The Cooperators Episode 19 Chris Mitchell on Rural Broadband and Co-Ops

If you live in the sticks and want broadband, Chris Mitchell is the man to know.

If you are a cooperator and want to hear a co-op success story, Chris Mitchell also is the man to know.

That’s because – as director of the Community Broadband Initiative – Mitchell knows the reality of what’s happening in bringing high speed Internet to rural America.  He also records a weekly podcast, Broadband Bits. It’s a good listen.

By his estimate maybe 85% of the lower 48 states land mass lacks high speed Internet.

By contrast, 90% of significantly populated areas have that access.

This is about a whole lot more than streaming porn and playing online games.  It many ways it’s about the life of rural America, much of which faces a depopulation crisis.

Good broadband just may cure that.

Nobody thinks broadband alone will keep folks on the farm. But a lack of broadband just may be enough to send them packing.

Where do co-ops fit in? As heroes in fact, roles played in much of the country by both electric co-ops and telephone co-ops (of which there are many hundreds by Mitchell’s count).

A few decades ago the telephone co-ops began to offer broadband. In the last decade the electric co-ops – generally much bigger companies with deeper pockets – have entered the picture.

Mitchell expects a stampede of co-ops entering the fight.

This all is reminiscent of the rural electrification project that brought light to the countryside in the FDR New Deal.

It worked then. Mitchell believes it will work again and is optimistic that rural America doon will enjoy quality broadband, very possibly better than what urban America gets.

“The solution is in view,” Mitchell said.  “There’s little that would stop co-ops from solving this problem.”

 Like what you are hearing? The Cooperators Podcast seeks sponsors and supporters to help us spread the word about cooperatives and how they often are the better way. Contact Robert McGarvey to find out what you can do to sustain this podcast.

The Cooperators Podcast Episode 18 Christina Jennings Shared Capital

Need a loan? You want to know Christina Jennings, Executive Director of Shared Capital, a Twin Cities based loan fund that is itself a cooperative and makes loans only to member cooperatives and there are around 250 of them.

In the past 30 years Shared Capital has made around 850 loans totalling $50 million. This year it will make around a couple dozen loans, said Jennings, with an average loan amount a notch over $100,000.

Listen closely to this podcast to hear about the loan application process. Jennings is very explicit about what’s needed to succeed.

As for the mix of co-ops funded, Jennings said Shared Capital has seen a huge spike in the number of worker co-ops – now more than half the applicants. It’s also seen a decline in food co-ops, in part because that sector is fiercely competitive right now.

Jennings also discusses how to assess the viability of a start up worker co-op.

All in, said Jennings, this is a great time to be in the co-op world – they now are seen not as a fringe but as part of the economic solution.

But opening a new co-op remains a long and tough slog that may take a decade to bring to fruition. That’s why a key question has to be: why are you forming a co-op?

Want to become a Shared Capital member? Jennings tells the how to in this podcast. 

She also tells a great story about how Organic Valley, a Shared Capital member, is living the cooperative principles in its support for other co-ops.

Along the way in this podcast you’ll hear mentions of previous podcast guests such as Stuart Reid (food co-ops),  C. E. Pugh (also food co-ops), Paul Bradley (mobile home parks), and also Davil Gill of Marquette Brewing, a start-up that in fact Shared Capital has been working with.

Like what you are hearing? The Cooperators Podcast seeks sponsors and supporters to help us spread the word about cooperatives and how they often are the better way. Contact Robert McGarvey to find out what you can do to sustain this podcast.

What Do Younger Generations Want from Credit Unions?: The CU2.0 Focus Sessions


By Robert McGarvey

Chew on this Credit Union Journal headline:  Credit Unions are losing the war for Millennials.

Worse, the average member age keeps trending up.  Per the CUJournal article, “Half of credit union members are now age 53 and older. These are members who for the most part have gone through their home-buying and wealth-building phases and are approaching the slow draw down of assets in retirement, if not there already.”

Credit unions could pat themselves on the back for wooing more than their share of Gex X – 31% of members are in that cohort – but hold the back slapping because credit unions are desperately failing in the fight for Millennials (born 1981-1996), the prime ages for active borrowers.

