, providing
information on member income, assets, net worth,
employment, education, member satisfaction and
financial services use.
Colombia
Bogota
COLOMBIA
BRAZIL
PERU
Groundbreaking, Heartbreaking Results
Pilot credit union members, in many cases, are new to
the financial sector. Compared to industrialized countries, where the market for retail financial services is
typically heavily saturated, many developing countries
see as few as 10% to 20% of the adult population
with bank accounts. Results from the 2007 survey
indicate that, like Ríos’ experience with Cooptenjo
in Colombia, one out of every two members in the
program are completely new to the financial sector.
Over the next two years, WOCCU’s Credit Union
Growth Program will work to further increase this
involvement, bringing safe savings and affordable
credit to people previously excluded from the
formal economy.
12 | CU WORLD
In 2008 and 2009, WOCCU will repeat these surveys,
with results used both to benchmark the progress made
in reaching the program goals and identify and refine
specific program aspects with the greatest impact.
Around the world, credit unions are making a difference in the lives of the 2.5 billion people surviving
on US$2 a day. Through the Credit Union Growth
Program, WOCCU is working to ensure that even
Serafín Ríos is among 15% of Cooptenjo credit union’s membership living on
less than US$2 per day. He joined the credit union just five years ago to pay
hospital bills.
JOHN IKEDA
Members surveyed often have multiple and highly
variable income sources that change frequently. Across
the three countries, about 70% of all households have
someone in the family who earns a salary. Most of
these members are employed by small businesses or
the government. However, many of these households
supplement their low salaries with microenterprises,
small businesses or farming. Among pilot credit
unions, one in three households surveyed owns a
small business, while a quarter of them farm or
have livestock.
JOHN IKEDA
The results of the first year’s surveys have been
groundbreaking. Across all three countries, 24 percent
of all credit union members – nearly 167,000 people
– live in desperate poverty. Additionally, half of all
members in the 25 pilot credit unions live below the
poverty lines of their respective countries.
Jose Baldion, a bamboo furniture maker and father of four, has been a
Congente credit union member for six years. He makes up to two pieces of
furniture a day and sells them at an average of US$20 each.
more of the world’s poorest become credit union
members. From rural laborers in Colombia to small
business owners in Kenya, credit union membership
means a better life for the half of the world living in
poverty. That’s something that will help members like
Serafín Ríos not only survive, but thrive. ■
For more information, please visit www.woccu.org.
Kenya
SUE STREVELER
JOHN IKEDA
Nearly 90% of Rwanda’s population lives on less than US$2 per day. WOCCU’s
Credit Union Growth Program seeks to provide these people the opportunity to climb out of poverty through access to affordable financial services.
Tea farmer Milka Gathona, a member of Muramati Tea Growers SACCO,
used to carry 10 kilograms of tea on her back for 30 kilometers to the
nearest processing station. She is a widow living on less than US$1 per day.
SUE STREVELER
JOHN IKEDA
Rwanda
Banki Y’Abaturage is one of the 13 Union des Banques Populaires du Rwanda
(UBPR) affiliated credit unions working with WOCCU’s Gates Foundationfunded program in Rwanda.
CU WORLD | 13
World Council of Credit Unions (WOCCU) is developing the Credit
Union Growth Program in partnership with credit unions in Colombia,
Kenya and Rwanda, with funding from the Bill & Melinda Gates
Foundation. During the three-year program, WOCCU is working with
participating credit unions to double their membership and expand outreach to very poor members. Based on the Credit Union Growth Program
experience, WOCCU will develop a comprehensive toolkit to enable credit
unions worldwide to reach more and poorer members while maintaining
prudential standards.
Kenyan construction workers mix concrete for a building project made
possible by a credit union loan.
PLATFORM
Confluence
of Leadership
By Lindsay Seabrook
For four days this
summer, more
than 2,500 participants from 62 countries
transformed Calgary, Alberta into the
center of the international credit union
movement. The year’s largest global credit union
14 | CU WORLD
BILL MARSH PHOTOGRAPHY
gathering yielded impressive results.
1
2
3
4
5
1) Outgoing WOCCU chair Gary Plank (right) congratulates incoming chair Melvin Edwards. 2) WOCCU president/CEO Pete Crear
addresses the crowd. 3) WOCCU board members are sworn in. 4) WYCUP members doff their white hats. 5) Speaker Stephen Lewis
inspires. 6) Attendees listen attentively. 7) The parade of flags dazzles. 8) WOCCU’s Afghanistan team greets attendees via video
uplink. 9) Rodeo festivities close the conference. 10) North American native dancers entertain.
Proud bearers waved the colorful
national flags of 62 countries during the opening ceremonies of the
2007 World Credit Union Conference
in Calgary, Alberta. Traditional Native North
American dancers and Canadian Mounties added to
the on-stage festivities. With more than 2,500 attendees,
the World Council of Credit Unions’ (WOCCU) 2007
conference was the largest and most diverse meeting of credit
union representatives in a decade. The conference, which
took place July 29-Aug. 1, was co-hosted by Credit Union
Central of Canada (CUCC). The international event
connected participants on new levels, highlighting the
social aspect of credit unions more than in years past.
Prior to the conference’s start, 47 credit union regulators from 15 countries attended WOCCU’s 5th Annual
Regulators’ Roundtable for a two-day session. Regulators of
both mature and developing credit union systems exchanged
experiences and focused on best practices for supporting
strong credit unions at the national level. WOCCU’s Young
Credit Union People (WYCUP) program participants under
the age of 35 hosted a networking session and enjoyed a
special ceremony of their own. All were deemed honorary
Calgarians as they received the official White Hats
of Calgary.
