Chip Filson
The Seated Boxer, an iconic ancient Greek work of art, shows a grizzled veteran of the ring, equal parts resigned and ready to spring into action.
What I like is a sense of respite from competition, the powerful athletic physique and the tiredness that surrounds his humanity. Is he a winner this day? Are there more fights to go? How will his efforts be remembered?
These are questions that all of us encounter, in literal or figurative ways, in our daily efforts.
The video series He Gets Us relies on multiple methods to communicate a vision of common humanity in an era of cultural turbulence.
It was funded by a group of Christian business leaders who were concerned about the relevance of spiritual values in a time when even religious communities have become part of the current impulse to take sides on every topic.
The videos push against this social divisiveness. Several were among the most watched ads from the last two Super Bowls, an effort that some felt was not the best use of funds.
They are intended to be a conversation starter. To build a bridge to a culture increasingly dubious about the role of spiritual values in contemporary life.
The group’s longer first-person, authentic life stories are memorable. This five-minute video is an example of a mother and her family’s unconditional love. Most of us have had the good fortune to experience this relationship as either a child or as parents. But perhaps not with the burdens this family encountered.
The video suggests our lives are not just a series of insulated, unrelated events. Human stories reveal deep truths which we may know only in part. They sometimes “speak” to us outside our conscious awareness.
The mother’s story shows a life of purpose a goal for which many aspire. She tells of learning the necessity of humility, “how to set aside everything we know to honor, respect and love another human being.”
In doing so, it suggests all are part of the great human cosmic enterprise. Life comes full circle for everyone. This narrative expresses the belief that we live in a world grounded in shared meaning.
(https://www.youtube.com/watch?v=cl2fxQH50_8&t=225s)
This is a credit union’s story of caring for a member whose life has come full circle. You can read The Rest of the Story here.
(https://www.youtube.com/watch?v=0PXPcuGnAkc&t=31s)
On Monday I introduced the video series, He Gets Us. They were created by a group portraying the relevance of spiritual life today. The work presents pictures of our common humanity.
I believe these videos are works of art. They have the power to evoke an epiphany. We may not know the full wisdom being offered. But one can feel the experience connecting with something inside you.
My hope is to inspire an appraisal of today’s coop messaging. The goal is to move beyond the headlines and priorities of the current moment to rediscover the passions that made the industry a movement.
Today’s selections begin with what seems a simple task, asking nonnative speakers what are most difficult sounds for them to pronounce in English.
But then each person acknowledges the real question is about the words we find the hardest to say emotionally in human interaction. In any language. This short introduction is the source for five longer personal stories from each.
(https://www.youtube.com/watch?v=Whm_-aL9HmI&t=18s)
The final speaker is from Finland. The words he found hardest to say emotionally arose in very difficult circumstances.
They were: “I love you.” Saying them makes us vulnerable. A phrase repeated often by rote but still changes lives when stated.
His story sketches the growth in his understanding of this universal expression that enriches all human relationships. It begins with a trigger warning.
(https://www.youtube.com/watch?v=gWplgR3t_Ck&t=1s)
Communication transforms when it touches a person’s emotions. It transcends the moment. It becomes art. It helps us see beyond what we knew before.
The most difficult challenge for any organization is telling anyone why they should be interested in joining with you.
Messaging is more than competing for our attention with a product commercial or a clever brand. Ultimately, it must appeal to something inside. It should make us care.
He Gets Us is a video campaign that attempts to represent the “greatest love story ever told.” It suggests the relevance of christen belief in today’s context of religious decline or misuse.
This creative group states its purpose as follows:
We’ve done a lot of homework on our culture. We researched how people feel about each other and what they think about Jesus and Christianity. We’ve connected with thousands of people of various faith traditions and those who claim no religion. We spoke to all kinds of people — different backgrounds, beliefs, and, yes, political affiliations.
And this is what we’ve learned: From politics to sexuality and religion, so many of us feel like our values, beliefs, and identities are under attack by the ideological “others” around us. Many perceive those who differ with them on issues of justice, dignity, and humanity as not just wrong or misguided but also as evil. As enemies. We often see these “others” as close-minded, selfish, hypocritical — and if we’re honest, many of us respond in kind.
This week I will share several of the group’s “presentations” which look and are sometimes presented as commercials. But they are much more. They help us see, to understand more than we did before watching them.
