Jason Fletcher, his wife, and his three sons live in Akron, Ohio. In many ways, Jason’s life looks a lot like what you’d expect for a middle-class guy living in the Midwest. Jason and his sons are active in the Boy Scouts. He and his wife help take care of his elderly mother, who lives with them. Jason has worked at three different banks in the last ten years, mostly in customer service roles. He now works from home, which he likes.
But Fletcher is different from a typical American in one interesting way: he’s trying to start a credit union. The financial crisis and Occupy Wall Street drove new interest in credit unions, which are cooperative, non-profit alternatives to banks, the “customers” of which are both members and owners of it.
Belonging to a credit union can have its advantages; notably, its members sometimes get better deals on financial products than they’d find at a traditional bank, since members’ money doesn’t get siphoned off to pay dividends to investors or to pay corporate taxes. And yet, the number of nationally chartered credit unions in the United States is shrinking. According to data from the National Credit Union Administration, we lost about 900 credit unions from 2014 to 2018, and, as reported in the Credit Union Journal, only a few new credit unions form each year.
The first credit union in the United States opened in 1901, but globally, the idea of a non-profit financial cooperative dates back to at least the 1850s. Most credit unions are formed by preexisting communities who feel they’re underserved by existing banks and credit unions — like the farmers and fishermen in Maine who think the state’s food producers need more access to credit, the black Minneapolitans hoping to spark a financial renaissance in their city’s northside, or the New York City cops who feel they needed financial products more closely tailored to their line of work.
Another notable thing about Fletcher is his spiritual practice: He’s Pagan. Paganism as a modern religious movement can be viewed as umbrella term covering various spiritual traditions including Wicca, Shamanism, Ceremonial Magick, as well as practices descended from or inspired by pre-Christian European, African, and American faiths. More so than most other religions practiced in the U.S., Paganism has no central hierarchy or overarching dogma, and instead tends to stress that each person has the burden of developing their own spiritual beliefs and ethics. Fletcher, along with Lawrence Lerner, a tech consultant and Wiccan priest based in Seattle, Washington, and Beth Lafierre, who farms and sells botanical products in West Virginia, make up the volunteer steering committee of the Pagan Credit Union (PCU) Project.
“When it comes to our finances [Pagans] don’t always have the best track record. There’s kind of a transient aspect to our culture,” Fletcher said. “People [need] to get financing for projects that they might not get from a traditional bank. If someone wanted to finance a temple for example, a traditional bank would probably laugh you right out of the door — but a Pagan credit union wouldn’t.”
Bill Genzoli, a 47-year-old network security specialist who has been following the Pagan Credit Union Project with interest, explained to me that he first thought about the need for a Pagan Credit Union more than a decade ago, when Oberon Zell, a well-known religious leader in the Pagan community, sought funding to build a sacred space. According to Genzoli, Zell envisioned a place where many Pagans could own land collectively, perhaps building their homes on shared acreage. Genzoli says when that project couldn’t get the funding it needed, it was a wake-up call that the community should pool their resources together for a credit union. (Fletcher, whom I spoke to separately, also said Zell had sparked his interest in a credit union for Pagans. Despite reaching out by phone and Facebook, my efforts to contact Zell to get the exact details of his story were unsuccessful.)
Banking “is still a very conservative industry,” Fletcher’s fellow co-founder Beth Lafierre said, adding that she aspired to create a financial institution with fewer “judgmental attitudes.” The PCU, which hopes to set up its headquarters somewhere in Washington State, plans to differ from many financial institutions in a few ways: to be respectful of polyamorous families, consistent in using members’ correct pronouns, and accommodating of what Pagans sometimes call “craft names” — a name that’s either chosen by a Pagan or given to them by a member of their community with some personal or spiritual significance. The PCU notes that while some bank documentation would have to use members’ legal names, bank tellers and representatives could be given instructions to use craft or preferred names in conversation.
