How Iowa Credit Unions Benefit the State
Over the past 28 years, I have dedicated my career to improving the financial lives of people living and working in the Quad-City area. Early in my career, I worked for local community banks that merged into larger, national banks. In 1999, I started working for the credit union and have had the pleasure of serving our members for the past 16 years, serving as CEO since 2013.
As a “reformed banker,” my career has given me a unique perspective into the difference between banks and credit unions. Founded with the philosophy of “people helping people,” credit unions are a needed choice in the financial services marketplace. As not-for-profit financial cooperatives, credit unions return earnings to members in the form of better rates on loans and lower fees. Unlike the structure of a bank, which is designed to generate profits for a select group of stockholders, the credit union structure helps more than one million Iowa credit union members save approximately $100 million annually compared to what they would have paid for similar services at a bank.
In addition to helping individual members, Iowa’s credit unions have a large impact on the state’s economy. A new economic report from Iowa State University found Iowa credit unions contributed $1.1 billion in economic productivity to the state’s economy in 2014. Every $1 spent by Iowa’s credit unions added another 77 cents of value to the economy, and every job at an Iowa credit union created an additional 1.28 jobs elsewhere in the state economy. When the direct and indirect jobs created by Iowa credit unions are combined, Iowa credit unions contribute 7,402 jobs paying $349 million in wages to the Iowa economy.
The credit union philosophy also is reflected in our legislative priorities. As we look to the 2016 state legislative session, credit union advocates will be asking state policymakers to support the cooperative tax structure of our not-for-profit financial institutions. This allows credit unions to put the interest of members ahead of the motivation for profits. In addition, credit unions will be advocating for increased funding for valuable financial literacy programs, like the Iowa Credit Union Foundation’s statewide Individual Development Account (IDA) program, a matched savings program that helps Iowans save for an asset that will help them improve their lives.
Iowa’s credit unions help their members save money, support local communities and provide a significant boost to the state’s economy. Consumers win when there is choice and competition in the marketplace. Simply put, state legislators can help their constituents by supporting Iowa’s credit unions and the more than 1 million credit union members statewide.