Credit Unions in the last frontier: Credit Unions play a distinct role in Alaska's financial community.

• Author: Saunders, Stacey
• Position: Profiling Credit Union 1, Alaska USA Federal Credit Union, ALPS Federal Credit Union and Northern Skies Federal Credit Union - Industry Overview - Statistical Data Included - Company Profile

Ask leaders of some of Alaska's credit unions about their organizations and you will hear words like "passion" and "romance." The love affair is not one-sided. Nancy Bear Usera, senior vice president of corporate development for Alaska USA Federal Credit Union, reports 65 percent of Alaska households have at least one credit union member. Sandra Jones, CEO of ALPS Federal Credit Union, says credit unions are more visible in Alaska than in the Lower 48. The Alaska Department of Community and Economic Development, Division of Banking Securities and Corporations, reports total assets for credit unions in Alaska were $2.9 billion as of Dec. 31, 2001, an increase of 14.79 percent from 2000.

Credit Unions began in late 19th Century Germany as cooperatives to help farmers. Usera, who served as president of the Alaska Credit Union League from 1984-1991, summarizes their development in America. "The purpose of the Federal Credit Union Act was three-fold: to empower working men and women by giving them access to loan capital, to stimulate the country's economy through the purchase of consumer goods, and to create a market for government securities (bonds)."

Usera notes many of Alaska's credit unions were chartered post World War II. "Federal and military employees had to wait for their paychecks to be mailed; it could take as long as 10 days to two weeks. There were few local consumer financial services available, but families needed to have funds available while they waited for their pay to arrive. The concept of pooling savings and making low-cost loans to one another was a natural fit. It was Alaskans helping each other."

CHARACTERISTICS OF CREDIT UNIONS

The National Credit Union Administration guiding motto is: "Not for profit, not for charity, but for service." Credit unions are owned and managed through the concept of "one member, one vote." A credit union's field of membership-identity-is based on common occupation, association or community. As nonprofits, credit union net earnings are returned to members through higher dividends and lower interest rates and fees. Furthermore, they may only lend to their members and invest in government securities. Because of their emphasis on social purpose and limited lending and investments, credit unions are tax exempt. By contrast, banks are owned by depositors; the size of deposit determines voting power. Usera reflects, "I'm a romantic about credit unions because they're the only democratically owned...