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Leading the way
In 2016, we became the first credit union in the United States to become a member of the Global Alliance for Banking on Values (GABV). This alliance of banking leaders from around the world has a collective goal to change the banking industry from a profit-only model to one that is transparent, sustainable, and supportive of the real economy. We are proud to be part of this like-minded community where our banking values are focused on people, planet, and prosperity.
Principles of Values-Based Banking
Our principles simplify our decision-making process. They are our guiding light, reminding us of our main priorities: our members and communities. Period.
An approach that keeps people, planet, and prosperity at the heart of the business model
Grounded in communities, serving the real economy and enabling new business models to meet the needs of both
Long-term relationships with clients and a direct understanding of their economic activities and the risks involved
Long-term, self-sustaining, and resilient to outside disruptions
Transparent and inclusive governance
All principles embedded in the culture of the financial institution
How do we measure our success in banking on values?
We intend to meet the individual needs of our members in a way that is sustainable from an environmental, social, and economic perspective. We hold ourselves accountable to this commitment and measure ourselves through a quantitative Scorecard designed to capture our overall financial performance with a lens on serving the real economy.
Think of this as our cookie jar with savings for a rainy day. In more complicated terms, it’s our accumulated net income (since the beginning of our time), divided by our total assets (loans, investments, fixed assets). It’s a measure of how much money we have to buffer us against any unforeseen storms and to invest in member services like upgrades to our branches and technology.
Our return is the money we made or lost over a period of time. When you invest in something like a certificate of deposit or a stock, you get a return on your investment. Likewise, the credit union receives a return on the loans made to members, investments, and other assets. The greater the return for the credit union, the more those returns can be passed on to members.
Lending money is a risky business. If a member defaults on a loan, like a car loan or mortgage, the entire membership is impacted by that loss. We do our best to protect all members by lending to those who are able to manage loan payments and by supporting those who can’t pay their loans with financial education that helps them become more financially stable. Asset quality is an assessment based on how many loans are in default for up to 60 days. The better we are at educating and lending, the better this number looks.
Ideally, all our loans would be funded by our members’ deposits. This is the true spirit behind the credit union movement and the best way to keep our money local. But when we don’t have enough deposits to cover loans, we borrow from cooperative banks and other financial institutions. This metric indicates the percentage of loans that are funded by member deposits.
Real economy assets
We want to invest in a way that directly helps our members. When we invest in our communities, we can see and feel our impact through the growth of local businesses, building of homes, job growth, and more. The loans and investments we make to local people and businesses (rather than in the markets) are real economy assets.
Real economy revenues
This number is related to real economy assets and return. Real economy revenues are a measure of how much income (return) we receive from the loans (real economy assets) we make to members for their purchases.
Return on member
The value we create for our members is at the heart of our existence. This metric speaks to our core value of “giving back” to members. It helps us stay focused on ensuring we are keeping our members front and center by doing what’s good for them. This is a measure of how well we do for our savers and borrowers as compared with our peers in the industry. We improve this metric through competitive interest rates, and the convenience and affordability of other products and services our members use.
Triple bottom line assets
We use a sustainable business model when measuring success. Most financial institutions have one bottom line that measures success—financial profit. We include two additional bottom lines—social and environmental impact. We meet these additional bottom lines by funding energy efficiency and solar purchases to protect the environment, and make investments in local businesses and affordable homes to create social prosperity and improve the quality of life for Vermonters.
Digging deeper, we find inspiration in the observable results of our work
In addition to the quantitative (numbers-based) analysis of the impact our value-based approach makes on members and our communities, we also engage in qualitative analysis (observed but impossible to measure with numbers), which can be as inspirational as it is informative. Here are some of the highlights included in our qualitative analysis:
As a credit union grounded in a philosophy of people helping people, inclusion is part of our DNA. We continue to solidify our vision of inclusivity through internal discussions and the development of an inclusion statement.
Our people are our greatest asset. Our prime objective is to keep our employees happy, healthy, and engaged. How do we do that? We care for employees every day by offering opportunities that build their skills and nurture their interests and by creating space in their week for professional growth. We offer generous benefits and look for ways to enable a healthy work/life balance. We celebrate each other formally and informally, with employee galas, monthly recognition awards, and peer feedback gathered throughout the year.
When disaster hits, we help members keep food on their tables and a roof over their heads with low- to no-interest emergency loans that help cover necessities. Charitable donations to local nonprofits support more vulnerable Vermonters and our premier event—the Point to Point—funds the Vermont Foodbank’s mission to end hunger in Vermont. Throughout the year, we look for ways to prevent or alleviate hardship in our communities.
Our Board of Directors is elected from our membership and is run in the spirit of cooperation to support a values-based, community- and human-centered philosophy. Directors guide the direction of our financial cooperative, and act as stewards ensuring that VSECU meets the needs of the members while protecting the solvency of the entire credit union for the membership.