While Paganism draws on many ancient spiritual traditions, the federal government only formally recognized its status as a religion after the 1986 court case Dettmer v. Landon, where the United States Fourth Circuit Court of Appeals ruled that Herbert Dettmer, a Wiccan inmate at the Powhatan Correctional Center, needed to be given reasonable access to the candles, incense, salt and robe he used for his religious practice, saying in their decision, “the doctrine taught by the Church of Wicca is a religion.” In certain ways, Paganism has had a major influence on American society, with a cultural reach that extends well beyond those who would identify Paganism or Wicca as their religion. The Wing, a high-profile women’s club that has counted as its guests people like Hillary Clinton and Jennifer Lawrence, calls itself a coven. The writer Doreen St. Felix declared in a 2017 piece for The New Yorker that, “the feminine occult has taken hold in the public square. Women, especially, are communing around the witch figure and her ability to counter male dominance.”
As a queer woman in a major coastal city who was once on Tinder, I can attest that the median number of mentions of Pagan, Wicca or related customs in a gay woman’s online dating profile is quite high. However, despite Paganism’s its broad-reaching cultural influence, there are still a number of practitioners who view their religion’s place in our country as precarious, and worry that they’ll face confusion or blatant discrimination when they try to explain their families or businesses to a typical credit union or bank.
The financial system, of course, can be unkind if not hostile to those who are not high-earning, salaried employees of established companies with perfect credit scores. The New York Times has reported it can be “difficult if not impossible” to get a mortgage if you’re self-employed but have been in your line of work for less than two years. Many small business loans require your business to have already have earned tens or hundreds of thousands of dollars of revenue.
To some extent, these obstacles aren’t surprising: a bank could go under if it takes too many risks, and in the aftermath of the last recession, new laws and regulations were written to prevent banks from lending to people who might have a hard time paying back a loan.
But these more general challenges can be compounded when you self-identify as a witch. A Pagan Credit Union wouldn't necessarily be able to relax lending standards, but at least it could evaluate a loan disregarding the fact that $40,000 of your income comes from an energy healing center.
A pamphlet the PCU team is sharing with prospective members reads, “our values may differ from the mainstream, but our mundane needs are similar.” It’s meeting those mundane needs — giving folks an opportunity to have checking and savings accounts, pay their bills online, and learn the basics of personal finance — that the PCU is focused on. “Let’s walk before we run,” Lerner said.
Bill Genzoli put it this way when we spoke by phone: “There are parts of my life that can be construed as tree-hugging hippie, and, you know, there’s a lot worse things to be called. But I still have a 401K and stock options; I need a financial institution that can understand that, while at the same time allowing for a more spiritually-inclined set of [values].” If I was hoping to find “disruptors” trying turn banking upside-down, these weren’t the people I should’ve been talking to.
With all that’s happened in America over the last two decades, the need for alternatives to the existing financial system should be obvious. However, the government makes incredibly challenging for those outside the banking industry to establish credit unions.
To get started, the PCU will eventually need a federal charter from the National Credit Union Administration (NCUA), which will formally establish it under NCUA’s regulatory supervision; so far, the PCU’s interaction with the NCUA has been limited but positive. The NCUA’s relationship with other groups, like the Internet Archive Credit Union, have been far more strained.
Brewster Kahle is the founder of the Internet Archive, best known for the Wayback Machine, which you’ve probably used if you’ve ever tried to find something on the Internet that used to exist. In 2011, he started the Internet Archive Federal Credit Union with ambitious intent. Before the nascent credit union had settled on a name, Jordan Modell, who would become CEO of the IAFCU explained their mission: “to restore fairness to the financial system, start a workplace where your job is contingent on your work not office politics, and provide jobs across America.” However, Kahle and Modell were not terribly specific about what they expected to do differently than other credit unions. The most important planned difference between the IAFCU and a typical credit union was its intention to be “the Linux” of credit unions: transparent and quasi-open-source in its approach in the hope that future credit unions could follow in its footsteps, learning from its failures while easily emulating its successes.
Despite these national ambitions, the actual charter the IAFCU received in 2012 from the National Credit Union Administration gave it permission to serve a much more bounded community: the largely immigrant, low-income residents of New Brunswick and Highland Park, New Jersey. But rather than starting small and focusing on meeting the needs of this community, the IAFCU was continuously distracted by a desire to lend to cryptocurrency companies and to offer financial products that were riskier or more complex than what the NCUA normally permits for new credit unions. Though the credit union ultimately grew to a few hundred members, the NCUA served the IAFCU with a cease-and-desist notice in November 2015, citing the nascent credit union’s “unwillingness” to operate within its field of membership, as well as its failure to establish adequate controls that would prevent its customers from potentially laundering money or financing terrorist organizations. The next month, Kahle announced at the Future of Technology and Money Summit that the board of the Internet Archive Federal Credit Union had voted to voluntarily liquidate, accusing the NCUA’s regulations of “crush[ing] this credit union.”
