Gene's Note: Purpose

As I look around our community, I see businesses dedicated to making our communities great places to live in. They provide employment and through local ownership, they reinvest the profits of their businesses in Southern Oregon. I also see businesses that simply look to profit off of our community without any reinvestment in the communities they serve. Rogue’s purpose has always been to bring people together to serve their financial needs and help make our community a better place to live.

I firmly believe in a purpose driven mission no matter what the enterprise is, and as I write this message I am drawn back to the original purpose of credit unions as defined in the Federal Credit Union Act as a…

“cooperative association organized… for the purpose of promoting thrift among its members and creating a source of credit for provident or productive purposes.”

The fulfillment of this purpose is a lofty, but worthy objective that we are able to accomplish by profiting “for” our members, NOT profiting “off” of our members. To fully understand our purpose, it is appropriate to define the three key elements of a credit union’s purpose as defined in Federal law.

Cooperative Association -  A cooperative association is normally defined as a business organization formed by a group of individuals for their mutual benefit. In other words, it is where individuals join and work as a group for the benefit of all. Cooperatives are driven by a set of 7 Cooperative Principles including “Concern for Community” as the 7th principle. Cooperatives can trace their roots back to the 1880’s in Europe and credit unions received Federal recognition with the approval of the Federal Credit Union Act in 1934. The purpose of the law was to make credit available and promote thrift through a national system of “non” or “not-for” profit, cooperative credit unions. The not-for-profit status of credit unions has been a hallmark of ensuring local financial services are available without the fear of investor profit motives driving business decisions that are not in the best interest of the membership.

Promoting Thrift – Credit unions were founded on the common interests of occupational groups and expanded to serve the needs of community groups as the need for economic diversity became necessary to ensure the long-term viability of credit unions. So, those with extra cash that wanted to earn a fair return on their deposits, but also wanted to help out the teacher down the hall. A credit union provided a vehicle where savers and borrowers could be connected for the benefit of both. Through this effort to provide a reliable source of funds, credit unions and the fact that many early credit unions were formed by educators teaching individuals the value of saving and spending wisely (promoting thrift) became a driving purpose for credit unions.   

Source of Credit – In many ways, it can be said that credit unions were the original “peer to peer” lenders. Early credit unions were able to put tenured teachers that had built a nest egg together with newer teachers that needed a new set of tires for their car. The tenured teacher got a fair return on their savings and the new teacher got the hand up they needed as they were starting out. This original model still is the foundation of our credit union today.

While the services we provide have expanded over the years, the foundation of what makes YOUR credit union so important to our community continues to ensure a fair and safe exchange between those that have and those that need. Yes, we offer many of the services that a local bank does, but our entire purpose and organizational structure is so different that to think of your local not-for-profit cooperative as a bank is missing the foundation of the purpose that was memorialized in federal law back in 1934.

There is so much more to being a member of your credit union than a checking account or a loan. Being a member of YOUR credit union is about being a part of something bigger, it’s something that benefits you and those in our community. The purpose of YOUR credit union is to facilitate the cooperation of community members throughout Southern Oregon to promote thrift and create a source of credit and I am proud of how our community has joined together to make a difference for all of us!