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From the Field 2010


Sue Sabatke, WOCCU

December 2010

Pollok Credit Union in Glasgow, Scotland,
is partnered with a local post office and
offers childcare services for busy parents
out of its highly visible branch in the
Silverburn Mall.

GLASGOW, Scotland — Credit union visits are always a favorite for attendees at WOCCU's annual World Credit Union Conference. In preparation for the 2011 Conference in Glasgow, Scotland, I had the opportunity to visit three area credit unions that are considering hosting conference attendees on July 26.

I was struck by the incredible uniqueness of the Pollok Credit Union headquartered in the Silverburn Shopping Mall on the south side of Glasgow. Its highly visible storefront is shared with the local post office branch, and the credit union manager is also the local postmaster. The credit union staff performs postal transactions, and the post office staff is learning to do credit union transactions. The credit union also offers a safe and affordable day care center for children of parents who at work in the mall or surrounding areas and is in the process of installing its first automatic teller machine (ATM). With about 300,000 shoppers visiting Silverburn Mall every week, Pollok Credit Union is one of the most visible and accessible credit unions in Great Britain.

Next on the rounds was The Transport Credit Union. First founded as a Scottish closed-bond credit union, it began offering services to employees of several other public transport providers throughout Great Britain a few years ago. Since most members are employed and also have bank accounts, the credit union focuses more on savings and loan services, including a free mortgage brokering service for members. A substantial number of Polish speakers work in Scotland's transport industry, so the credit union has a Polish-language website and marketing materials and a Polish speaker on staff. This is one of the largest and most successful credit unions in Scotland, with over 80% of Glasgow subway staff among its membership.

Glasgow Credit Union was the last stop on the tour. It is the largest credit union in Great Britain with more than 25,000 members and £73 million (US$114 million) in assets. Originally serving employees of Glasgow City Council, the largest local authority in Scotland, the credit union now serves anyone who lives or works in the city of Glasgow and its suburbs. The credit union carries out the majority of member communications and transactions over the phone or online.

After these visits, it is clear to me that credit unions in Glasgow are striving to meet their members' needs through innovative solutions. To learn more, plan to attend the 2011 World Credit Union Conference and participate in the credit union visits on July 26.

Steve Schaefer, WOCCU

October 2010

Steve Schafer with ATM
Steve Schaefer with
one of the new ATMs
at Santa María
Magdalena Credit Union.

AYACUCHO, Peru — I admired the towering Andes Mountains as I stepped off the plane at the airport in Ayacucho, Peru, a city perched at a whopping 9,007 feet above sea level. This south-central Peruvian city is home to Santa María Magdalena Credit Union, one of the very first in the country to offer credit union-owned ATM services to its members. The purpose of my visit was to review and assess the progress made by the recent WOCCU program that enabled this Peruvian credit union to launch its ATMs.

As I made my way to the credit union over dirt roads and through bustling streets crowded with people, I reflected on all the planning that had been put into this project, from shipping ATM machines from the United States to determining just how we would provide the credit union with data connectivity. I smiled in thinking about all the challenges we had overcome to make this new and vital service viable.

When I arrived at the credit union I watched members approach the ATM and perform their transactions. I felt compelled to stop one woman and ask her what she thought about the new service her credit union was providing. She paused, and then said to me, "It feels wonderful to be part of the credit union where I know I belong. This just goes to show you don't have to be rich to use an ATM."

Her words stopped me, and they helped me realize how enabling this technology was much more than just added convenience. It brought dignity to these amazing, humble people.

My conversation with the Peruvian woman changed my way of thinking about what I do. It also reminded me why I am so proud to be a part of WOCCU. We truly do improve people's lives through credit unions.

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David Grace, WOCCU

August 2010


FRANKFURT, Germany — After more than a decade with WOCCU I've been to my fair share of unusual meetings. I especially remember the ones in countries where power outages are so common that you're expected to continue the discussion in complete darkness. But the meeting I attended June 1 at the guest house of the Bundesbank (German Central Bank) in Frankfurt will stick with me as one of the most enlightening ones.