During the Annual General Meeting, WOCCU’s delegates elected a new chairman and swore in a new board
of directors. Melvin Edwards, representing the Caribbean
Confederation of Credit Unions, is the first WOCCU
chairman from the Caribbean.
The first day’s general session showed participants the
power of the credit union movement and the effect it’s
6
having worldwide. Through a live video feed, the audience
met WOCCU and local credit union staff in Afghanistan.
The team explained how they establish credit unions while
teaching new members about democracy, yet still complying
with Islamic lending principles.
The crowd remained silent as keynote speaker Stephen
Lewis explained his work as former U.N. Special Envoy for
HIV/AIDS in Africa. The former Canadian politician spoke
honestly and passionately about the AIDS pandemic and the
important role credit unions play in mitigating its impact.
“What World Council has the capacity to do is to intervene
in this world where others haven’t,” Lewis told the general
session audience. “You have a network which transcends all
networks of the world.”
In the final day’s Awards Ceremony, WOCCU honored
two Distinguished Service Award (DSA) recipients. L.R.
(Bobby) McVeigh, CUCC board member and former
WOCCU board member/chairman, and the Foundation for
Polish Credit Unions were awarded WOCCU’s highest honor
for their contributions to the global credit union movement.
Five WYCUP winners, who received fully paid trips to the
next World Credit Union Conference in Hong Kong in July
2008, were also recognized.
In true Calgary fashion, the conference came to a close with
a live rodeo at Stampede Park. Attendees enjoyed watching
bull riding and kicked up their heels for dinner and dancing,
an exciting end to an equally exciting event. ■
Lindsay Seabrook is marketing and communications specialist
for WOCCU. Contact her at lseabrook@woccu.org.
To register for the next conference, visit www.woccu.org/hongkong.
8
9
10
CU WORLD | 15
JENNIFER BRINK
JENNIFER BRINK
7
MEMBER HIGHLIGHT
Proof of C
16 | CU WORLD
Australian Credit Unions and CUNA Mutual
Concept
Cultivate Market for Cooperative Securities
By Mike Celichowski
O
ne of the loudest arguments credit unions mount
when defending attempts at demutualization is that,
as member-owned financial cooperatives, they’re
unable to raise sufficient capital to expand services in the face
of fierce competition. Thanks to the efforts of 21 Australian
credit unions, aided by financial support and technical expertise
from CUNA Mutual Group, that myth has been exploded, at
least when the right technical and regulatory conditions have
been met.
What began as a novel concept proved conclusively that a capital
market exists for Tier 1 and Tier 2 securities offered by not-forprofit cooperatives, and a healthy market at that. The ability
of a combined group of forward-thinking institutions to raise
A$100 million (at the time US$75 million) was proof of concept
that capital investors would be willing to purchase credit union
securities under arrangements designed in a manner that protects
mutuality and membership interests.
The sale of securities was also critical in a country whose credit
union movement growth potential had been hobbled since its
institutions became fully taxed in the 1990s. Tax demands put
a strain on capital growth which, in turn, affected the credit
unions’ continued abilities to serve members. Executives Mark
Genovese, CEO of Maritime Workers of Australia Credit Union,
and Dave Taylor, manager director of FI Consulting Services,
had been considering options to address the situation, which
threatened the future of some Australian credit unions. The pair
then visited the 2004 CUNA Mutual Discovery Conference in
San Diego, where they heard a presentation on raising alternative
capital for low-income credit unions in the U.S. That experience
set the wheels in motion and helped establish the team that ultimately produced a successful offering.
Lack of Precedent
CU WORLD | 17
One of the biggest hurdles was a real lack of precedent among
credit unions anywhere in raising secondary capital. With no
playbook to follow, we found it challenging to determine proper
processes and subsequent steps. Working with CUNA Mutual’s
International Division, a team of combined Australian and
U.S. executives aided by Greg Hammond, a partner with the
Australian law firm of Mallesons Stephan Jaques, began developing plans to facilitate the process. Feasibility studies, conducted
throughout 2005, provided more definitive direction.
Some of the most important steps took place within the
credit unions themselves. The 21 participants were required
to change the constitution, or bylaws, of their institutions
to allow the sale of securities. This required a member vote,
with care taken not to compromise the members’ ownership
status. Credit union board approval also was required.
The institutions also needed support from local regulators,
support eventually granted by the Australian Prudential
Regulation Authority (APRA) which allowed participating
credit unions to include securities as part of their regulatory capital. Banking giant ABN AMRO was brought in to
help manage and facilitate sale of the securities to institutional investors.
Finding a market for those securities proved to be the biggest
challenge, but only in the time it took to get market players
comfortable viewing credit unions as securities issuers. Once
securities were issued, however, that market quickly warmed
to the idea and the goal was met by the time the offering
closed in June 2006. The response was so strong, in fact,
that ABN AMRO, with cooperation from CUNA Mutual, is
currently spearheading another offering designed to raise as
much as A$125 million in the sale of credit union securities.
From an economic perspective, the securities sale helped
bolster the financial strength of credit unions wishing to
move into new service areas. More importantly, perhaps,
the success of the sale removed a primary excuse offered by
Australian credit unions seeking to demutualize as a means
to support continued growth. Market noise around demutualizations has quieted a great deal since the successful issuance was completed.
