Local credit unions’ focus, culture not like Wells Fargo’s

It appears history does repeat itself, as consumers again are witness to — and many victims of — questionable corporate action. When Wells Fargo employees resort to opening bogus accounts without customer knowledge, we are right to ask why. Since it happened at a top-level national financial institution, it casts doubt on the motives and leadership at others.

Do not mistake Wells Fargo’s actions as epidemic among financial institutions, and hold off blaming front-line staff looking to stay employed. Instead, step back and consider how institutional focus and culture contribute to such actions.

The pressure for profit is unmistakable. Investors want to see their holdings grow, which in turn feeds Wall Street results. Executives look to reap the rewards of big numbers. At Wells Fargo, the profit motive meant people at the bottom faced unrealistic goals and acted at the expense of customers’ trust. Ten years ago, we saw other big banks pushing products and services customers did not need or could not afford, and the financial crisis followed.

Like their counterparts the nation over, South Carolina’s 63 not-for-profit credit unions are different by design. They are cooperatives directed by volunteer boards and owned by their account holders. Decisions are made to the benefit of all members, not stockholders. Account holders are rewarded from earned profits, typically in the form of lower loan interest rates, higher savings interest rates and lower fees. Some credit unions even pay dividends to members.

Our goals and staff are focused on the members and communities each institution serves. By working together with account holders, everyone involved shares in the benefits. Put simply, credit unions are driven by people, not profit, and they’ve been that way since they began more than a century ago.

What goes around comes around, and Wells Fargo’s actions recall historical choices in culture and focus: stockholder profit, executive income and inflated results, or mutual benefit, integrity and consumers’ best interests. Which is worth preserving?

This story was originally published October 3, 2016 at 5:00 PM with the headline "Local credit unions’ focus, culture not like Wells Fargo’s."