In early May, WOCCU received a letter from Nout Wellink, governor of the Dutch Central Bank and chair of the Basel Committee on Banking Supervision, requesting our presence at a meeting on June 1 in Frankfurt. There was no agenda and no list of participants, just a request that we attend. On the day that WOCCU President & CEO Pete Crear and I left for the meeting, we learned that it would be comprised of the world's 20 top banking regulators, with representation from the United States, the United Kingdom, Japan, Brazil, Canada and other countries. In addition, we would sit with 15 CEOs from some of the world's largest banks, including Lloyds TSB, BNP Paribas, Barclays, BBVA, Citibank N.A. and Bank of America, as well as the CEO of the World Savings Banks Institute. The meeting's purpose would be to iron out the global capital and liquidity reforms that bank regulators will recommend to the G-20 heads of state to help prevent another global financial melt down.

We arrived at the Bundesbank in our taxi among the line of private cars. As we entered the guest house we recognized Basel Committee staff that we've worked with over the years on reforms. Just before the meeting started the big bank CEOs came through the doors together led by Deutsche Bank's square-jawed CEO, who welcomed the attendees as a politician might greet constituents at a rally.

We took our assigned seats at the corner of the hollow square table along with representatives of the savings banks. Without any introductions, the Basel Committee chairman explained that with more than 4,000 pages of comment letters on their proposal to reform global capital and liquidity standards, he had been briefed on their content but has not read a single page. We would now be charged to make our case.

Over the course of the next five hours we debated non-stop the impact of the proposals. The bankers argued that the proposal would result in 10 million fewer jobs and a 2.5% - 4% reduction in global GDP. Regulators, on the other hand, agreed sacrifices made now would be a natural consequence of rebalancing the excesses that had led to the crisis.

At one point several bankers began arguing for the elimination of any favorable treatment of smaller institutions in the standards. They defined "small" as an institution with less that US$25 billion in assets, a level that would make every credit union in world but one "small". We had secured in the draft standards special recognition of member shares in financial cooperatives as tier one capital, the best and safest class of core capital, and we weren't going to let this go by the wayside. When I mentioned I was representing credit unions, the necks of the bankers around the table craned out of curiosity to see what a credit union person looked like. They were apparently dismayed that one of us now had a seat at what they thought was their table.

June 1 will stay with me as the day big banks had to momentarily sit in darkness and listen to another voice in the room. But it was time to shed a new light on the value of credit unions and how differently they operated during the crisis.

Jennifer Bernhardt, WOCCU
June 2010

"I came here to serve those in need because I want to give my heart to those who are hopeless and give them hope for the future," Lucy Ruithanga, board chair of SOS SACCO, explained, "so that those with broken hearts will be healed."

NAIROBI, Kenya — A credit union without a building or staff? I couldn't fathom how deposits would be made, loans applied for and money kept safe. But here we were, on our way to visit an orphanage just outside of Nairobi, Kenya, that had "housed" an employer-based credit union for 25 years.

SOS Children's Villages International established its first Kenya orphanage in Nairobi in 1973 and has since opened four other orphanages throughout the country. Each orphanage has a number of houses within a compound run by "mothers" who care for up to 10 abandoned or orphaned children up to age 18. In 1985, about 100 mothers and other employees formed their own Nairobi-based savings and credit cooperative (SACCO), or credit union. Today, 265 current and former SOS Kenya employees are members of the volunteer-run SACCO.

SACCO board chair Lucy Ruithanga has dedicated herself to the children at SOS for the past 15 years and is mother to 10 orphans between the ages of 3-15. Each month, she says SACCO members from all five SOS locations submit individual forms indicating how they would like their paychecks allocated across their accounts. Being single and having devoted up to 20 years caring for orphans, many of the mothers have loans for investing in rental property or constructing homes to earn extra income and prepare for retirement in their home villages.

It struck me that so many women like Lucy would give up the prime of their lives to care for strangers. But they didn't see each other as strangers - they were clearly family that lived, did chores and played together. Along those lines, it made sense that the SOS employees would form a financial cooperative to "work together to develop ourselves," as Lucy told us.