The securities offering was truly an economic as well as a
philosophical victory for Australian credit unions.
Australia
NORTHERN
TERRITORY
QUEENSLAND
WESTERN
AUSTRALIA
SOUTH AUSTRALIA
18 | CU WORLD
NEW SOUTH
WALES
VICTORIA
Lessons Learned
• Check local regulations. Before spending time or money
developing a project, first consider whether your local
regulatory structure allows credit unions to issue capital
securities. In the United States, issuance of similar securities would be limited to a small subset of credit unions.
Without a regulatory basis to proceed, other efforts would
be moot.
• Be patient. Even with precedents set by a successful offering
in Australia, the concept of credit unions or any cooperative organization issuing securities into the market is
novel. It’s vitally important to recognize that successful
offerings at appropriate rates from cooperatives will take
more time than those from traditional listed entities. Start
any processes well before capital is required; it will take
longer to raise the money than you may expect.
• Allocate the proper resources. Such projects require
dedication and focus for those who spend the bulk of
their time pulling the pieces together. Our project proved
that investment banking experience was not a prerequisite,
but having a team of business-savvy, creative individuals
with a strong commitment to project success is an
absolute necessity.
• Expect roadblocks. Even with intense preparation, there
inevitably will be complications that arise and threaten to
sink any offering. When these occur, don’t lose sight of
the ultimate goal nor the faith that success is attainable.
When people realize the depth of your team’s dedication
to making the project successful, you’ll be surprised how
helpful they can be.
• Utilize the experts. The best decision we made during the
project was to engage Mallesons Stephen Jaques as our
legal advisors for the offering. The entire Mallesons team
brought indispensable experience and detailed process
knowledge to the table. The rest of the project team had
the chance to learn as we went, thanks to the guiding
hand of Mallesons to help us navigate the legal landscape.
Spend the money necessary to bring in the best legal
advice possible, and many other matters will take care of
themselves. ■
Mike Celichowski is a director within CUNA Mutual Group’s
International Division and was a key facilitator of the
Australian offering.
Russia
Q&A
NORWAY
SWEDEN
Q&A
with Patrick Jury
Russian Credit Unions
Have Lessons to Teach
KAZAKHSTAN
MONGOLIA
UZBEKISTAN
CHINA
By Mike Muckian
In September, Patrick Jury, CEO of the Iowa Credit Union League, spoke at
WOCCU’s Eastern European Technical Congress in Moscow. It was the second visit
to Russia for Jury, whose league serves 150 Iowa credit unions. Along with other
participants, Jury met with members of the Russian Credit Union League to address
diverse issues facing Russia’s credit unions.
Credit Union World: What surprised you most during this visit to Russia?
Patrick Jury
Patrick Jury: Russian credit unions are very sophisticated from the standpoint
of technology, but that technology is often decentralized. Many of the larger
institutions have their own data processing systems, leaving smaller ones to
work with what is often homegrown software. That software sometimes
isn’t compatible with other accounting systems, particularly those of
the regulators. That makes effective oversight challenging.
CUW: Are there issues with credit union oversight, given that
Russia was formerly part of a totalitarian regime?
PJ: The government is trying to figure out how to regulate its credit
unions. Many of the institutions are very small and Russia is geographically very large. Is it worth sending an examiner 6,000 miles
to examine a $2 million credit union? Some regulators would like
to see more involvement by the trade associations in facilitating
oversight, but [as trade associations] we never think that’s a good idea.
Credit union advocacy is a challenge facing Russian credit unions.
They wanted to know how to effectively solicit the government
to make positive changes on behalf of the institutions, and we
spoke at length about the lobbying and representational tools we
use. However, when Russian regulators spoke to the Congress,
local participants weren’t afraid to pepper them with questions. It was a perfect example of grassroots lobbying.
CUW: What are the key challenges Russian credit
unions face?
PJ: What’s surprising is how similar the challenges are
between Russian and U.S. credit unions. In Russia,
credit unions are concerned about marketing and
branding, how to recruit effective board members, and
how to take advantage of technology. In Russia, there
are also questions about how to transition from volunteer leadership to professional management. Russian
credit unions are a lot like U.S. credit unions were in
the early days of the movement.
CUW: What can we learn from the Russians?
–Mike Muckian is communications manager for WOCCU.
He can be reached at mmuckian@woccu.org.
CU WORLD | 19
PJ: At everyone’s top of mind [in Russia] is how they
can improve the lives of their members. That’s the
reason all credit unions exist and it’s good for us here
to remember that obligation.
T h a n k Yo u , W O C C U
World Council of Credit Unions (WOCCU) would like to thank the many individuals, credit unions and credit union organizations
that have chosen to become Supporters. Your generosity empowers people to help themselves through credit unions in
some of the world’s most difficult places. Together, we’re providing the working poor with the tools they need to grow.
