At the opening of the Connecticut Feminist Federal Credit Union in August 1974, 24-year-old Dawn Ladd used a bolt cutter to snap a five-foot-long steel chain. Ladd, the credit union’s president, explained that she was symbolically “breaking the economic chains” that tie women down. Susan Osborne, 26 and a cofounder of the credit union, spoke to reporters about the group’s mission: “Our answer to this continuing discrimination is to create our own credit institution, a credit union where we can save money together and where we lend our money, to each other.”
Forty-six years later, Osborne repeated her message to me: “It’s not just enough to have the will or the need, you actually need the resources.”
In the 1970s, feminist federal credit unions tried to bypass sexist financial institutions by supporting women’s economic decisions and funding women’s businesses. Today, amid the Covid-19 pandemic, women- and minority-owned businesses are still contending with unequal access to credit. In the absence of strong regulatory measures under the Trump administration, the feminist credit union movement can again be a model for activists and businesses unwilling to wait for the government to enforce its anti-discrimination laws.
Throughout the women’s liberation movement, activists often split into two categories: a mainstream willing to push for legislation, like the Equal Rights Amendment, and a vanguard that believed legislative reform was not enough to change culture. Women’s health activists, for instance, embraced “self help,” the idea that women could be their own gynecologists and, if necessary, perform their own abortions. That do-it-ourselves attitude was at its height in 1972 in Detroit when Joanne Parrent and Valerie Angers met at the church-basement meetings of the Women’s Liberation Coalition of Michigan.
“We had come out of groups in college working to protest the war,” Parrent recalled over the phone from her home in Los Angeles. At the Women’s Liberation Coalition, she and other feminists gathered for National Organization for Women (NOW) meetings, operated a phone line for women seeking an abortion, and organized consciousness-raising groups, meetings where women gathered to discuss the root political causes behind their personal struggles. It was at those meetings that Parrent noticed women frequently talking about not having access to credit, especially when going through a divorce.
Until the Equal Credit Opportunity Act of 1974, most banks required a woman to present a male cosigner—usually her father if she was single and her husband if she was married. Bank officers also frequently asked women about their reproductive plans to determine if they were eligible for a loan.
“Growing up in that time period, all of us, particularly in Detroit, we all needed autos to get around, and none of us could get an automobile without a father or a husband or an older brother or someone cosigning for us,” Parrent told me.
So, with a few other members of the Women’s Liberation Coalition of Michigan, Parrent and Angers launched the Detroit Feminist Federal Credit Union in 1973. “I remembered reading at the time of how credit unions were the best because they were membership supported,” Parrent said. To join the Detroit FFCU, women had to be members of an affiliated feminist organization, like NOW or the National Black Feminist Organization. “Detroit is a big labor town, and credit unions are also sort of pretty allied with the labor movement and so we joined the Michigan Credit Union League.”
In its first week, 75 women joined the Detroit FFCU. By 1979, it would have 3,100 members. Within feminist circles, word of the credit union experiment in Detroit began to circulate, and Osborne was just one of many who read about the Detroit FFCU. At the time, Osborne, like many of her friends, was young, single, and not yet earning much. “I just really couldn’t get access to credit, and it wasn’t because I’d done anything wrong,” she said. “I felt financially disenfranchised.”
So, in 1974, Osborne brought the idea of a credit union to the attention of her feminist colleagues in Connecticut. Two years later, there would be 18 feminist credit unions in the United States and Canada, controlling assets of over $3 million. (The last, located in Dallas remained open until 2013.)
At both the Detroit and Connecticut FFCUs, members lent to women who needed help making large household purchases, like cars or washing machines. They also tried to teach financial literacy to women who had never been allowed to manage money before. “This was less about idealism and more about solving immediate ongoing problems that women had at that time,” Osborne said. “What we were financing was not luxury items. It was basic needs that women had and really couldn’t get at the time with the kinds of livelihoods they had.”
Some of those needs took on a political nature as the credit unions lent women the money for divorce attorney fees or abortions. “Those kinds of decisions, particularly in that day, were ones that we wanted to support,” Osborne said.
By the early 1980s, the credit union movement was losing momentum. In 1976, members of the Detroit FFCU, now working as the Feminist Economic Network, had leveraged $252,000 to buy what would become the Feminist Women’s City Club, but they couldn’t keep up with the loan payments. Across the movement, credit unions had prioritized trusting women over assessing whether individual women were credit risks, and many of their loans were not paid back.
But reflecting on their work nearly 50 years later, Ladd and Osborne felt like they had succeeded in catalyzing the movement for equal credit. “This was the beginning of a whirlwind—and the whirlwind was equal rights,” Osborne said. “By the time we decided to close the credit union, it was because the whirlwind that had happened was so effective at clearing some of the immediate problems that we’d gone on to other problems.”
Although the credit unions began disbanding in the 1980s, “they did change culture. We did get more women’s voices in publishing, we did get more feminist books, and more diversity of ideas than we had before,” said Debra Michals, director of the women’s and gender studies program at Merrimack College and author of the forthcoming She’s the Boss: The Rise of Women’s Entrepreneurship since World War II.
