Last month I got a call from Rein Whitt-Prichette, an Albuquerque artist.  He heard about this thing called a credit union and needed information on how to start one. His vision is to have the First National Artists & Craftsmen financial cooperative. This would encompass everything from jewelers to actors to cabinetmakers to weavers. He asked if he had the right place and person.

I work at a trade association for credit unions. I’ve been in the movement for 30 years. I’ve never chartered a credit union. But, he had the right place and person. Our particular trade association was formed in 1955. Twenty years earlier Father E.J. McCarthy formed the first of many credit unions in our state. At the peak (1967) there were 141 credit unions here. Today there are 51.

I googled “How to Start a Credit Union.” The NCUA.gov page was very resourceful. I killed about 2 1/2 trees printing out the instructions and three-hold punched them into a nice big notebook. I even made a snappy cover page “How to Start a Credit Union.”

Then I met with Rein. He’s a man with a wonderful smile, and thoughtful eyes – he also looked to be on the verge of homelessness. Rein is not a hobby artist. Art is his life’s work – his job.

I googled Rein. He has pieces in the Albuquerque Art Museum. He illustrated a first edition book for the Franklin Mint. He’s an expert serigrapher. And this economy has kicked his ass. It’s hard to say how old he is, but I would venture to guess late 50s early 60s.

Rein is not pursuing this for his own interests. He has a simple list of goals:

  1. For artists and craftsmen to be recognized as business owners – not hobbyists. A bank, for instance, will make a loan to a peach farmer for next year’s crops – but not to an artist.
  2. For artists and craftsmen to have a place where they do not get charged $25.00 to receive a wire transfer (payment for a piece) and get charged $2.00 to make an ATM withdrawal.
  3. For someone to see beyond credit score (Rein does not have one – at all) and recognize the booms and busts that the art world experiences.

Before meeting with Rein I was prepared to refer him to one of our community chartered credit unions. And not in anyway to offend these open fields of membership but, let’s be perfectly honest – the chances that they will lend Rein money – no credit score and the only collateral is his art – zero.

So how about taking in the artists as a SEG with a select employer group credit union? That’s possible – but unlike the law firm, or the retail outlet or daycare centers we’re used to scooping up – artists don’t have paycheck stubs.

Then it hit me. There’s nothing to preclude them from starting a financial cooperative the good old-fashioned way. Or, as I like to call it “shoebox on a shoestring.”

Show of hands if your credit union started this way. Chances are, if you were chartered in the 1930’s your hand has to go up.

It was after the Great Depression. Credit Unions were growing at break neck speed. People with a common bond (and we are NOT talking lives works worships in a five county area) would pledge a portion of their pay to be held in a shoebox in a drawer. A ledger kept track of their shares. A credit committee, or a jury of their peers was formed.  Loans were granted based on character, capacity, and collateral. Credit scores did no exist. Losses were minimal because of the shame of non-repayment. Early credit unions were like borrowing money from your friends and co-workers – only a little less awkward.

The average credit union in the 1930’s had 187 members. Many of those credit unions are still around today – over $1 billion in assets.

The billion dollar credit union of today is largely serving the steadily employed, A+ credit, low-risk, middle market member. Banks take care of the elite, high wealth population, and payday lenders are thriving with the underserved.

In this economy the middle class is shrinking – so are the number of credit unions. Sure, many offer payday alternative loans and courtesy pay products with less than loan shark level fees. But who’s taking care of the little guy? Who’s looking out for Rein?

My new year’s resolution is to find a way to pool the resources of the art community in New Mexico. Tourists come to the Land of Enchantment for the arts (and the green chile cheeseburger). An investment in the art community is good for our entire state. We can’t afford to lose the art of Rein.

I’ll keep you posted on this journey…