At the end of September, 2014, members and friends of the Permaculture Credit Union (PCU) received the big news: PCU is merging with another credit union (Sandia Regional). This news raised concerns and questions from all of those who have banked or supported PCU in the past decade.
As co-founder, member and supporter of the Permaculture Credit Union I am compelled to write a few words to explain this merger and how I hope to see the work of this ethically-grounded financial institution go on, with more strength and effectiveness then before.
But first, a few words of introduction.
Permaculture and Money
One of many of Bill Mollison’s stories told in the Permaculture Design Course that I took in the 80-s, was the tale of the Maleny Credit Union (MCU). MCU was founded in 1984 in Maleny, Queensland, Australia by Jill Jordan. Jill was inspired by Molisson’s statement that
to have a sustainable permaculture development you need to solve your financial and economic problems first
Jill had already founded the local food co-op and was a firm supporter of local economy and enterprises. The MCU became a model in Australia of ethical business practices. Jill ultimately left the MCU, became a city councilor and later worked on the board of a water recycling company. She died in 2010. Today, MCU has 5000 members and $ 51.5 million in assets.
This success story encouraged me to read everything I could find about financial institutions, and to delve deeper into the understanding and teaching the “invisible structures”. There was a realization that if even if we spend considerable efforts on regenerative work but let our money to be used by the banking system for destruction of the environment or less-than-ethical investment, then something is clearly amiss.
In permaculture, “invisible structures” encompass finance, legal systems and social organization – and our concerns with making them sustainable and ethically informed. These are the systems that that invisibly affect our work, efforts, and their effectiveness. Their counterpart is the more familiar visible structures: gardens, soils, structures, trees and animals – and their sustainability.
As a solar builder in the 60’s and 70’s I had run into the difficulty of obtaining financial backing from banks for innovative new ideas in home building. I had had the same problem in obtaining agricultural loans for organic growing when the loan officer noticed that I didn’t have herbicides and chemical fertilizers as budget line in my loan application. With this background of negative results from financial institutions I often dreamed of a different form of finance, one that promotes and supports sustainable practices. Permaculture was my gateway into turning that dream into a reality.
Starting the Permaculture Credit Union
Backed up with the enthusiasm and support of a group of permaculture graduates, and with the help of Manuel Abascal and Vinton Lawrence, the work of founding the Permaculture Credit Union had begun. The board of directors grew, with green architects, lawyers, investors, permaculture graduates, teachers, and homemakers joining the effort. Many more hours of meetings, of drafting and redrafting Business Plan, of sending letters to nearly 3,000 permaculture graduates to gauge their level of interest in the new institution, after submitting and resubmitting documents to the regulatory agencies – and by 2000 our group managed to complete the work and to get the state of New Mexico to license us a new credit union. We had decided that a credit union was the ideal legal form since it was a co-op structure. The newly minted Permaculture Credit Union was greeted by depositors from around the country and was on a roll!
PCU received a lot of advice and encouragement from other credit unions which was my first encounter with a non-competitive posture in business. Its first office was in another credit union’s spare rooms at an unbelievable discount! I remained on the board for another year. Phil Vergamini and Nora Haskins, permaculture graduates and activists, became very active board members at that time, and have closely worked (as volunteers) with the PCU for the next 12 years, shepherding it forward (alongside with many others talented and committed board members!)
As it got off the ground, PCU pioneered its Green Loans Program, offering financial support (in the form of lowered interest rates) to projects that met permaculture sustainability criteria: green building retrofits, green new construction, green mortgages, food forest planing loans, alternative or low-emission vehicle purchases, sustainable education loans, rainwater harvesting and solar project support.
And later, the members were delighted to see a VISA credit card with permaculture logo on it – and we kept one for the Permaculture Institute ever since, when shopping for international air travel tickets, class educational supplies and more.
Some years later, the Permaculture Credit Union had over 500 members and then was hit by the banking collapse. It was under-capitalized which meant that significant loans could not be made. In turn that meant that the credit union could not grow financially.That in turn meant not being able to provide checking account services to the members. Additionally, the interest rates plummeted and green loans were no longer competitive. The National Credit Union Administration (the supervisory body of all credit unions, nationwide) was growing concerned.
In 2013, PCU started looking for a merger partner. This search went on with the CEO, Bill Sommers, looking for a good match. Bill finally found an institution that had adequate capital, was committed to the green mission, and offered the services that our members had been asking for. This institution is the Sandia Area Federal Credit Union, in Albuquerque, NM.
Sandia CU merger brings the kind of stability that was lacking for the past 14 years. It offers to keep the original vision of members supporting members in sustainable projects and actions, but it also offers much needed services: checking, online banking, 30,000 free ATM’s nation wide, and debit and credit cards. Sandia CU will be able to support green home mortgages and land purchase loans – the services that have been put on hold by PCU due to its lack of capital assets.
Sandia CU agreed to retain PCU employees, and keep its Santa Fe, NM office open.
As the co-founder, former board member, friend and member of the Permaculture Credit Union (it offered me a very good interest rate on my strawbale home mortgage!), I think that this is an opportunity for all of us to participate in building a much larger green banking community. I am pleased that I will be able to do all my banking in a credit union that has all of the services I need.
If we are to change the financial climate in this country we have to find a way to participate in how wealth is distributed. As a co-operative organization, all credit unions are owned by their members – not stock holders, which means members have the opportunity to create the institution that best fulfills their idea of what an ethical business looks like and how it operates.