BRONZE INDIVIDUALS
Carroll & Ruth Beach - USA
Grzegorz Bierecki - Poland
Kathy & Russell Chartier - USA
David & Rebecca Chatfield - USA
Dennis & Shelby Cutter - USA
Scott Earl - USA
John & Deborah Gilbert - Australia
Barry & Carole Jolette - USA
Dwayne Naylor - USA
Jamie Raile - USA
Cliff Rosenthal & Elayne Archer - USA
CRYSTAL INDIVIDUALS
Thomas & Isabella Connors - USA
Pete Crear - USA
Pauline & William Dunbar-Berens - USA
Janet Gibb - New Zealand
Ron & Marsha Hance - USA
Ann Mabis - USA
Richard Miller - USA
Sue Sabatke - USA
Charles Sim - UK of Great Britain & Northern Ireland
Caryn Vesperman - USA
DIAMOND
Mountain America Federal Credit Union - West Jordan, UT, USA
PLATINUM
CUNA Mutual Group Foundation - Madison, WI, USA
Credit Union Foundation Australia - Sydney, Australia
State Employees Credit Union - Raleigh, NC, USA
U.S. Central Credit Union - Lenexa, KS, USA
20 | CU WORLD
GOLD
African American Credit Union Coalition - Shreveport, LA, USA
America First Credit Union - Ogden, UT, USA
American Association of Credit Union Leagues - Washington, DC, USA
Arizona Credit Union System - Phoenix, AZ, USA
Bishopstown Credit Union Ltd. - Bishopstown, Cork, Ireland
Caja Libertad SCL, Cooperativa de Ahorro y Préstamo - Corregidora, Querétaro, Mexico
California & Nevada Credit Union Leagues - Rancho Cucamonga, CA, USA
Community Savings - Red Deer, Alberta, Canada
Credit Union Central of British Columbia - Vancouver, BC, Canada
Credit Union Executives Society - Madison, WI, USA
Credit Union Foundation of British Columbia - Vancouver, BC, Canada
Credit Union Foundation of Colorado & Wyoming - Arvada, CO, USA
Iowa Credit Union League - Des Moines, IA, USA
Kinecta Federal Credit Union - Manhattan Beach, CA, USA
Louisiana Credit Union League - Harahan, LA, USA
Massachusetts Credit Union League, Inc. - Marlborough, MA, USA
Members United Corporate Federal Credit Union - Warrenville, IL, USA
Minnesota Credit Union Network, Inc. - St. Paul, MN, USA
New York State Credit Union League, Inc. & Affiliates - Albany, NY, USA
Ohio Credit Union System - Dublin, OH, USA
Orange County Teachers Federal Credit Union - Santa Ana, CA, USA
Pacific Service Credit Union - Walnut Creek, CA, USA
Pennsylvania Credit Union Association - Harrisburg, PA, USA
Texas Credit Union League & Affiliates - Dallas, TX, USA
WesCorp - San Dimas, CA, USA
Wisconsin Credit Union League & Affiliates - Pewaukee, WI, USA
SILVER
AEA Federal Credit Union - Yuma, AZ, USA
Alabama Credit Union League - Birmingham, AL, USA
American Heritage Federal Credit Union - Philadelphia, PA, USA
Andrews Federal Credit Union - Suitland, MD, USA
BECU - Seattle, WA, USA
CO-OP Financial Services - Rancho Cucamonga, CA, USA
Caja Morelia Valladolid S.C. de R.L. de C.V - Morelia, Michoacán, Mexico
California Credit Union - Glendale, CA, USA
Coast Central Credit Union - Eureka, CA, USA
Credit Union Central Alberta Limited - Calgary, AB, Canada
Credit Union Service Corporation - Duluth, GA, USA
Dundrum Credit Union Ltd. - Dundrum, Co Dublin, Ireland
Envision Financial - Langley, BC, Canada
First Tech Credit Union - Beaverton, OR, USA
Greater Nevada Credit Union - Carson City, NV, USA
Idaho Credit Union League & Affiliates - Boise, ID, USA
Kern Schools Federal Credit Union - Bakersfield, CA, USA
Motorola Employees Credit Union - Schaumburg, IL, USA
Municipal Employees Credit Union of Baltimore, Inc. - Baltimore, MD, USA
National Association of Co-operative Savings & Credit Unions - Sopot, Poland
North Island Credit Union - San Diego, CA, USA
Northwest Corporate Federal Credit Union - Portland, OR, USA
Northwest Federal Credit Union Foundation - Herndon, VA, USA
Provident Credit Union - Redwood Shores, CA, USA
RTE Credit Union, Ltd. - Donnybrook, Co. Dublin, Ireland
Redwood Credit Union - Santa Rosa, CA, USA
SGE Credit Union Limited - Sydney, Australia
San Mateo Credit Union - Redwood City, CA, USA
Servus Credit Union - St. Albert, AB, Canada
Silver State Schools Credit Union - Las Vegas, NV, USA
Southeastern Regional Credit Union Schools, Inc. - Lynchburg, VA, USA
State Employees Federal Credit Union - Albany, NY, USA
Suncoast Schools Federal Credit Union - Tampa, FL, USA
Texas Credit Union Foundation - Dallas, TX, USA
United Nations Federal Credit Union - Long Island City, NY, USA
Woodslee Credit Union - Essex, ON, Canada
mecu Ltd. - Kew, Australia
Orange County’s Credit Union - Santa Ana, CA, USA
Washington Credit Union League & Affiliates - Federal Way, WA, USA
BRONZE
66 Federal Credit Union - Bartlesville, OK, USA
Agriculture Federal Credit Union - Washington, DC, USA
Arizona Central Credit Union - Phoenix, AZ, USA
Arizona Federal - Phoenix, AZ, USA
Arrowhead Central Credit Union - San Bernardino, CA, USA