What do these “messages” have to do with credit unions? To be seen as relevant in today’s crowded social media is the same challenge credit unions confront. There are a number of organizational parallels.
The participation trend lines in most religious denominations are trending down. Smaller churches are closing. Larger ones are greying. Sunday or Saturday “sabbath” is a time for family errands, fun outings and preparation for the week ahead-not participating in a community of shared purpose. Society’s divisions are mirrored in our religious practice as presented in the group’s purpose:
The more ideologically defensive we become, the more we are willing to sacrifice things like kindness, patience, and the respect and dignity of others for the sake of victory — the righteous ends justifying the dehumanizing means. And it’s tearing us apart. We experience it in politics, in the workplace, in schools, and even in churches. And at the heart of the conflicts is a fundamental disagreement about what it means to be good.
Credit unions and churches no longer seem central to many persons’ lives. Our basic needs and core values, “to be good,” are fulfilled in other ways and commitments.
The He Gets Us videos try to show the relevance of lessons from generations ago for real people today.
My hope is to inspire rethinking for today’s coop messages. We need to move beyond the headlines and priorities of our current moment and rediscover the energy that made the industry a movement, an alternative to the status quo and rediscover who we can aspire to become.
A hot button topic when people are polled about public issues for political campaigns is the flow of migrates to America.
The one-minute video, Refugee, presents this ongoing human circumstance with a specific context.
(https://hegetsus.com/en/featured-videos/refugee)
What I found equally compelling is the producer’s five-minute story telling how this video was assembled. The making of the Refugee video:
(https://hegetsus.com/en/featured-videos/the-making-of-refugee)
Does this message open one to a different way of seeing this issue? Does it stay with you after viewing? Does this human-centered perspective suggest a parallel in your credit union’s role?
If you were ever curious about the difference between a state and federal credit union regulatory environment, the open public meeting of the North Carolina Credit Union Commission the past Tuesday, April 9, is an eye-opener. (It was online).
In 90 minutes a listener received comprehensive, transparent. and timely information from multiple presenters. The topics covered state and national legislative priorities by a League representative and a thorough state-of-the industry review for all 29 state charters (ratios with and without SECU) by the Commissioner. There were updates on the status of the state system: sixteen credit unions have the low income designation and one pending merger.
Administrative briefings on the Commissioner’s office including an examination update (one done, six in process, and 22 to go), examiner training and staff openings.
At the agenda’s completion, the chair solicited comments from the attendees. Credit union members presented concerns about the Administrator’s oversight of SECU bylaw changes. One questioned the Administrator’ support for House Bill 410 to change the operating authority for North Carolina state charters.
The meeting showed the accessibility and transparency of the state’s regulatory environment. All were welcome. It was an open town hall with democratic participation and citizen oversight.
One of the most interesting reports for me was by Fred Eisel, CEO of Vizo Financial Corporate which serves the Carolina market and credit unions in 40 other states. His information was timely, positive, and specific. Several of his points: liquidity is growing in credit unions with corporate shares up and borrowing by members down. Vizo’s financial results are strong enabling increasing returns for members. Credit union operations are stable.
However, the number that struck me was Vizo’s Risk Based Capital Ratio at March end of 125%–that is not a typo.
Vizo financials through February are posted on their website. It has extensive disclosures of balance sheet and income statement details, shows total available liquidity of $6.5 billion, and includes nine measures of capital adequacy.
Fred sent me the March 2024 numbers showing the 125% RBC ratio.
The NCUA’s RBC requirement for well-capitalized corporates is 10%. Vizo’s ratio is twelve times that standard. Moreover, the corporate’s total capital exceeds 10% of assets.
Vizo CEO’s presentation of March’s final data just seven working days after month end, is extraordinary. It is a disclosure practice documented with web posting, that every credit union might model for their members. The timeliness is a tribute to the credit union’s management. It is also a standard NCUA should emulate in its reporting of the three funds it manages for credit unions.
Coffee hit a 30-month high today. The commodity is up 16% so far this year. One of the reasons is a heat wave in Vietnam.
Cocoa has been soaring due to weather problems in Africa. Cocoa is up 150% so far in 2024. (source: stocks at Night by CNBC Pro April 11, 2024)
From my driveway by Luis Escalante who was repaneling my workroom in Bethesda, MD. Luis used my eclipse glasses to cover his camera lens.
From the shores of Lake Ontario by Scott Patterson, CEO Credit Union Student Choice.