Though Kahle criticized the NCUA for creating what he viewed as an unreasonably difficult regulatory burden, it’s obviously not literally impossible to start a new credit union. Finest Federal Credit Union, which opened its doors in 2015 and caters to New York City police officers, currently has nearly 5,000 members. As reported in the Credit Union Times, in its first six months after opening, Finest FCU gave out over $1.8 million dollars in loans, all of which were under $5,000, the limit that the NCUA imposes on new credit unions, the same limit that Kahle had said was too restrictive either to adequately serve IAFCU’s members or allow the credit union to make enough money to stay afloat.
Part of the conflict between the IAFCU and the NCUA came from disagreements over what’s called a “field of membership.” If you start a credit union, you need to specify who your members are going to be in clear and discrete terms. The IAFCU wanted to serve everyone who was pissed off at Wall Street; the NCUA wanted it to serve everyone who lived in the New Brunswick and Highland Park. In this battle of wills, the IAFCU lost. While there’s still some flexibility in credit union charters — anyone can join Chicago’s Alliant Credit Union if they “support” the charity Foster Care To Success by agreeing to have Alliant Credit Union donate $5 on their behalf, for example — playing fast and loose with common bond rules can get credit unions in trouble. In Miami, North Dade Community Development Credit Union received a cease-and-desist order and was eventually shut down by the NCUA, in part, for failing to verify that its members met the field of membership criteria. The Air Force Federal Credit Union has been cited for violating field of membership rules as well. In 2013, the NCUA issued a statement warning credit unions not to get too loosey-goosey with marketing implying that they’re “open to everyone.” Such marketing was “deceptive,” the association said, given the field-of-membership rules. The statement also highlighted the range of enforcement actions it would take against credit unions it felt were either misleading the public or making it too easy for people without a true common bond to join.
The Pagan Credit Union may very well have a built-in advantage when it comes to defining its field of membership. Its founders are actively involved in a faith community that shares a common bond, and there are already religion-focused credit unions serving groups such as Mormons, Shia Muslims, and Catholics. The “field of membership” rules mean that the Pagan Credit Union will have to partner with Pagan churches, circles, groves, groups, or covens that maintain membership lists, rather than being able to admit anyone with Pagan beliefs. As Lerner pointed out by phone, the overall Pagan community, which he pegged at around 1.5 million people, a population estimate slightly higher than what the Pew Research Center has forecast, is a “really good size” to form a field of membership. Lawrence added, “even if we start out with one percent of that and grow over time,” the PCU would have enough members to be successful.
But as Dr. Marty Laubach points out, lots of Pagans don’t formally belong to any Pagan churches, meaning those “field of membership” rules could end up hampering the success of the PCU. Laubach, a professor of sociology at Marshall University who researches religious experience, is a part of the Covenant of Unitarian Universalist Pagans, and he’s signed onto PCU’s list of people interested in becoming members of the credit union. According to his estimates, half or more of U.S. Pagans are “solitaries” — either they occasionally go to events or festivals hosted by organized Pagan groups but don’t consider themselves members, or they practice completely on their own. Pagans may be solitary for different reasons. For some people, it’s just how they most naturally connect with what they consider Divine, while others may still feel the sting of the Satanic Panic of the 1980s, 1990s and early 2000s, when Jesse Helms was campaigning for Pagans and Wiccans to lose tax-exempt status, and when Pagan beliefs could mean losing your children in a custody battle.
The more Pagans are perceived as an “established” religion, Laubach said, the less vulnerable they’ll be to attacks on their first amendment rights, and the more freely they’ll be able to practice their faith. Setting up a credit union that unifies various Pagan-affiliated groups is a way of solidifying the broader cultural standing of a faith community that embraces people’s LGBTQ identities and recognizes women as clergy, in an era in which many U.S. churches still ostracize queer people or endorse a subordinate role for women.
