The revelation of Wells Fargo’s opening of more than two million bogus accounts has dominated the headlines for a week now. The scandal has led to more than 5,300 employee firings, and bank CEO John Stumpf apologized in an appearance before the Senate Banking Committee today.
Meanwhile, the CEO of Coastal Federal Credit Union is making a statement of his own. The memo from Chuck Purvis, released to staff at the Raleigh-based financial institution late Monday, underscores perfectly the clear contrast between the member-owned, not-for-profit cooperative structure versus a for-profit, investor owned institution like Wells. Purvis opens by putting his finger on the cause of the Wells scandal. “It’s certainly disheartening to witness an institution squander away the trust of so many people,” Purvis wrote He added, “it’s more disheartening to know that it’s the result of a sales culture that puts more emphasis on hitting sales targets than it does on being ethical and helping people succeed.”
He goes on to praise the work of the Coastal team by staying true to their purpose, and maintaining a commitment to the cooperative difference. “As you’ve heard me say many times, we should first approach each interaction as a chance to help someone buy a house, or a car, or to save for their future, and then as an opportunity to share with them the products and services that are right for their situation,” (emphasis mine).
That “help someone” approach really gets to the heart of the cooperative purpose and structure. After all, what is the value of purposefully harming any customer — let alone the very people who own the business?
This is not to say that all for-profits are bad and all cooperatives are good. Each individual business, no matter its structure, is only as ethical as the people managing it in the day-to-day.
Purvis points this out clearly. “It’s not our superior products and services that keep something like this from happening at Coastal,” he writes. “It’s not even our cooperative, member-owned structure that does. It’s our focus on putting our members’ needs first.”
As Wells largely faults lower level employees for the scandal that has enveloped the bank, that ethical ownership of the Coastal brand is another key difference that stands out in Purvis’s memo. “It’s important to perform well in our jobs and as an organization,” he concludes, “but if we’re ever tempted to abandon our own integrity to do so, it would be an abysmal failure of my leadership.”