The CUJ piece said: “Right now, just 24 percent of members are millennials, while 40 percent of customers at digital-first direct banks and 34 percent of customers at the top 50 global bank are millennials. Credit unions are losing the battle for the youth.”

Probably credit unions are doing no better in the fight for Gen Z (born 1996-2015), whose oldest members are now out of school, in the workforce, buying cars, using credit cards, and dreaming about home ownership. They are about 20% of the US population and a reality is that most credit unions just ignore them. That’s pushing Gen Z into the arms of fintechs (can you say Venmo?) and the global and digital banks . And that’s a mistake.

What do credit unions need to do to win these generational battles? CU2.0 recently convened two focus groups.  One with three Gen Zs, in the other three Millennials spoke up.

You won’t like what they had to say.

(Both sessions are in the CU2.0 podcast series. Hear their words from their very lips. Gen Z podcast here. Millennials here.)

There is good news. Both cohorts agree that credit unions have a lot of plusses. Free checking is widely available – especially important to many who are burdened with sizable student debts.  The non profit status of credit unions is a plus with these age groups. So is the community orientation of most credit unions.

And the last big plus are the vast credit union surcharge free ATM networks, via Co-Op and also via CuLiance, where each network is 2x the biggest bank ATM networks. Just one problem: very few millennials and Gen Z know about this. “I didn’t know about this network until today,” confessed one focus group participant who works for a company that consults with credit unions.

Just about all the participants said that few, if any, of their friends and generational peers knew about any of the credit union plusses. They don’t even know they are non profits.

“They seemed sketchy to me,” said one participant who indicated he had thought credit unions were kind of wannabe banks that weren’t big enough to qualify.

(Listen to the CU2.0 podcast with Teresa Freeborn who heads CUNA’s $100 million “Open Your Eyes” campaign to raise awareness of credit unions.”)

The bad news continues. Credit unions pride themselves on their branches – but do younger generations ever step in a branch? Nope is the answer from many.  “I haven’t been in a branch in three years,” said one in the focus group.

And credit unions have a lingering reputation for serving up antiquated, secondrate technology – which is especially bad news with generations who want to do most of their banking on a mobile phone. Is the technology really this bad? Doesn’t matter if enough of the young believe it.

So is this RIP credit unions? It is not. The focus group members pointed to the strength of the credit union message and urged credit unions to get busy and active spreading their messages on social media (and maybe not Facebook – listen to the podcast to learn why).

Another idea that emerged from the focus groups is the suggestion that credit unions get busy offering financial education and budgeting skills classes geared to the young – perhaps as young as middle school students.  With many young graduating college deep in student loan debt (upwards of $37,000 apiece), these generations could benefit from classes in basic budget skills.

And get them as members early and they just may stay members – especially when they understand that the ATM networks mean they can access their credit union no matter where their travels take them.

Last advice from the focus groups: run one of your own. Gather up three or six millenials for a one hour session, do likewise with Gex Z, and listen, listen, listen.  They will tell you how to market to them if you only ask. The best route to actionable information is to go to the source. They want to tell you how to serve them better, Just ask.

Listen to the two part CU2.0 podcast on what the young say about credit unions.  

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

CU2.0 Podcast Episode 37 Cliff Rosenthal on CDFIs

The McGarvey Credit Union Podcast: CU2.0 Podcast Episode 37 Cliff Rosenthal on CDFIs http://bit.ly/2Wd5vBw

You want to know about community development financial institutions? Cliff Rosenthal is the man you want to talk to.  He literally wrote the book on CDFIs and also the longstanding credit union initiative to serve the unbanked: Democratizing Finance: Origins of the Community Development Financial Institutions Movement.

Have CDFIs lived up to their potential?

Have credit unions changed the shape of financial services in America?

Rosenthal has opinions and he shares them in this podcast.

Along the way he talks about his stint at the CFPB – and the ingrained credit union executive distrust of that institution. Which may not be entirely warranted.