Association of Ethiopian Microfinance Institutions - Addis Ababa, Ethiopia
Atlantic Regional Federal Credit Union - Brunswick, ME, USA
Bahamas Co-operative League Limited - Nassau, Bahamas
Ballinasloe Credit Union - Ballinasloe, Co. Galway, Ireland
Baxter Credit Union - Vernon, IL, USA
Bay Ridge Federal Credit Union - Brooklyn, NY, USA
Bayer Federal Credit Union - Elkhart, IN, USA
BMI Federal Credit Union - Columbus, OH, USA
California Bear Credit Union - Los Angeles, CA, USA
CFC Bank Ltd. - Nairobi, Kenya
Chetco Federal Credit Union - Harbour, OR, USA
Chinook Credit Union, Ltd. - Brooks, AB, Canada
Christian Community Credit Union - Covina, CA, USA
Clackamas Community Federal Credit Union - Oregon City, OR, USA
Coca-Cola Company Family Federal Credit Union - Atlanta, GA, USA
COCEDAE - Rio di Janeiro, Brazil
Comharr Linn INTO Credit Union - Dublin, Ireland
Community Alliance Credit Union - Wollongong, Australia
Community Choice Credit Union - Warren, MI, USA
Community One Federal Credit Union - Las Vagas, NV, USA
Co-op Services Credit Union - Livonia, MI, USA
Cooperativa de Ahorro y Crédito ABACO - Lima, Peru
COPOS Credit Union Co-operative Society Limited - Port of Spain, Trinidad and Tobago
CPM Federal Credit Union - Charleston, SC, USA
Credit Union Association of New Mexico - Albuquerque, NM, USA
Credit Union Australia - Sydney, Australia
Supporters
Pentagon Federal Credit Union - Alexandria, VA, USA
Plus4 Credit Union - Houston, TX, USA
Point Loma Credit Union - San Diego, CA, USA
Postal Credit Union - Woodbury, MN, USA
Power Financial Credit Union - Pembroke Pines, FL, USA
Queensland Teachers’ Credit Union - Brisbane, Australia
Redstone Federal Credit Union - Huntsville, AL, USA
Rush Credit Union - Rush, Co. Dublin, Ireland
Savings & Loans Credit Union - Adelaide, Australia
Seattle Metropolitan Credit Union - Seattle, WA, USA
Selfreliance Ukrainian American Federal Credit Union - Chicago, IL, USA
Service 1st Federal Credit Union - Danville, PA, USA
Service One Credit Union - Bowling Green, KY, USA
South Division Credit Union - Evergreen Park, IL, USA
Spectrum Federal Credit Union - San Francisco, CA, USA
St. Agnes Credit Union Ltd. - Dublin, Ireland
St. Anthonys and Claddagh Credit Union, Ltd. - Galway, Ireland
Stima SACCO - Nairobi, Kenya
The Credit Union of Alabama FCU - Tuscaloosa, AL, USA
The Tennessee Credit Union - Nashville, TN, USA
Thurles Credit Union, Ltd. - Thurles, Co. Tipperary, Ireland
Tooele Federal Credit Union - Tooele, UT, USA
Transportation Federal Credit Union - Washington, DC, USA
Travis Credit Union - Vacaville, CA, USA
Tricorp Federal Credit Union - Portland, ME, USA
Tropical Financial Credit Union - Pembroke Pines, FL, USA
Truliant Federal Credit Union - Winston-Salem, NC, USA
TruWest Credit Union - Scottsdale, AZ, USA
Tullamore Credit Union - Tullamore, Co. Offaly, Ireland
Ukrainian Federal Credit Union - Rochester, NY, USA
US Federal Credit Union - Burnsville, MN, USA
Utilities Federal Credit Union - Omaha, NE, USA
Vantage Credit Union - Bridgeton, MO, USA
Veridian Credit Union - Waterloo, IA, USA
Verity Federal Credit Union - Seattle, WA, USA
Visions Federal Credit Union - Endicott, NY, USA
Washington Credit Union Foundation - Federal Way, WA, USA
Water & Power Community Credit Union - Los Angeles, CA, USA
WECU - Bellingham, WA, USA
Xerox Federal Credit Union - El Segundo, CA, USA
International Development Fund (IDF) Investors
Arizona State Credit Union - Phoenix, AZ, USA
Cincinnati Central Credit Union - Cincinnati, OH, USA
Community Choice Credit Union - Warren, MI, USA
Cucorp - Plymouth, MI, USA
Department of Labor Federal Credit Union - Merrifield, VA, USA
Desert Schools Federal Credit Union - Phoenix, AZ, USA
First Credit Union - Chandler, AZ, USA
floridacentral Credit Union - Tampa, FL, USA
Greater Nevada Credit Union - Carson City, NV, USA
Heritage Family Federal Credit Union - Rutland, VT, USA
Michigan Catholic Credit Union - Troy, MI, USA
Motorola Employees Credit Union -Schaumburg, IL, USA
Oakland County Credit Union - Waterford, MI, USA
San Mateo Credit Union - Redwood City, CA, USA
Snohomish County PUD Credit Union - Everett, WA, USA
TruWest Credit Union - Scottsdale, AZ, USA
USA Federal Credit Union - San Diego, CA, USA
Vermont Federal Credit Union - Burlington, VT, USA
Washington Credit Union Foundation - Federal Way, WA, USA
Worcester Credit Union - Worcester, MA, USA
Join us! Visit: www.woccu.org or contact:
Valerie Breunig
World Council of Credit Unions; 5710 Mineral Point Road; Madison, WI 53705 USA
Telephone: (608) 395-2055; E-mail: vbreunig@woccu.org
As part of becoming a WOCCU Supporter, you will receive our current Supporters Report on
CD-ROM to show the many accomplishments which are a direct result of your contributions!
