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The Credit Union Movement in Vermont: A Brief History

Introduction Background Early Years 1945-1954 1955-1960

 1960-1968 1968-1982 1982-Present Conclusion Notes

The Robert Rosegrant Era, 1960-1968

Text Box:  Robert Rosegrant at the Vermont Credit Union League's Annual Meeting in 1960.
Courtesy AVCU.
Such optimism was further supported by the fact that Butler's replacement was one of the Vermont's leading credit unionists: Robert Rosegrant. After meeting Roy Bergengren in 1946, he had served the movement in a variety of essential roles for the next decade and a half, including briefly filling in as Managing Director between Bergengren's death and the beginning of Butler's tenure in 1956. Deeply experienced and profoundly committed to the credit union idea, Rosegrant was instrumental in helping to successfully navigate the Vermont movement through the challenges and opportunities of the 1960s.

One of the programs he pursued most vigorously was that of increased educational activity. Its importance to him is powerfully expressed in his report to the VCUL's 1962 annual meeting, where he argues that "in order to convince our members and potential members, as well as groups of people with a common bond who do not yet have a credit union, we must know how to provide the maximum service within the framework of the credit union philosophy. How can we best learn how to do this? There is no question as to the most worthwhile method; only in credit union schools, institutes, chapter meetings, and workshops do we get the knowledge of how other credit unions have solved their problems and rendered better service through trying new ideas."

 Over the course of Rosegrant's tenure as Managing Director, all of the aforementioned resources would become a reality. The initial step was taken in 1960, when the Bergengren Scholarship Fund made its first disbursement. In addition to sending a $50 donation with Roy Bergengren's widow, Gladys, to support her credit union organizing work in Fiji, $250 was spent on creating and distributing a standardized handbook to all Vermont credit unions. This document quickly proved to be an essential resource for the volunteers who staffed many small credit unions, and, in coming years, one of the major roles of the League's Education Committee was to draft and distribute new handbook articles.

 

Two years later, in the fall of 1962, the Education Committee put on its first "Institute," a day-long program of workshops and presentations designed to provide credit union volunteers and staff with vital skills and knowledge of best practices. While the attendance at the initial institute was disappointingly sparse, its follow-up in the spring of 1963 attracted well over a hundred participants. In short order, the League Institutes became important semi-annual events that served as vital sources of professional knowledge for many Vermont credit unionists.

For those seeking more in-depth educational experiences beyond a single day of workshops every six months, however, opportunities were initially quite limited. The Credit Union National Association offered a two week "Credit Union School" in Madison, Wisconsin each summer, but the distance and expense meant that it had been possible for only a handful of Vermonters to attend by the early 1960s. Running such an extensive program by itself was clearly beyond the modest means of the VCUL, but, when the idea was floated of a regional credit union school supported by all of the New England Leagues, the Vermont movement was an eager participant.

 The school idea was developed through the New England Regional Planning Conference, a group formed in 1960 in response to the realization that "there were many services that the individual leagues in New England could not offer their members because of size and cost." After initially sponsoring some day-long Institutes, in June, 1961, the Conference organized a three day credit union school at the University of New Hampshire, which was attended by ninety-nine credit union people, including eleven Vermonters.

 Encouraged by this success, the Conference scheduled a week-long school at the same location for the following summer. Though educationally successful, attendance was disappointing, and the project was temporarily put on hold. However, the Conference's goal for "New England [to] have a summer school comparable to the one at Madison, Wisconsin"1 was not diminished by this setback, and they spent 1963 planning a CUNA-accredited two week school for the summer of 1964. Attended by thirty-seven credit union people from across the region (including three sent with the financial assistance of the Bergengren Scholarship Fund), the school's first year was a resounding success. Offering a three-year program, the New England school served as a foundational educational experience for many of New England's credit union leaders in the the subsequent decade.

 In addition to its educational achievements, the League was also successful in the legislative arena during Rosegrant's tenure. As the credit union movement matured both nationally and in Vermont, the for-profit banking industry increasingly began to view credit unions as a source of meaningful competition. In 1956, an article in the American Banker worriedly outlined the movement's substantial growth since 1941, concluding that "it's better to be swallowed by a whale than to be nibbled to death by minnows."2 As a result of such concerns, lobbyists for the banking industry were actively pushing for the passage of restrictive credit union regulations at both the Federal and State levels by the early 1960s.

 The success of those campaigns varied by state, but, in Vermont, the credit union movement consistently defeated such proposals while getting its own favored legislation passed throughout the 1960s. A good example of this occurred in 1962, when an American Bankers Association official sent a letter to Vermont banks calling on them to oppose a bill advanced by the VCUL and its supporters. Despite this opposition, Rosegrant noted in his report to the League's 1963 annual meeting that "no influence [was] seen in the House where it has passed without a single dissenting vote." As for further conflicts down the road, he optimistically predicted that "we will not be hurt by future ABA attacks if we maintain our credit union philosophy."3

 This perspective was powerfully confirmed a few years later, when, in 1965, the Vermont Legislature mandated an overhaul of the regulations governing credit unions. In response, the VCUL's Legislation Committee drafted a bill based on the movement's ideal regulatory framework, which was then introduced to the Legislature. The banking lobby pushed hard against it, which prompted Rosegrant to tell the movement's leaders in 1967 that "[n]ow is the time for anyone who can to use his good influence to convince the bankers that we present no threat to their organization. The feeling of bank vs. credit union is still present."