Rosenthal pulls no punches. He said, “It dismays me that 100 years after the birth of credit unions we still have a significant problem of the underbanked and unbanked.” And, note, about 25% of households falls into the category.

 Rosenthal also said that in 1990 there were around 13,500 banks and thrifts and a like number of credit unions.  There now are about 5500 of each.  “The number of credit unions falls by 200 to 300 each year.  Ten years from now there will be 3000, 3500 credit unions.”

That math is flawless. And it has to scare you.

In this podcast, you’ll hear a discussion of the successes of a Mississippi credit union executive Bill Bynum.  He told his own story in this podcast.

You’ll also hear about Jim Blaine, the charismatic, longtime CEO of State Employees’ Credit Union in North Carolina, one of the country’s biggest.

And you’ll also hear Rosental insist that many credit unions that focus on serving the underserved do better financially than those that focus on fighting with banks for more affluent consumers.

If you enjoy this podcast, listen in to the podcast with Cathie Mahon, CEO of Inclusive, a trade group for institutions that focus on community development.

Listen, too, to this podcast with Bill Bynum of Hope.

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto

The Cooperators Podcast Episode 16 Felipe Witchger Community Purchasing Alliance

Bulk buying means lower costs. That’s a fact of life in the US and it also works to the detriment of smaller, community oriented institutions – think churches, charter schools, various non profits.

They are too small to win those discounts so they pay high prices for basic services and commodities.

The Community Purchasing Alliance was formed to solve exactly that inequity for non profits in the Washington DC area.

Right now about 75 non profits in the DC area are saving around $1 million annually on $17 million in purchases of electricity, trash hauling, security, copying, and other commodity services. That discount happens because they buy through CPA and its founder, Felipe Witchger, is the guest in this week’s podcast.

He tells how his organization formed – he tips his hat to Paul Hazen, a longtime Washington DC co-op heavyweight as suggesting it function as a co-op.

He also tells how CPA wins discounts for its members.

Felipe also observes that CPA now also operates in southern Connecticut and North Carolina. It also is scouting cities for an expansion later this year and as many as five may be targets. Listen up to find if your city is on the list – and if it isn’t, you’ll hear what Felipe is looking for in partners.

A couple housekeeping notes:

* He says CPA’s biggest member is Kipp DC. That’s a network of college prep schools with an annual budget over $100 million.

* There’s intermittent wind noise. Sorry about that. Some was deleted but some stubbornly persisted. The podcast can be heard and the content is valuable however, so persist.

Like what you are hearing? The Cooperators Podcast seeks sponsors and supporters to help us spread the word about cooperatives and how they often are the better way. Contact Robert McGarvey to find out what you can do to sustain this podcast.

The Cooperators Podcast Episode 15 C. E. Pugh on Grocery Success

For many of us, our warmest, most intimate connection with a cooperative is our local grocer and at the National Co+Op Grocers the business of that co-operative is helping its 145 members, each a consumer facing co-op grocer, successfully compete against increasingly powerful national grocers.

The good news is that most co-op grocers are holding their own.

There had been tough times for co-op grocers, admitted this podcast’s interview, C. E. Pugh, CEO of the National Co+Op Grocers.  A big reason is that in the past decade the big national grocers, from WalMart on down, all discovered the consumer appeal of organic, of brown rice, of soy and almond milk, the kinds of products co-op grocers had long depended upon for successes.

And then they had a lot more competition.

But co-op grocers also have a trump card, said Pugh. They can and should double down on local goods, local farmers, the local community.  They are truly of the local community and to succeed, they need to accentuate that.

Many are doing just that.

Consider this podcast a guide to running a thriving food co-op.

Want to know still more about food co-ops?  Tune into The Cooperators Podcast Episode 9 with Stuart Reid of the Food Co-op Initiative. That discussion has a focus on starting new food co-ops, where the Pugh talk is more tilted towards succeeding at an operating co-op.

Like what you are hearing? The Cooperators Podcast seeks sponsors and supporters to help us spread the word about cooperatives and how they often are the better way. Contact Robert McGarvey to find out what you can do to sustain this podcast.

