For 70 years, American families have gathered to watch Frank Capra’s 1946 holiday classic, It’s A Wonderful Life. The film stars Jimmy Stewart as George Bailey, a man on the brink of suicide visited by an angel who shows him the effect his life (and the credit union he rescued and ran) had on his small town of Bedford Falls. The movie celebrates the basic value of human life and contrasts two visions of American capitalism: the virtuous cycle created by the Bailey’s Savings & Loan versus the spiral into inescapable debt caused by the unscrupulous banker, Mr. Potter. Released not long after the Great Depression, the film is unnervingly prescient in the wake of the Great Recession, a crisis sparked by so many Mr. Potters and paid for by the citizens of so many towns like Bedford Falls.
In the world where Bailey is alive to steer Bailey Savings & Loan — a credit union where neighbors underwrite each others’ mortgages and small loans — through the 1929 bank crash, Bedford Falls is a community of small businesses and homeowners. Their banker understands their needs and personal circumstances, and is rooting for their success. That’s what sets credit unions apart from banks headquartered in New York, London, or Geneva, far from their clients.
In credit unions, historically centered around a common location or profession, lenders live close to and know their clients. The bank also isn’t speculating with depositors’ savings, but instead lending it back directly to the same community. Everyone is invested, literally, in their neighbors’ futures.
In the alternative world — where the good banker George Bailey wasn’t around to preserve the credit union — Potter steps in, buying up mortgages with short-term incentives when the townsfolk were most vulnerable. In many ways, this is not unlike big banks offering exploitative mortgage refinance deals or unscrupulous adjustable-rate mortgages.
The result, meant to be nightmarish in 1946, is one Americans will find eerily familiar today. A distant banker lets houses fall into foreclosure while main street shops close due to lack of credit, and small town communities fall together into poverty instead of lifting each other up. Everyone becomes a permanent renter with little hope of ever working off their debts.
Even worse, in 2016, many citizens can’t even get access to mainstream banks even if they are willing to pay double-digit credit card interest. More and more hardworking individuals in non-urban communities are denied access to the banking system and checking accounts, leaving vast “bank deserts” at the mercy of payday lenders and loan sharks. Nothing makes it harder to work your way out of poverty than not having a safe, regulated institution in which to save your money.
If you support the kind of honest capitalism with knowledge about communities and a stake in their account holders’ success, embodied by Bailey instead of the grim profit-taking of Potter, consider supporting a community credit union.
Take, for example, Hope Credit Union, which was begun in 1995 by Aspen Global Leadership Network Fellow Bill Bynum. In the Mississippi Delta region, HOPE is as far from a Wall Street bank as Utica, Mississippi, where it began.
HOPE was there to rebuild after Hurricane Katrina, and has provided an alternative to the payday lenders eager to exploit the unbanked. HOPE provides access to credit and financial services to people in their communities who dream of opening a business, owning a home or sending their children to college. There are many other resurgent organizations like it throughout America. You don’t have to give people the moon, you just have to give them a chance.
Johnny McNulty is the communications director for the McNulty Foundation. He is a writer living in New York, former editor of Someecards, and a contributor to The Onion.
Hope Credit Union and its founder Bill Bynum are recipients of the John P. McNulty Prize. The McNulty Prize celebrates the boldness and impact of individuals who are using their exceptional leadership abilities, entrepreneurial spirit and private sector talents to address the world’s toughest challenges.