“Feminist credit unions wanted to create a separate female/feminist culture in which they would use the banks to fund feminist bookstores and daycare centers and publishing companies and all kinds of health centers and art buildings and all kinds of things that would never have been funded under traditional lending practices,” added Michals.
The Feminist Women’s City Club was intended to be one of those spaces—at the time it was hailed as the largest “womanspace” in the country. Elsewhere, FFCUs funded the burgeoning feminist bookstore movement: In Oakland, the Bay Area Feminist Federal Credit Union loaned Carol Wilson money to open Mama Bears, and in Boston, New Words: A Woman’s Bookstore borrowed from the Massachusetts Feminist Federal Credit Union.
Michals said she can “imagine a world today in which feminist credit unions still exist” and are popular among women who want to put their money where their politics are. Although the women’s liberation movement codified measures to ensure equal access to credit, the enforcement of those laws is an ongoing battle. The feminist credit union movement, like other feminist self-help movements, is a reminder of times when women organized to support one another without the support of the law.
After the 2008 financial crisis and the ensuing Dodd-Frank reforms, the Consumer Financial Protection Bureau amended the Equal Credit Opportunity Act to require that the agency collect data about loans to women- and minority-owned businesses. At the time, Elizabeth Warren, then a professor at Harvard Law School and chair of the Congressional Oversight Panel, was studying household debt and bankruptcy and leading the effort to design the Consumer Financial Protection Bureau. In 2011, she told Congress that data collection would “facilitate enforcement of fair lending laws” and “identify business and community development needs.” That focus on fair lending was especially relevant because many minority- and women-owned businesses had disappeared during the Great Recession. The Census Bureau found that 60 percent of white-owned businesses and 61 percent of male-owned business that existed in 2002 “survived” until 2011, compared to 49 percent of Black-owned businesses and 55 percent of women-owned businesses.
But in 2018, then–Acting CFPB Director Mick Mulvaney had the bureau stop gathering that information. Reacting to the Republican Party’s 2016 platform calling the CFPB a “rogue agency” and demanding its abolition, Mulvaney began dismantling the bureau: dissolving the student-loan ombudsman’s office and easing up on lawsuits against payday lenders.
“The lack of lending data hampers CFPB’s and other financial regulators’ ability to investigate and oversee compliance with the Equal Credit Opportunity Act, the Community Reinvestment Act, and other federal laws that seek to curb discriminatory lending practices,” said Charisma Troiano, communications director at Democracy Forward, a nonprofit legal organization focused on corruption in the executive branch. “It stymies efforts of advocacy groups to file complaints with the CFPB or work with state and local governments to enact policies to improve lending practices.… And it makes it harder for community development organizations to target the communities that are most affected by credit deserts or outright discrimination.”
Last year, Democracy Forward sued the CFPB on behalf of the California Reinvestment Coalition, an advocacy group focused on economic justice for communities of color and low income communities. This February, the CFPB agreed to a settlement: By September of this year, it would publish its proposals for collecting data on the diversity of lending practices. Even with the pandemic, Troiano told me the deadlines remains in effect. Still, Covid-19 makes clear why data collection should have been prioritized long before this global health crisis.
After the federal government distributed Paycheck Protection Program loans at the beginning of the pandemic, Senator Kamala Harris said on Good Morning America that “90 percent of minority- and women-owned businesses, small businesses, did not get access to the PPP.” Smaller industry surveys have found that only 12 percent of Black and Latino business owners received the funds they requested and that nearly a quarter of female business owners were not able to apply to the program. The structure of the PPP gave preferential treatment to businesses that had preexisting relationships with banks, more employees, and greater access to capital—all factors that favored white- and male-owned businesses. Further, the Brookings Institution has noted that women-owned businesses are likely suffering more from the pandemic because they often exist in industries that cannot practice social distancing—like retail, food service, and accommodation (think salons, laundromats, spas, and gyms). Others have also pointed out that female business owners face additional challenges complicated by the pandemic—like procuring child care.
“There are serious concerns that women and entrepreneurs of color who face hurdles accessing credit even in normal times are being overlooked as they weather the coronavirus pandemic,” said Troiano. But without CFPB data, there’s no way to know for certain.
The early months of the pandemic saw a proliferation of mutual aid networks that followed a mission similar to the feminist federal credit unions of the 1970s: self-help. In the absence of government leadership, communities began organizing to share resources like masks, food, and money. Mutual aid networks have kept expanding at Black Lives Matter demonstrations, where community medics assess injuries, volunteers distribute hand sanitizer, chefs supply meals, and bikers direct traffic. The FFCUs offer a model for a new mutual aid movement that might seek to support minority- and women-owned businesses with loans when government help falls short.
When we spoke over Zoom, Osborne at her Colorado home and Ladd in the studio of her Brooklyn business Aurora Lampworks, the two had not seen each other in decades. Exclaiming first in joy at seeing each other’s faces, they quickly switched to the subject on everyone’s minds: how they were persevering through the pandemic. Then, they turned to me, the young woman in the room, suggesting that the coronavirus could be an opportunity to reform old systems. “This is a time when we can begin to imagine new opportunities,” Osborne said. “It creates a whole new canvas to paint on, in many new ways. And I, for one, am ready to throw out the old canvas.”