The following is an article reprinted with permission from the Summer 2007 edition of The WWR Letter:
How the Credit Union Movement Has Changed Over the Last 45 Years
By: Bob Weltman, Esquire, Senior Partner of WWR
My history with the credit union movement started back in 1962. I had just finished a six-month tour of duty with the National Guard and moved back to Cleveland to start law school. My father, Maurice Weltman, approached me with the opportunity to become Treasurer of Menorah Federal Credit Union (“MFCU”) in Cleveland. He thought I’d be good at the job because I had served as Treasurer for my fraternity in college and had a good grasp of numbers. I eagerly took the position.
Back in those days, credit unions operated much differently than they do today. When I first came on board with MFCU, I carried the ledgers around in a tin box. Everything was manual. The credit union was ‘located’ wherever a member could reach me at any particular time. If they needed to withdraw or deposit money, I would take the ledger box to them. Over the years, I continued to work part-time for MFCU, assisting with marketing the credit union to different member groups and watching MFCU grow. The job fit in very well with my position at WWR, as even back then, the Firm represented financial service organizations on creditors’ rights issues. Through MFCU, I became more involved with the credit union movement in Ohio, attending meetings for the Cleveland chapter of credit unions, which is the governing body of credit unions in the Cleveland area.
After a few years, I had a small following of credit unions that would come to me for legal advice. I was approached to become part of the Board of Directors of the Cleveland chapter and was later elected to the Board. During my time there, one of my most significant accomplishments was the revitalization of the Cleveland chapter school- a series of educational business courses for credit unions. In just one year, my ad hoc committee was able to increase attendance at the sessions from under 10 per quarter to nearly 500 people.
Over the course of many wonderful years, I witnessed numerous changes. Back in the 60’s, credit unions were unique, quite different from banks and savings & loan associations. As non-profit organizations, the credit unions and their members embraced their separate identity and didn’t have to compete with the banks. Due to their non-profit status, credit unions weren’t subjected to many of the regulations facing banks and other financial institutions. Over the years, however, advances in technology, increased competition and rapid growth in the financial services industry started to affect credit unions. Many mergers took place, and credit unions found themselves having to offer more services to their members, including items such as credit cards, home equity loans, etc. Credit unions that may have traditionally only accepted members from particular schools or churches now had to cast a wider net in order to remain competitive, expanding their field of membership to include other members of the community.
Although many things have changed over the past 45 years, some very important things have not. I continue to see a lot of loyalty within the credit union movement and a commitment to maintaining their group-orientated status. But they can no longer operate out of a tin box. Today’s credit unions are built on brick & mortar and offer many of the same modern conveniences as banks. They are subject to the same evolutionary changes affecting other financial institutions and will need to remain a step ahead in order to stay competitive.
Robert B. Weltman is Senior Partner of Weltman, Weinberg & Reis Co., L.P.A. and focuses his practice in the Complex Collections department. Mr. Weltman is located in the Cleveland office. He can be reached at (216) 685-1040 or firstname.lastname@example.org.