At SOS SACCO, the volunteer board approves loans, the treasurer brings the manual accounting to an outside bookkeeper every month or two, member money is deposited or withdrawn from a central bank account and members receive quarterly statements. The group is currently working with WOCCU's Kenya program, funded by the Bill & Melinda Gates Foundation, to improve their efficiency and membership growth through new technology solutions. Equipped with more real-time information in the coming year, I expect the board to have a whole new set of goals to develop their membership even further.

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Mike Muckain, WOCCU
April 2010

KOTELAM rubble
The quake's tremors caused the KOTELAM branch's building to collapse, killing two employees and reducing the once-busy branch to rubble.

PORT-AU-PRINCE, Haiti — Local residents almost seem oblivious to massive destruction caused by the Jan. 12 earthquake that all but leveled parts of Haiti's capital city. They hurriedly stride past the wreckage that was once the Magloire Amboise branch of KOTELAM caisse populaire, Port-au-Prince's largest credit union. The crumbled concrete and a scatter of deposit forms are all that remain of KOTELAM's largest branch. All other credit union trappings — as well as the bodies of the two employees killed when the branch collapsed on them — have been removed or obliterated, making it hard to believe the corner lot piled high with rubble was ever a financial institution.

"Before the earthquake KOTELAM was strong," said Jean Hubert Lindor, KOTELAM's board chair. "But hundreds of members died in the quake. Borrowers lost their jobs, their businesses, their homes and have left for other parts of the country. Our credit portfolio deteriorates with each member's death."

I stare at the wreckage as Lindor continues. Employees who have lost their homes stay with family members or sleep in cars, he explains. Many suffer from psychological trauma caused by the quake and the loss of loved ones. "But the credit union is important to them, so they keep coming to work," he adds.

I reflect on his last statement. In a world where personal suffering and human needs far outweigh any professional obligations, KOTELAM's staff members report to work each day. Even with severely limited capital and an imperiled liquidity position, the credit union does what it can to help its surviving members. And the employees do their part daily to administer that assistance.

It's been said that little miracles often emerge in the wake of great disasters. The commitment of KOTELAM and its staff to their members may not be miraculous in the traditional sense, but the willingness of struggling credit unions to offer vital services in the face of overwhelming odds may be miracle enough to begin Haiti's healing process.

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Jeff Hardin, North Carolina Credit Union League

February 2010

Fokkus CAR Manager Ildiko Croitoru (right)
says that members trust the CAR to honor
its commitments. She credits that trust with
helping the CAR grow dramatically over
the years.

TARGU SECUIESC, Romania—The concept of trust is central to a vibrant financial system. Just how valuable that trust can be came to light during my recent trip with World Council of Credit Unions (WOCCU) to Romania, a country which has had a painful journey from Communist rule to a free-market economy. Borrowers and lenders alike must make and fulfill their commitments to one another. Other factors might drive demand, but trust is the engine that powers the system.

Jobs for many in Romania are hard to come by. The Romanian government is not widely trusted by its people to solve their problems. Banks charge unnecessary fees or sometimes even change the terms of loans to their customers after contracts have been signed.

Amid this desert of distrust, a WOCCU-affiliated credit union movement is flowering. Romania's 17 Casa de Ajutor Reciprocs (Mutual Help Houses, or CARs) have been steadily growing despite the global recession.

CARs are not regulated by the government, and as such are not able to offer a wide range of financial products. Due to the lack of regulation, they also are not well-known, or may be perceived by some as being more risky than banks. But honesty and dedication to service has helped CARs thrive despite these perceptions. Each CAR is well organized and presents a professional feel.

Of the many CARs I visited, Fokkus is a real success story. Fokkus is the only financial institution serving the village of Targu Secuiesc and has grown dramatically.

When I asked Manager Ildiko Croitoru why Fokkus had been so successful in attracting and retaining members, she didn't hesitate in her answer: "They know us to be honest and know that we will keep our word."

In a society struggling to reform its economy, Croitoru's words are a vivid reminder that trust is the foundation of meaningful change. With trust, CARs here are helping to build that foundation.

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