His commentary on being in the moment: Clouds didn’t cooperate to see the sun much, but we did get total darkness for a few minutes. Very eerie. The expansive lake view let us watch the darkness line approaching across the water and then see the full daylight on land in the far distance. A thrilling experience.
I recently received a copy of a CEO’s description of a fraud/robbery event at the credit union.
The CEO’s summary was sent to all employees for two reasons:
Here’s why the CEO believes full transparency matters:
“Whenever we take a loss I consider it a tuition payment. The least we can do is become smarter as a result of making that payment. We’ve already taken all actions to mitigate/manage the risk. Hopefully others can become smarter as well.”
In that spirit, here is his summary description of this very well-planned theft used with permission.
Everyone should be up to date on the robbery that occurred in early March . Perpetrators placed skimmers on two of our ITMs in mid-February and removed them just over a week later. They captured the magnetic stripe data of all cards used during that timeframe, re-encoded vanilla gift cards and drained our ITM’s on a Sunday morning in mid March.
All affected member accounts were immediately made whole, and all cards were blocked and re-issued. We identified all member cards that were compromised and are almost through the process of blocking and re-issuing all of them.
The Secret Service and FBI joined local law enforcement and we are assisting their efforts as much as we can. A bond claim is being filed so we remain uncertain as to what net loss we’ll incur.
Several configuration and procedural changes were implemented immediately, a few more in the days that followed, with still other changes under consideration. What’s important is that no credit union system was compromised at all, we know exactly how the perpetrators did what they did, and are actively taking steps to mitigate any future loss exposure. The perpetrators did not obtain any personal identifiable information (PII) such as name, address, account number, social security number, driver’s license number, etc.
Rapid action was taken to both replace any funds taken from member accounts and to prevent a repeat of this in the future. Everyone in the financial centers and contact center did a great job interacting with impacting members.
The incident was not a “local” gang. This theft was perpetrated by professional thieves who move quickly from state to state. Collaboration is a credit union advantage especially when a CEO is shares his “learning experiences” with his peers. Thank you.
Photo by Cody Doherty
by Harriet Monroe (1914)
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Note from Poem-a-day: Harriet Monroe, born on December 23, 1860, in Chicago, was a poet, critic, and editor best known as the founding publisher and editor of Poetry magazine.
Who do members turn to when they believe their credit union is not responsive to requests for greater transparency or accountability? These situations can arise around bylaw interpretation, board oversight, and election conduct.
Following are two examples of members’ interacting with their state regulator when they believe accountability is lacking in credit union conduct.
The first is a hearing of the North Carolina Credit Union Commission at 10:00 AM EDT today. Several members have sought clarification of the regulator’s approval for bylaw changes, especially those that affect the board election process. The toll free call in number is 1 (984)-204-1487. The access code757767261#.
There are thirteen items on the agenda, but the primary one is an update by the state administrator, Kristina Ray, on all areas of her responsibility. The ability to listen to a live state update is an important opportunity not just for North Carolina charters, but for all credit unions who are interested in the state and federal oversight process.
A reader sent me a March 18, 2024 article form the Lost Coast Outpost titled:
The story is a press release from one of the candidates for Coast Central’s board. She filed a complaint with the California Department of Financial protection over the credit union’s failure to release vote tallies for the 2024 board elections.
As a result the credit union posted the vote totals for all candidates for the most recen two years with the Chairman’s reply:
“In response to members requests at the annual meeting and in the spirit of enhanced transparency and goodwill, we have taken the additional step of posting the vote totals from the previous year on our website. We hope this action demonstrates our commitment to transparency and our dedication to addressing the concerns of our members.”
Prior requests to the CEO for details of the vote had been turned down.
The complaint was filed by Carrie Peyton-Dahlberg who wrote the press release for the local paper. The posted results showed she had come in fifth place just 172 votes behind the fourth place elected candidate in the 2024 election:
In her commentary “she urged Coast Central member-owners to use their comment cards to ask for further progress, such as publicly announcing board vacancies, revising board election rules so they don’t hinder election outreach, and changing the board appointment process so that future vacancies can be filled in a way that is more representative of community demographics.”
“Coast Central is moving in a good direction, including releasing these numbers, putting 2024 election reminders in each branch and making sure that its ballots were sent in clearly labeled envelopes. All of these are big improvements over the January 2023 election, and I hope this is starting a new trend.”