Ironically, as Laubach pointed out, a lot of “solitary” Pagans would probably be more willing to formally sign on to a membership at a Pagan credit union than they would be to sign on to a formal membership at a Pagan congregation, but the “field of membership” rules don’t really permit things to work in that order: there’s a good shot the PCU will have to turn away people who would like to join but who don’t belong to a participating church or group.
In a perfect America, we might all be free to start non-profit financial institutions that serve anyone in who wants to join, instead of a limited group with a pre-existing connection. A credit union that’s able to attract huge donations might be able to grant big loans from the start, assuming it has enough in donations that members deposits aren’t at risk. A credit unions might not have to start small, with limited ambitions.
Big banks have put their weight into protecting the status quo by creating a regulatory environment in which it’s hard for credit unions to get started and to grow. For years, the American Banker Association (ABA), a trade organization whose board includes representatives of JPMorgan Chase and Bank of America, has been in litigation with the NCUA over the field of membership rules. The NCUA wants to let credit unions count much larger geographic areas as their field of membership than current regulations allow, but in 2016, the American Banker Association sued to prevent that from happening, effectively arguing that if non-profit credit unions ceased to be niche institutions, they’d no longer be competing on a “level playing field” with for-profit banks.
In August of this year, the U.S. Court of Appeals ruled primarily in the NCUA’s favor, letting the agency move forward in giving out wider charters to credit unions; after that decision, the American Banker Association issued a statement saying it was determining its “next steps,” suggesting that this three-year-long battle may not be over. The ABA lawsuit is just one example of banks fighting for heavier regulation of credit unions. More broadly, it’s easy to argue that the increased oversight of financial institutions, especially post-financial-crisis, ultimately played into big banks’ hands, by creating barriers for new entrants and making it harder for small banks and credit unions to compete.
Beyond such regulations themselves, a range of pressures is causing the number of chartered credit unions in the U.S. to shrink; there are clear economies of scale when it comes to offering things like online banking, user-friendly mobile apps, and 24/7 call centers. In other ways, though, credit unions are clearly having a heyday. We have a smaller number of them, but the ones that remain are much bigger — since 2007, NCUA-insured credit unions have doubled their assets, from about $700 million to $1.5 trillion, a rate of growth that is twice as high as FDIC-insured banks over the same time period.
Ultimately, the Pagan Credit Union represents a set of very real tensions at play in modern finance. One is the clash between our society’s desire to let people develop real alternatives to existing financial institutions, and the government's mix of legitimate and illegitimate fears about what will happen if banking is done by a large number of experimental entities, rather than being primarily done by a small number of massive corporations. There’s the tension between Utopian visions for society, in which we live in harmony with all living beings, engaging in creative expression and spiritual exploration, and the mundane demands of life, like where we’re supposed to keep our money while we’re doing that stuff. Finally, there’s the question of whether we can effectively resist institutions of totalitarianism and monopoly capitalism through the creation of different institutions, with their own hierarchies and sets of rules.
To succeed at getting off the ground, the Pagan Credit Union really just needs three things: (1) enough money to get started, which will probably be at least a few hundred thousand dollars, (2) a well-defined group of people enthusiastic enough to move their business over from other banks or credit unions, and (3) management competent enough to set up operations correctly. The push by Lerner, Lafierre, Fletcher and others to start the Pagan Credit Union is coming at what is perhaps both a critical juncture for the community and a moment ideally suited for their group to meet all three conditions. The fact that Paganism is now a reasonably large movement — but still one that is worried about how “mainstream” institutions will view it — suggests that a unique credit union will likely be able to attract a sufficient base of members to thrive.
Credit unions reflect a “little c” version of community, in which a group of humans doesn't just share general political or ideological principles, but are actually connected in some concrete and literal sense. That certainly comports well with the pluralism of the Pagan ethos, and the common Pagan belief that each person can form a direct bond with the divine. Credit unions, where each member gets one vote, remain appealing for those who believe in the power of community, in the value of consensus, and in the joys of egalitarianism. As to whether credit unions can successfully disrupt banking as we know it? Perhaps that's only possible with a little magic(k).
