Cooperatively Speaking

December 10, 2012 · By Kelvin Smith

Hello, and welcome to my new blog!

My name is Kelvin Smith; I’m the chairman of the volunteer Board of Directors of Arizona Federal Credit Union. If you’re a member of Arizona Federal, you’re probably used to hearing from our president/CEO, Ron Westad, or reading materials prepared by other staff. I’m starting this blog to talk about our credit union, financial cooperatives in general and the latest developments in personal finance from a slightly different perspective: that of a member, one of Us.

If you’re like some of the people who utilize the credit union’s services, you might think of Arizona Federal as just another bank, a business from which you can purchase financial products and services. Well, I am living proof that we’re something very different.

Arizona Federal is a not-for-profit financial cooperative, owned by its members – the people who utilize its services. As our marketing people have put it, we’re simply a group of people who have joined together to pursue our common goal of being in control of our personal finances. Our business model is quite different from that of traditional financial services providers in every way. And that difference starts with the part I’m involved in: governance.

Arizona Federal is governed by a volunteer Board of Directors, each elected by the entire membership on a one member, one vote basis. There are currently seven directors, with tenures ranging from 14 to 32 years. We have varied backgrounds, ranging from public safety and finance to private industry, but we all have one very important thing in common: we’re all members of Arizona Federal Credit Union and utilize the credit union’s services for our day-to-day financial needs.

Unlike the directors of most financial institutions, my colleagues and I serve without compensation. None of us is what you’d consider a “high roller,” and we don’t have a greater financial stake in the credit union’s success than any other member.

Now, I’m not telling you this so you’ll be impressed with my altruism. I do have a stake in the credit union’s success, so I consider it a privilege to be able to play an active role in helping to determine its strategic direction. I’m a member, an owner of the cooperative, and it’s in my best interest for the cooperative to succeed.

So, when my fellow directors and I make decisions – on behalf of all of Us – we’re not only considering how those decisions impact the bottom line of the cooperative. We’re also thinking about how those decisions will impact each of Us as members. Our goal, as stated in our mission statement, is to produce “mutually beneficial results.” When the credit union does well, the members should do well – and vice versa. It’s a delicate balance, but one we always strive to achieve.

But let’s be honest: some decisions we’ve made recently haven’t set well with some members. There are many who have been with Arizona Federal for years who feel betrayed by the fact that we’re going to be collecting monthly dues – even though for most it only represents an increase in actual cost of $12.60 per year because we’re no longer collecting the $1.95 security fee previously connected to our checking accounts, and even though we’ve announced a $3 million PLUs payout coming at the end of the year. To some, it just seems wrong.

Well, here’s my promise, to those folks and to all of Us: working with staff and management, my fellow directors and I will do all we can to ensure that the added benefit to participating members resulting from the rest of the changes we’ve made over the last several months far outweighs the cost of dues or any other contribution we’re asked to make. We’re confident that will be the case, and we wouldn’t have chosen to go this direction if we weren’t.

There’s a lot more to say, and a lot more we all can learn about what it means to be part of a cooperative, and what benefits that can bring. I look forward to exploring those topics and more in future blogs, and I invite you to chime in. Send your comments or questions via email by clicking here; we’ll respond to all individually, and I’ll try to address some of your questions here when possible.

Thanks in advance for joining the discussion, and making our cooperative strong. That’s what I call “the power of Us!”

Tags: Cooperatively Speaking