 Whether the bankers backed off or the movement's strength simply overwhelmed the opposition is unclear; what is certain is that final bill was a resounding victory for Vermont credit unions. As VCUL Board President Charles Howe proudly noted in 1969, "this complete revision of the credit union statutes provides Vermont Credit Unions with one of the best set of statutes ever enacted for state-chartered credit unions in the United States."

 While the movement made great strides educationally and legislatively in the 1960s, the decade was not without its challenges. One regular source of anxiety for the League's leadership concerned the movement's declining rate of growth. In the 1950s, dozens of new credit unions had been founded, and the movement's rate of asset growth was consistently over twenty percent. By contrast, many years in the 1960s saw that rate drop into the teens, and the total number of credit unions only increased by eleven, from sixty-six to seventy-seven. In 1964, Rosegrant attributed this worrisome trend to the fact that:

too many people are forgetting the basic purpose of the credit union movement. They are becoming too conscious of the profit motive... that dictates policies of high dividends and high interest refunds before it considers service ... I mean also, giving preferential interest rates on various amounts of money - charging the little man borrower more than the big one. Every good credit union should ... operate profitably, but I would hazard the guess that this emphasis on profit is the reason our membership growth is down this year. We are not primarily a financial institution as they are generally known. We are a service organization and our appeal over the years to ever increasing numbers has been that we serve before we profit.4

 Though the above statement indicates that Rosegrant viewed the declining growth rate as primarily the result of moral failure, it is likely that an additional force was at work that compelled many credit unions to be more profit-focused: competition. As the financial services industry became more complex, other institutions began to offer the small consumer loans that had previously been provided almost exclusively through credit unions. By 1968, this had become such a serious issue for the Vermont movement that VCUL President Charles Howe devoted an entire section of his annual report to it, concluding that "[i]nstitutions cannot maintain a position of status quo for long. They must go forward or backward."5

 This recognition that credit unions would need to innovate to survive grew consistently over the 1960s, but the issue came publicly to a head when the CUNA Planning Committee delivered its report to CUNA's annual meeting in May, 1965. According to Charles Howe, the Committee "outlin[ed] steps that may be necessary in the years ahead, if the credit union movement is to continue to prosper. Some ideas were a central fund, providing credit at point of purchase and development of transaction facilities such as travelers' checks, money orders and credit cards."6  Decried by some as advocating a radical departure from core mission and values of credit unionism, the report nonetheless had a powerful impact on the perspective of the Vermont movement, and the goal of "increas[ing] our services, but remain[ing] constant in our purpose" came to reside at the core of Rosegrant's vision for the rest of his years as Managing Director.

 At the VCUL's 1968 annual meeting, Robert Rosegrant announced his intention to retire as of December 31 of that year. In his final annual report, he both reflected on the accomplishments of his time at the Vermont movement's helm and speculated on its future. Since taking over after Butler's passing in 1960, the movement had grown considerably in size and stature, helped along by the host of new resources and programs that Rosegrant had worked to foster. Both the New England Credit Union School and the League Institutes contributed substantially to the increasing professionalism of credit union staff and volunteers, and the Vermont Central Credit Union, which attained financial independence from the VCUL in the late 1960s, served to ensure that credit union money was reinvested in the movement, as well as helping to stabilize credit unions that found themselves in financial trouble. Furthermore, his lobbying efforts had ensured that the interests of Vermont credit unions were well represented in the State Legislature, the benefits of which came to full fruition in the passage of the model credit union act in 1968.

 As for the challenges facing the movement in the coming years, Rosegrant believed that the trends of technological innovation and increased competition that had emerged over the 1960s would continue to intensify. From a long-range perspective, he noted that the movement needed to begin preparing itself for computer bookkeeping in all credit unions, as well as centralized service centers. However, in the short term, Rosegrant called on Vermont credit unions to continue supporting the professional development of credit union people and, to counter the incursions of for-profit banks and other financial institutions onto traditional credit union turf, he advocated for the League to undertake a more active public program of credit union promotion. With an eye to these challenges, his final report expresses an attitude of cautious optimism as he turned the movement's reins over to the able hands of Charles E. Howe.

1 Vermont Credit Union League, VCUL Annual Meeting Bulletin, 1962, Papers of the Association of Vermont Credit Unions, South Burlington, VT.
2 Moody and Fite, [].
3 Minutes of the Annual Meeting of the VCUL, April 20, 1963, Papers of the Association of Vermont Credit Unions, South Burlington, VT.
4 1964 VCUL Annual Meeting Report.
5 1968 VCUL Annual Meeting Report.
6 1966 VCUL Annual Meeting Report.

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