NEW YORK—Despite continued challenges facing U.S. credit unions, financial cooperatives worldwide have a "good story to tell" in terms of stability, member service and their capability to spread financial risk, according to Pete Crear, World Council of Credit Unions (WOCCU) president and CEO. Crear last week took the credit unions' positive message to a United Nations 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 of experts 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, comprised primarily of academics and cooperative association executives from the United States and other countries, each submitted reports prior to the meeting outlining the role of cooperatives in their own countries. To view WOCCU's report to the U.N. work group in its entirety, go to www.woccu.org/memberserv/advocacy/positionpapers.
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 the best of 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 came forward in support of 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' successful role in economic, social and cultural development. The International Year of Cooperatives would expand that recognition to better draw attention to major global issues and the role cooperatives can play in addressing them, according to Crear.
"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 expert group 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 urges the strengthening of cooperatives worldwide and the development of increased public awareness of their overall socio-economic impact.
World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 57,000 credit unions in 103 countries serve 208 million people. Learn more about World Council's impact around the world at www.woccu.org.