List current as of October 8, 2007. Please contact us with any updates.
CU WORLD | 21
Credit Union Central of Nova Scotia - Halifax, NS, Canada
Credit Union Foundation of MD & DC - Columbia, MD, USA
Credit Union League of Connecticut, Inc. - Wallingford, CT, USA
Credit Union Waikato - Hamilton, Waikato, New Zealand
Cucorp - Plymouth, MI, USA
Deer Valley Credit Union - Phoenix, AZ, USA
Dubco Credit Union, Ltd. - Dublin, Ireland
Dutch Point Credit Union - Wethersfield, CT, USA
Fairfax County Federal Credit Union - Fairfax, VA, USA
Fairwinds Credit Union - Orlando, FL, USA
Farmers Insurance Group Federal Credit Union - Los Angeles, CA, USA
Federación Nacional de Cooperativas de Ahorro y Crédito de Guatemala,
RL - Ciudad de Guatemala, Guatemala
Financial Service Centers Co-operative, Inc. - San Dimas, CA, USA
Fintech Kenya Limited - Nairobi, Kenya
First Community Credit Union - Chesterfield, MO, USA
First Entertainment Credit Union - Hollywood, CA, USA
First Source Federal Credit Union - New Hartford, NY, USA
First South Credit Union - Bartlett, TN, USA
FirstLight Federal Credit Union - El Paso, TX, USA
floridacentral Credit Union - Tampa, FL, USA
Florida Commerce Credit Union - Tallahassee, FL, USA
Florida Credit Union League - Tallahassee, FL, USA
GECU - El Paso, TX, USA
Georgia Credit Union Affiliates - Duluth, GA, USA
Great Wisconsin Credit Union - Madison, WI, USA
Greater Vancouver Community Credit Union - Burnaby, BC, Canada
GTE Federal Credit Union - Tampa, FL, USA
HarborOne Credit Union - Brockton, MA, USA
Heritage Credit Union - Madison, WI, USA
Heritage Family Federal Credit Union - Rutland, VT, USA
IBM Southeast EFCU - Boca Raton, FL, USA
IWS - Deerfield Beach, FL, USA
Jeep Country FCU - Holland, OH, USA
Jefferson Parish School Board Employees Credit Union - Harahan, LA, USA
Keesler Federal Credit Union - Biloxi, MS, USA
Killarney Credit Union, Ltd. - Killarney, Co. Kerry, Ireland
Kula Community Federal Credit Union - Kahului, HI, USA
Library of Congress Federal Credit Union - Hyattsville, MD, USA
Lucan District Credit Union Ltd. - Dublin, Ireland
Maine Credit Union League - Portland, ME, USA
Maritime Workers Credit Union Ltd. - Sydney, Australia
Maryland & DC Credit Union Association - Columbia, MD, USA
Matanuska Valley Federal Credit Union - Palmer, AK, USA
Melrose Credit Union - Briarwood, NY, USA
Metropolitan Credit Union - Chelsea, MA, USA
Michigan Catholic Credit Union - Troy, MI, USA
Michigan Credit Union League - Plymouth, MI, USA
Mid-Atlantic Corporate Federal Credit Union - Middletown, PA, USA
Mission Federal Credit Union - San Diego, CA, USA
Missouri Credit Union Association - St. Louis, MO, USA
Mitchell & District Credit Union Limited - Mitchell, ON, Canada
Mitchell, Stankovic & Associates - Boulder City, NV, USA
Montana Credit Union Network - Helena, MT, USA
Mullingar Credit Union Ltd. - Mullingar, Co. Westmeath, Ireland
Municipal Credit Union - New York, NY, USA
Mwalimu Co-operative Savings & Credit Society Ltd. - Nairobi, Kenya
National Association of State Credit Union Supervisors - Arlington, VA, USA
Navy Federal Credit Union - Merrifield, VA, USA
New Jersey Credit Union League - Highstown, NJ, USA
New Mexico Educators Federal Credit Union - Albuquerque, NM, USA
Newbridge Credit Union, Ltd. - Newbridge, Co. Kildare, Ireland
NSW Teachers Credit Union - Silverwater, Australia
Numerica Credit Union - Spokane, WA, USA
OAS Staff Federal Credit Union - Washington, DC, USA
OnPoint Community Credit Union - Portland, OR, USA
Ontario Credit Union Charitable Foundation - Oakville, ON, Canada
Oregon Credit Union Foundation - Beaverton, OR, USA
PaulJLucas.com - Fairfax, VA, USA
PBC Credit Union - West Palm Beach, FL, USA
Pennsylvania Credit Union Foundation - Harrisburg, PA, USA
WOCCU SUPPORTERS
INTERNATIONAL PARTNERSHIPS
Building
Cultural Bridges
Joint Efforts between Costa Rica and
Alabama Benefit the Members
By Victor Miguel Corro
22 | CU WORLD
Costa Rica
M
anuel Bolaños, CEO of the Federation of Cooperatives of Costa Rica (FEDEAC), has seen a shift in
the attitude of Costa Rican credit unions to one of greater cohesiveness. In addition to the strengthening of FEDEAC itself, increased competition and growth within the Costa Rican credit union
movement, Bolaños believes he also has the International Partnership with the Alabama Credit Union League
and World Council of Credit Unions (WOCCU) to thank for that change.