The Cooperators Podcast Episode 14 Neal Gorenflo Shareable

Call this podcast a deep dive into platform cooperatives and more broadly the sharing economy. That’s what Neal Gorenflo, executive director of Shareable in San Francisco, spends his days noodling on. This is a wide ranging, largely unstructured conversation but there are headline moments strewn throughout, from Gorenflo’s Road to Damascus epiphany that prompted him to resign a corporate job and become a sharing guru through his bareful perspective on Uber – sizzling stuff – and musing about Emilia Romagna which he sees as something of a polar opposite of Silicon Valley because it’s a place where cooperatives really matter.

In many ways this is a challenge to what Gorenflo calls Silicon Valley orthodoxy where the true believers are convinced their way is the best way to build a business. Is it really? Gorenflo has real doubts.

Want some good news about cooperatives in the US? You’ll hear it here. We just may be on the cusp of a boom in cooperatives as more of us come to see that this is a flexible business format with lots of benefits for workers, communities, owners.

Like what you are hearing? The Cooperators Podcast seeks sponsors and supporters to help us spread the word about cooperatives and how they often are the better way. Contact Robert McGarvey to find out what you can do to sustain this podcast.

The Cooperators Podcast Episode 13 Nathan Schneider

“Everything for Everyone” – that’s the title of Professor Nathan Schneider’s book that looks at many kinds of innovative co-ops and it’s a book that gave me optimism that there just may be a bold, bright next act for cooperatives in the US.

In some ways co-ops look to have stalled – where are the new credit unions, the new grocery co-ops? There just aren’t many.

Does that mean the end is nearing?

Nope. Schneider in this podcast talks about wholly new energy for what he calls platform co-ops and also reimagined housing co-ops for instance.

He also is a big booster of purchasing co-ops which, he says, often provide significant benefits to their members but without winning much public notice for the good they do.

There’s also a lot of enthusiasm around employee ownership of businesses – worker-co-ops for instances – which, Schneider points out, won support from both Paul Ryan and Bernie Sanders and it is difficult to imagine them agreeing on anything else.

New times call for new kinds of co-ops and that is happening. Not always smoothly, not always easily, but it is happening.

Why aren’t there still more co-ops? A lot of this podcast is an exploration of the infrastructure requirements that will help enable more co-op formation and success. It can happen. And you’ll hear concrete ideas about the changes that should happen.

And co-ops just maybe can bring improvement to many areas of our lives.

Co-ops also faced what might be called PR problems in the cold war era, said Schneider. It was not a good thing to be seen as a cooperator which some believed was a step nearer Communism. But that stigma may be fading away.

And that may also help an ushering in of a boom era for cooperatives.

A word on format. This podcast started out on one medium – but after 15 minutes that signal vanished. Another 45 minutes were then recorded on a different channel. If you think you hear differences you are probably right. But the quality is good throughout. And the ideas are provocative.

Listen up.

Like what you are hearing? The Cooperators Podcast seeks sponsors and supporters to help us spread the word about cooperatives and how they often are the better way. Contact Robert McGarvey to find out what you can do to sustain this podcast.

CU2.0 Podcast Episode 33 Erin Coleman Filene on Thinking Big and Better

How long does it takes your credit union to respond to a mortgage application with a verdict?  Anything longer than 10 minutes just may be too long. Are you still in the game?

At Filene, Erin Coleman, senior impact director, mulls just that kind of question as she hunts for ways for credit unions to stay competitive in a landscape that is ever more perilous.

She also discusses the need for credit unions to involve more young people – as members, sure, but also as employees and as volunteers, even board members.

Then there’s the question of how far in the future you are thinking. A year or two isn’t good enough. Can you think five years out? Ten? Okay, what impacts do you think autonomous cars will have on credit unions – and know they are coming and they will impact you. Are you ready? Coleman talks about exactly that question here.

This is a wide ranging podcast but it just may help light a path to a successful tomorrow. Listen up!

Like what you are hearing? Find out how you can help sponsor this podcast here. Very affordable sponsorship packages are available.

Find out more about CU2.0 and the digital transformation of credit unions here. It’s a journey every credit union needs to take. Pronto