The United Nations has declared 2025 the International Year of Cooperatives, highlighting how cooperatives build a better world through their vital role in sustainable development, inclusive growth, and strengthening community resilience.
As not-for-profit cooperatives, credit unions are uniquely equipped to foster financial well-being for all through their adherence to the seven Cooperative Principles originally adopted by The International Cooperative Alliance and an emerging eighth cooperative principle set by the National Credit Union Foundation and America's Credit Unions.
This month, let's learn more about Cooperative Principle #1, Voluntary & Open Membership, and how credit unions live out that principle daily!
The National Credit Union Foundation defines Voluntary & Open Membership as the following:
Credit unions are voluntary, not-for-profit financial cooperatives, offering services to people willing to accept the responsibilities and benefits of membership, without gender, social, racial, political, or religious discrimination.
This first principle of “Voluntary & Open Membership” was established by the International Cooperative Alliance in 1937. The alliance designated a "voluntary” organization as one created by the free choice of its members. The voluntary aspect of participation is crucial for cooperatives, as it ensures their sustainability and viability in competitive markets. Cooperatives rely on the voluntary support of their members, who utilize their services and contribute capital through membership shares, which come with voting rights and typically offer dividends or returns.
Next, “Willing to accept the responsibilities and benefits of membership” emphasizes that, while membership is open, individuals must also be prepared to fulfill the obligations that accompany it. The specific duties expected of cooperative members can vary, but generally include exercising voting rights, attending meetings, using the cooperative’s services, and building capital.
“Membership” is a core component of a cooperative enterprise, which is collectively owned and democratically governed by those who choose to join based on the cooperative’s characteristics. At credit unions, members share a common bond or a “field of membership.” Members are allowed to join based on:
- Employer—many employers sponsor their own credit unions,
- Family– most credit unions allow members’ families to join,
- Geographic Location—many credit unions serve anyone that lives, works, worships, or attends school in a particular geographic area
- Membership in a Group – membership in a group such as a place of worship, school, labor union, or homeowners’ association may qualify you to join.
In Wisconsin, credit union members vote for a board of directors that manage their credit union, and, while credit unions are member-owned, all deposits are insured up to $250,000 per member account by the National Credit Union Share Insurance Fund, managed by the National Credit Union Administration or NCUA and backed by the full faith and credit of The United States.
Membership signifies a special bond between the cooperative and the individuals it aims to serve. This relationship guides the cooperative's operations, influences its business practices, and shapes its future goals. Recognizing the importance of membership means that cooperatives strive to deliver exceptionally high levels of service to their members, who are the fundamental reason for their existence.
As not-for-profit financial cooperatives focused on fostering financial well-being for all, credit unions reflect these time-honored Principles that have built the bedrock for their success and member success. Stay tuned as we continue to celebrate the Cooperative Principles throughout 2025!