Feminist Federal: Economic Self-help

Fed Up With Banks? Consider Credit Unions

As women continue to take the reins of control in their own lives, their need for control over their own finances becomes more and more evident. To make self-determination a reality, awareness of who you are and where you are going must be accompanied by control over your own resources-in concrete terms, enough money to get you where you want to go and enable you to do what you want to do.

The Feminist Federal Credit Union (FFCU), founded on August 26, 1973, the anniversary of Women's Suffrage, is the oldest women's financial organization - "women's" in that it is run for and by women. Its basic goal is to see that women have a place where they can get credit.

A credit union is defined by the Federal Credit Union Act as "a cooperative association ... for the purpose of promoting thrift among its members and creating a source of credit tor provident or productive purposes." As Roy Bergengren, a pioneer n the credit union movement, put t, "The credit union strates the practical ty of the brotherhood of man." The Feminist Federal applies this principal to the sisterhood of woman.

The mark of a credit union is its organization around a group with a strong common bond. It may be religious affiliation, place or type of employment, or ideology.

In any case, the credit union separates itself from commercial institutions by one very major difference: banks are in business to make money, while credit unions are in the business of helping people. It's the difference between personal and impersonal, sympathetic and indifferent.

The members of a credit union are its "owners"- the money is theirs collectively. Members buy "shares" in the organization. This money is the source for loans. The interest paid on these loans is the "dividend" for the group- it provides the funds to pay interest on members' savings accounts.

Frequently, poor people fall prey to loan sharks and usurers. They may spend years repaying a loan many times over n interest and still not touch the principal. A credit union can provide low-cost loans and convenient repayment terms that can be adjusted to suit individual members' needs. Since only members are eligible to apply for a loan, there is a togetherness about this kind of transaction not found in dealings with established commercial institutions, which regard I people more as objects than as people-despite any bank's claims to the contrary.

The management of a credit union is representative. Since a large number of members " can't manage an organization, a board of directors is elected from the membership. This board is responsible to the members. From the board is elected a president, one or more vice-presidents, a secretary and a treasurer. The management set-up can vary from one credit union to another, depending on the specific needs of the organization. If a group gets big enough, it will want to hire a manager and additional paid staff to better take care of business.

The American credit union movement blossomed during the early 2Oth century. In those days, a credit union could make the difference between dollars squandered in a bar room and dollars providing a better standard of living. In 1909 Massachusetts enacted the nation's first statute authorizing credit unions.

The movement really got off the ground when it gained a champion, in the person of Roy Bergengren. During the '20's, this attorney's whole-hearted efforts gave teeth to the credit union dea by putting legislation on the book. defining and authorizing credit unions. Without this type of official sanction, no amount of hard work and good intentions would have done much good.

It is only appropriate that the credit union movement, aiming at financial self-determination, should combine with the women's movement to form a women's credit union.

The Feminist Federal Credit Union, originally located on W. 8 Mile near Woodward, has recently relocated at 23647 Woodward, between 9 and 10 Mile, in Pleasant Ridge.

The Feminist Federal, co-founded by Valerie Angers and Joanne Parrent, now has assets of over $1 million. Unlike male-controlled banking and loan institutions, the FFCU offers freedom from discriminaron on the basis of sex, marital status, or the credit rating of a husband or father.

Only other women review a woman's loan application and her reasons; a woman can be honest about her needs. Whether it's a conventional car or home loan, money for a divorce or an abortion, or funding for almost any move toward self-fulfillment, it makes no difference to this woman-centered institution.

Becoming a member requires only signing a membership application, paying the $2 membership fee, and opening a shares account with $5 or more. All members of the National Organization of Women (NOW) and the Women's Liberation Coalition of Michigan are eligible to join the Credit Union. NOW has members of both sexes, and so does the FFCU- but the membership, of course, is predominantly female.

All savings at the Feminist Federal are insured to $40,000 by the National Credit Union Administration. Dividend rates are set by the board of directors annually, semiannually, or quarterly, up to a maximum of 7 per cent- with no minimum balance or time requirements. The amount of dividend s based on the ratio of earnings to expenses.

The Credit Union pays for Share Life Insurance: in case of death, the member's beneficiary will receive an amount equal to the member's share account. The maximum amount of insurable shares is $2,000.

All members, and only members, are eligible for loans. The criterion include character and the ability to pay back the loan. Frequently, banks' idea of "character" is limited to earning power, job stability, and length of employment at one place. This type of thinking penalizes a lot of people who are certainly as needing and deserving as those with more stable financial situations.

The annual loan interest rate is 12 percent, or 1 per cent per month on the unpaid balance. Loan protection insurance covers the loan in case of the member's death, and is paid for by the FFCU. Most other lending institutions add the cost of this insurance to the cost of the loan. Disability insurance is optional to the member.

Money orders are available at 25 cents each in amounts up to $250. "Share drafts," which can serve the purpose of personal checks, make the Feminist Federal quite a full-service institution.

In the words of Joanne Parrent, "We don't want to be an alternative. We want to take over, of course."

How did the whole thing get started? Joanne Parrent talks about the beginning of the FFCU: "We got the idea to start the Credit Union about three years ago at this time. Valerie Angers and myself were, and had been, involved in the feminist movement in a lot of different areas, and we were very interested n the self-help movement and the women in California that started health centers. We visited them out in California, and we were really inspired by what they were doing, in terms of getting together a service that women controlled.

"The whole concept of self-help in the health field s that our own experience with our bodies s really relevant, and that we should be sharing this knowledge with each other and passing it on," Parrent continues. "We thought about what other areas women should be controlling in their own institutions, and providing services in."

The answer, obviously, was money. This was fired by Valerie Angers' personal experience n trying to establish her own credit after a divorce. Why a women's credit union instead of a bank? The bank s not feasible, because you need big money from shareholders. Many fewer women than men are in the position, by themselves, to put up the large sums necessary for a bank. But many women working together can achieve the same effect.

Ms. Parrent notes that the membership of the Credit Union is as diverse as the population of Detroit-as are the memberships n Ann Arbor, Lansing, Bay City, and Flint.

There are some wealthy members, but the profile of a typical Feminist Federal shareholder is a "bad risk", according to conventional standards. Generally, there is a consistently lower wage level and little concrete collateral, in the forms of homes, cars, or real estate.

This only indicates that women, as wage earners, are still getting lar less than their piece of the pie. The membership may be a "bad risk" on paper, but in reality this only reflects women's low place on the pay scale. Someone may not earn a high wage or own valuable assets, but this does not necessarily mean that they will not faithfully repay a loan. The standards that dictate this type of thinking are male, high-wage standards that operate against low-income folks - and women are certainly part of this group.

Not only does the Feminist Federal offer women a source of credit - it also provides a very positive self-image for its members. As Ms. Parrent says, "All of a sudden, here's an institution that controls $1 million and controlled by women. Psychologically, I think that does something."

Anne Sinila is a freelance writer who lives in Detroit.

Photo Caption:

Unlike male-controlled financial institutions, the Feminist Federal offers freedom from discrimination on the basis of sex, marital status, or the credit rating of a husband or father. The membership may be a "bad risk" on paper, but this only reflects woman's low place on the pay scale.