“We only used to meet when we had problems, big issues,” said Bolaños. “It’s refreshing to now sit with my
CEOs and talk about things that we can do together to improve the movement and better serve the financial
needs of Costa Ricans. Our credit union movement is much stronger now given the atmosphere of cooperation
that has set in.”
According to Bolaños, the interaction with Alabama credit unions has caused his institutions to think differently, a
change the FEDEAC executive credits in part to Gary Wolter, CEO of the Alabama League. “[Wolter] repeats
over and over that members are the heart of the credit union and everything we do must benefit them,” said
Bolaños. “Though common sense, there was a time when this was not as apparent in Costa Rica. We have
taken heed of his words.”
As part of the two-year relationship between the movements, WOCCU recommended the formation of
credit union-to-credit union (CU2CU) partnership agreements as a way to extend the benefits to more credit
union staff and encourage greater depth in the technical exchanges. Today, the five CU2CU partnerships among
Alabama and Costa Rica credit unions focus on operational issues that will enable them to deliver better service
to members. From teller compensation and membership growth strategies to governance and risk management,
these 10 credit unions are sharing information that will enable them to become stronger institutions.
The international partnership also brings satisfaction of a very personal nature to those involved, according to
Wolter. “The partnership provides an opportunity to experience once again the people-to-people aspect of our
industry,” Wolter said. “It’s important for credit union people in Alabama to experience working with another
culture. It broadens their perspectives and the credit union philosophy comes alive.” ■
VICTOR MIGUEL CORRO
VICTOR MIGUEL CORRO
Victor Miguel Corro is International Partnerships manager for WOCCU. He can be reached at vcorro@woccu.org.
Manuel Bolaños, CEO of FEDEAC (left), and Gary Wolter, CEO of
the Alabama Credit Union League, celebrate the formalization of
the relationship between the two groups.
CU WORLD | 23
Representatives from Coopeservidores, Costa Rica, and Family Security
Credit Union, Decatur, Ala., sign a cooperative agreement to recognize
their international partnership.
Ellen Gardner, SECU director from
Maryland (left), meets Marsia Murillo, a
potter and credit union member
in Ecuador.
WOCCU Ecuador Cooperative Learning Tour participants
visited the Paute Women’s Association to see how the
organization works with the local credit union to grow
its members’ businesses. The Association is a founding
member of CJA credit union.
Mark your 2008 Calendar
Cooperative Learning Tours
to Cuenca, Ecuador
April 6-13, 2008 & October 12-19, 2008
Hispanic Marketing Immersion Program
in Mexico’s heartland
September 21 – October 1, 2008
24 | CU WORLD
Visit www.woccu.org
for more information
VALERIE BREUNIG
VALERIE BREUNIG
VALERIE BREUNIG
Products and Services
Michelle Stapp, Monarch Consulting Group, and Steve Stapp,
Redwood Credit Union, shared school supplies with rural children during the second Cooperative Learning Tour in Ecuador.
Participants in the Hispanic Marketing Immersion Program pose
outside the Spanish language school. After language and
marketing classes, the group went to afternoon credit union
internship assignments.
VICTOR MIGUEL CORRO
JOSHUA FETTING
VICTOR MIGUEL CORRO
Kathy Chartier, Linda Webb-Manon and Letty CordonHernandez learn how Mexican credit unions market to their
members and how U.S. credit unions can tap those same
strategies at WOCCU’s recent Hispanic Marketing
Immersion Program.
Kathy Chartier, Members Credit Union
(right), meets her host family. The
Hispanic Marketing Immersion Program
included several nights of a home stay
so participants could learn Mexican
culture first hand.
New International Learning Opportunities
Attract Enthusiastic Participants By Valerie Breunig
O
pen for the first time to anyone with an interest in learning about credit union development in emerging countries,
World Council of Credit Unions (WOCCU) offered two field learning opportunities this year: the Cooperative
Learning Tour and the Hispanic Marketing Immersion Program. The Learning Tours educate participants on
developing credit union systems, and the Immersion Program teaches credit union staff how to reach Hispanic markets.
Two Cooperative Learning Tours were conducted in June and October in Ecuador, with eleven credit union people
participating in each of the six-day sessions. Participants came from six countries and studied Ecuador’s system, the WOCCU
program underway there and Jardin Azuayo, a unique credit union combining high technology with a social mission to serve
the underserved.
The Hispanic Marketing Immersion Program gave 18 U.S. credit union staff members a chance to participate in the life of Mexican credit union operations, better preparing them to attract and serve the
growing Hispanic immigrant population in the U.S. The program offered participants oneor two-week options that included an internship in a credit union, customized Spanish
instruction at a language school and a stay with a local host family.
Plan to take advantage of next year’s field learning opportunities and join
us either in Ecuador or Mexico in 2008. The time spent will help you
better understand WOCCU’s development role while providing
you with valuable exposure to different cultures and
credit union systems. ■
Valerie Breunig is executive director of WOCCU’s
Worldwide Foundation. She can be reached at
vbreunig@woccu.org.
CU WORLD | 25
VICTOR MIGUEL CORRO
Behind the Scenes
Mentor. Visionary. Advocate. Karaoke Virtuoso.
L
uis Jara is many things to many people. To Latin
America’s credit unions, he’s a tireless ally in the quest
for sustainable growth and serving the underserved.
And his close friends say his karaoke puts Mexican singing
legend Vicente Fernández to shame.
“Helping the poor.
Improving their
standard of living
is the reason we do
what we do.”
