Advocating for Credit Unions Means Working With All Stakeholders to Advance the Cooperative Mission

In a Nutshell: Member-owned credit unions operate on a not-for-profit cooperative model to offer broader access to financial services than for-profit banking institutions. Since 1934, the Virginia Credit Union League has represented credit unions in Virginia by championing the inclusiveness of the cooperative model. The Virginia Credit Union League provides networking, training, and professional development, promotes industry best practices, and advocates for Virginia credit unions at the federal and local levels. The League helps Virginia credit unions thrive.

Millions of Virginians benefit from the credit union industry’s cooperative model. While for-profit banks ultimately exist to earn a return for shareholders, Virginia’s member-owned credit unions return profits to the people in the form of more competitive products and services and a commitment to caring that extends to all community members.

About 100 credit unions in Virginia range from small rural institutions to some of the largest in the nation. Collectively, they manage tens of billions while bringing better rates to members, broadening access to financial services, and reaching out statewide and beyond with a message of education and inclusiveness.

Not surprisingly, Virginia’s credit unions have a cooperative organization of their own, a trade association, the Virginia Credit Union League. Since 1934, the League has advanced the interests of Virginia’s credit union industry through advocacy, compliance, support, education, and connection.

Chief Advocacy Officer J.T. Blau spoke with us about the Virginia Credit Union League’s focus on industry advocacy and dedication to nurturing all stakeholder relationships with long-term objectives in mind. He said that as financial cooperatives operating according to internationally recognized principles, Virginia’s credit unions reach their highest potential by working together through the League.

“Connecting one credit union with a problem with another that has faced a similar challenge helps everybody thrive together,” Blau said. “We view our role as one of advocacy, support, and being that connecting point.”

That includes helping Virginia’s credit unions achieve their individual goals as community-based financial institutions. Invariably, those goals reach beyond the consumers and businesses providing most of the resources in the form of deposits to the community at large. The Virginia Credit Union League is always ready with knowledge and support to help its members meet all of their challenges without compromising any of their goals.

“We make sure our members have the best market and policy environment possible,” Blau said. “Anything we can do to provide support for one credit union ultimately helps the entire state.”

The year 1934 is arguably the most important in the American credit union industry because it marked the point when the federal government got behind the credit union movement.

It was the time of the Great Depression. Americans had endured more than three years of struggle by the time Franklin Delano Roosevelt assumed the presidency in March 1933. Prices and productivity collapsed, unemployment rose to as high as 25%, and thousands of businesses and farms failed.

Banks collapsed along with the industrial and agricultural sectors. More than 9,000 — amazingly, almost half of the industry — failed by the time of Roosevelt’s inauguration.

Virginia experienced a microcosm of those events. As the state’s farm economy was thrown into a tailspin, dozens of resource-strapped small community banks failed, too.

Meanwhile, America’s credit union industry was small before the Great Depression, hampered by uneven state regulation. In Virginia, a relatively small number of credit unions, compared to other states, served mainly as mutual aid societies catering to the state’s rural communities.

But times changed as thousands of banks failed. Many consumers turned to the not-for-profit credit union model because it offered opportunities failing for-profit banks could not provide. After millions lost their life savings and credit access froze due to bank failures, Roosevelt declared a national bank holiday two days after taking office.

Then, Congress got to work. One of many turning points in what the Roosevelt administration termed the New Deal came when the president signed the Federal Credit Union Act in 1934 to allow the federal chartering of credit unions. In Virginia, that was what it took to start the Virginia Credit Union League.

“Traditional providers locked many out of getting credit, so groups started to come together and form solutions for providing credit and promoting thrift,” Blau said. “That mission has remained to this day.”

In Virginia, Blau said, the cooperative mission is evident in the way some credit unions seem to coexist when market realities suggest they should be competitors. 

“There’s so much connection and collaboration between credit unions, even in the same area, that they’ll help solve each other’s problems,” he said.

Scheduled to begin full-fledged operation in 2025, America’s Credit Unions formed from a merger of two previous trade associations to serve as the chief national advocacy group for the credit union movement. It works with the Virginia Credit Union League and dozens of state and regional associations to address the credit union industry’s multifaceted advocacy mission.

For Blau and the Virginia Credit Union League, advocacy that works hand in hand to achieve America’s Credit Unions’ overarching goals is a matter of drawing on generations of experience. The League’s advocacy mission hinges on knowing the people behind the issues, supporting all stakeholders enthusiastically, and working incrementally at all levels to achieve positive outcomes. It’s a common-sense though deceptively complex strategy.

“On the state level, we have a part-time legislature, but work continues all year because it’s all about maintaining those relationships,” Blau said. “We don’t make a lot of asks, but when we do, we want them to know who we are so we’re then able to explain how this bill or this vote is going to help.”

The Virginia Credit Union League’s office is in Richmond, a block or so away from the State Capitol. Part of relationship building is liaising between members and their constituents to resolve specific issues on an individual member level.

Members use the Virginia Credit Union League’s event space to hold community events and fundraisers, making the League office an all-around space near where the action is. Blau said he’s seen individuals start local and work their way through the hierarchy to become influential policy brokers. Relationships the Virginia Credit Union League builds continue to grow and move up to the federal level.

The approach yields successes such as a recent victory that gave bank and credit union customers the option to add a trusted contact to their accounts — an authorized person with no financial stake who can act as a proxy for an elderly or potentially infirm account holder.

“It’s another tool in the toolbox,” Blau said. “Some people think of advocacy as passing or killing bills, but it’s really about building relationships, so when the time comes, we don’t have to start with introductions.”

The Virginia Credit Union League performs many functional duties associated with credit union success. For example, as the COVID-19 pandemic taught financial providers that the era of the physical branch was waning once and for all, the Virginia Credit Union League partnerships offered tried-and-true technology solutions to help credit unions without a lot of resources compete with larger institutions.

“Making partnerships a little easier is something we do a lot of here at the league,” Blau said. “We have some good solutions in place for our members.”

For all intents and purposes, the Virginia Credit Union League also serves as a compliance consultant for member credit unions. With a recent cybersecurity incident involving a prominent community bank demonstrating the vulnerability of financial institutions, the League helps member credit unions access the latest information, tools, and technology to help their members stay safe.

The challenge is balancing security and convenience, Blau said.

“If it takes people 15 minutes to get logged in and authenticated, then it’s not going to work,” he said. “What our credit unions are doing is finding the right technology to reduce friction while providing good, secure solutions.”

Part of the battle is over hearts and minds, and education is the best weapon to achieve victory. To that end, the Virginia Credit Union League is also a tireless advocate of financial education. It equips credit unions with tools and partnerships to meet their members where they are with the information they need to make good decisions on the fly.

As more states require financial education in public schools, Blau said Virginia has long been at the forefront of the movement. The Virginia Credit Union League supports credit union efforts to go into schools, workplaces, and public meeting places with in-person financial education and online with the best digital tools available.

The Virginia Credit Union League makes digital professional development opportunities available to member institutions when possible. Meeting credit unions where they are helps them meet members on terms that yield the maximum payoff in large and small Virginia communities.

“We provide a wide range of opportunities, in a variety of mediums, to foster excellence in Virginia credit unions,” Blau said. “We’re here to do the best job we can for our members.”