View source for Alex Pentland's Vision for Credit Unions as Vehicles for Data Cooperatives


=Discussion=

by Leo Sammallahti, Coop Exchange:
 
"The current data economy is based on apathetic approval - everyone clicking on “I Accept The Terms And Conditions” without reading them, let alone bargaining for better terms and conditions. However, a small movement spearheaded by the MIT professor Alex Pentland has another idea on how things could work. Pentland is one of the most cited computer scientists in the world and played a key role in the introduction of GDPR, an EU regulation that has been dubbed the “greatest shake-up of privacy legislation in more than 20 years”. According to Alex, the answer lies in cooperative ownership of data, and the force best positioned to bring this change is the credit union movement. The first chapter of this article seeks to describe the vision laid out by Pentland and his colleagues at MIT, while the second chapter provides some new ideas on how it could foster a further shift towards an economic system where cooperatives would play a more prominent part.


Credit unions are not conventional corporations, they are consumer owned cooperatives. This means that they are fully owned by their members, in this case, ordinary customers who deposit or lend money from a credit union. The members share the profits and elect the board of directors on a one-member-one-vote basis, and the membership has been booming for generations, growing from 6 million in the late 1960s to 120 million members by 2019.

In Pentland’s vision, credit unions would offer their members an opportunity to join a “data cooperative” where you would pool data together with others to collectively bargain for better terms and conditions on how your data is used. He explains:

''- “What we discovered, and I have a bunch of lawyers that are part of my group, is that there are certain sorts of cooperatives which are licensed by law, to manage peoples’ data. Just by accident in the US, credit unions are licensed to handle your digital data, which is basically everything about you. They can act as your legal representatives. They don’t own your data, they host it. They could for instance, and we built software for this, have you just check a little box, and your credit union would download all your data.”''

While an usual customer might not notice much difference from a conventional bank, except the slightly better rates, credit unions differ from corporations in fundamental ways due to being cooperative legal entities. This has implications when it comes to matters like customer data because credit unions have a legally binding fiduciary duty to protect the rights and act in the interest of their members instead of investors whose interests might differ from those of customers."
(https://coop.exchange/blog/e1803df3-0e40-11eb-b74d-06ceb0bf34bd/one-of-the-world-s-most-cited-computer-scientists-wants-cooperatives-to-be-the-future-of-how-data-is-owned?)

[[Category:Open Data]]
[[Category:Big Data]]
[[Category:Commons Economics]]
[[Category:P2P Law]]
[[Category:Cooperatives]]