–Luis Jara
Luis joined the credit union movement in his home country
of Ecuador after 15 years as a branch manager, chief credit
officer and compensation officer in the banking industry.
Highly successful, he was ready to experience a new kind of
organization and assumed credit unions weren’t too much
of a stretch from banks. Fourteen years later, as a seasoned
credit union veteran, Luis concedes there really is a “credit
union difference.”
“A credit union’s work is beautiful because every day you have
the opportunity to explore new things,” he explained. “Reaching
out to the underserved is a great reward because it fulfills both a
professional and a social aspiration.”
Luis began his credit union career in 1993 with the World
Council of Credit Union’s (WOCCU) technical assistance
program in Ecuador. He has since helped credit unions across
Latin America. His most recent work as project director
for the rural credit union outreach program in Veracruz,
Mexico, was Luis’ first venture into rural development.
The youngest in a family of nine, Luis comes from humble
beginnings. He was just 11 years old when his father passed
away, and he recalls his mother and siblings taking up
various jobs to put food on the table and to get them
through school.
“I identify very much with rural people,” he said, explaining
his approach to rural credit union development. “I try to
think as they do, to recognize their needs, hopes and dreams
in order to earn their trust.”
Members of Luis’ nine-member team describe him as a very
simple man in the field. His outgoing nature and ability
to walk in the shoes of others draw people to him. In Luis,
people find an advocate they can trust.
Luis’ eyes light up when recounting his favorite stories from
the field: small children making savings deposits in their
semillita cooperativa groups (see Nuturing the Cooperative
Seed, p. 8) in the mountains of Veracruz; women growing
their livestock and small businesses because they could access
affordable financial services; and credit unions in the north
rebuilding communities affected by hurricanes.
The Veracruz project helped six credit unions open 23 rural
branches in less than two years, and Luis is quick to turn
the spotlight on his team. “WOCCU is an organization that
doesn’t limit creativity,” he explained. “The staff, WOCCU’s
vision and the skills we’ve all developed have led to the
program’s success.”
Without hesitation, Luis conveys his proudest achievement:
“Helping the poor. Improving their standard of living is the
reason we do what we do.” ■
OSCAR ROJAS
26 | CU WORLD
Luis speaks at the opening of a rural San Andres Coyutla credit union branch
established with assistance from the WOCCCU program funded by SAGARPA
in Veracruz.
Global Viewpoint
When
Cooperation
LEE BUTTKE
Makes
Business Sense
Brian Branch
Executive Vice President & COO
C
redit unions across the world face daunting competition. Some credit unions languish while others
thrive in this competitive environment. What are
the cross-country common factors that we find in those
who thrive?
Two factors of success are basic and consistent everywhere:
financial discipline and quality service. When a credit union
performs with financial discipline, it takes a commanding
presence in the marketplace. The maturity of financial
discipline generates the public confidence that a credit
union needs to grow.
These two factors are necessary, however they are not
sufficient. A credit union standing alone may be strong in
its financial discipline and competitive with its product
offering. But it will remain as one community institution,
limited in size and geographic scope, when compared to the
growing national financial institutions.
So what comes next? What we observe in many countries
—developed and developing—demonstrates the power of
cooperation in today’s competitive world. This is part of
what makes credit unions unique.
While other institutions may have the advantages of rapid
capital mobilization or deep pockets for research and
development, credit unions have the greater advantage of
being able to combine their resources and unite in their
objectives to achieve more as a group than they can as
individual institutions.
Faced with aggressive competition for markets over which
they once had sole domain, credit unions band together to
These networks allow credit unions to compete not solely as
individual institutions, but as a financial system. Electronic
transfers and shared branching allow credit unions to offer
hundreds of points of service throughout a country. A member
of one credit union in Bolivia can now travel from the country’s highlands to the Amazon rain forest, walk into another
credit union that is part of the network and make deposits,
transfers, loan payments and savings withdrawals.
The provision of transaction services, such as bill payment
and remittance delivery, through business networks in
countries like Mexico and Kenya has enabled credit unions
to achieve some of the deepest outreach to the poor. The
provision of transaction services through credit unions has
allowed the poor to build savings in financial institutions for
the first time in their lives and then, as they qualify, to access
loans for the first time.
The formation of business networks also enables credit
unions in countries such as Colombia and Ecuador to offer
the convenient electronic transfers, card services and mobile
banking that middle income members look for in their
financial institutions.
Cooperation in the form of business networks requires vision
and leadership. It requires a level of trust that is achieved
only when all participating credit unions meet the same
rigor of financial disciplines, governance ethics and policy
consistency. It also requires solid information systems, communication infrastructure and security systems.
Business networks offer participating credit unions a competitive edge in a fiercely competitive marketplace. This is
business. This is networking. This is the power of cooperation among credit unions. ■
Safe travels,
CU WORLD | 27
Credit unions have long pooled their liquidity for interlending or reinvestment, and they have often negotiated as
groups to gain leverage with vendors. The successful capital
issue by a group of 21 credit unions in Australia broke new
ground in the cooperation of credit unions to mobilize
resources. This achievement allowed credit unions, for the
first time, to access the capital markets so that they could
continue to grow and meet regulatory requirements.
form integrated business networks that enable them to offer
higher quality services to more members.
Discover the Wonders
of Hong Kong
It's closer than you think.
Join us at the
2008 World Credit Union Conference
July 13-16, 2008
Co-Hosted by
In Cooperation with
Register at www.woccu.org/HongKong08
World Council of Credit Unions
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