“Bit by bit, if member-owners stay involved, we can encourage Coast Central to move further down this path of listening to the people who own it.”
Releasing the actual votes in a member election would seem to be a fundamental requirement, a no-brainer. The California regulator seems to agree that members are entitled to know the actual votes cast in an election. That may seem like a small step, but is still not followed in all credit union merger and board elections-whether for state or federal charters.
This California precedent matters. Democracy can be a contagious activity. It is also a participant activity, not a spectator sport. Carrie Peyton-Dahlberg has done every member-owner a service by raising this issue of election transparency in her credit union. Hopefully, all regulators will soon see this fundamental accountability for a democratic process the same way.
I’m afraid I must rant again about NCUA’s management of the NCUSIF investment portfolio.
From the most recent posted financials as of February 2024, the Investment Committee appears to have learned nothing from the past two years of Fed Reserve short term rate increases.
The Committee bought a $650 million Treasury bond yielding 4.26% with a final maturity of 6 years and three months on February 15.
The investment extended the NCUSIF’s duration, increased the portfolio’s interest rate (IRR) risk, and reduced short term liquidity. The term portfolio (75% of the $22.5 billion total) is underwater by $1.3 billion and yields just 1.44%. the Fund’s overnight position in contrast earned an average yield of 5.41% in February.
This new term investment reduces income versus rates available at the short end of the curve by at least 1% or $6.5 million per year until the Fed decides to change course. Here are the Treasury rates as of Wednesday April 3, 2024 from CNBC Pro, Stocks at Night:
This decision ignores the IRR lessons from the more than two years of Fed rate increases. The negative consequences of this investment pattern on the earnings and liquidity of the portfolio during this time have been enormous. Moreover, in recent Board updates, staff said they made no change in their investment policy.
Those policy assumptions fail to adjust to not only events of the past two and one half years creating this ongoing underperformance; it is oblivious to the history of the Federal Funds rate.
Here is an analyst’s review of this rate experience in a recent update by a longtime observer and consultant to financial service firms:
Since the inception of the Fed Funds Overnight rate in 1954, the average and median have been in the 4-4.5% range. (https://fred.stlouisfed.org/series/fedfunds)
If you entered the industry after 2009 then you probably didn’t know this. Your “normal” was a Fed Funds rate in the 0-2% range and you probably think the sky is falling with the current rate at 5.33%.
The implication of a low Fed Funds rate since 2009 was that you could only survive by making loans because there was very little spread to be had between deposit cost and investment yields.
As NCUA staff repeats its past misjudgments, one would hope the board had the abiity to ask relevant questions and more importantly, documented policy plans and goals. This is what any examiner would require of a credit union with this continuing record of a $17 billion investment portfolio yielding 1.44%.
The current practice/policy increases the portfolio’s interest rate risk, provides no weighted duration goal based on the earnings requirements of the fund, and shortchanges the credit unions who should be receiving dividends from their performance during these last five years of minimal insurance losses.
Reviewing the NCUSIF history since 2009 shows that a portfolio yield of 2.5-3.00% would provide a stable NOL after all costs and growth assumptions. Returns above that would give credit unions a return on their collective investment—a public commitment when the NCUSIF was redesigned with industry support.
Here for example, is the published forecast from the August 1985 NCUA News (page 3) the year following the Fund redesign:
An estimated 6.8% dividend has been projected for the federally insured credit union deposits in the NCUSIF based on the Fund’s performance as of June.
The estimated dividend is part of an overall program of reporting to the NCUA Board and to credit unions on the Fund’s activities. The dividend forecast is updated each month. Office of Program Director D. Michael Riley noted that he expects the fiscal year dividend to be in the 6.5% to 7% range.
The core problem is that the board and staff have lost all the “muscle-memory” demonstrated by prior Agency leadership when projecting dividends. The dividend was and is the key success factor that separates the NCUSIF from all other federally managed deposit funds.
A 5% portfolio yield would result in total NCUSIF revenue of over $1.0 billion and a substantial return for credit unions. Current NCUSIF investment policy and practice shortchanges credit unions and mismanages the most important asset under NCUA’s administration.
The only advantage of this six year and three month investment is for the three board members, Their terms will all have expired. So they won’t have to explain how making the same oversight error increased NCUSIF’s portfolio risk while reducing its earnings for credit unions. In short, this NCUA board has no memory let alone muscle when it comes to overseeing the NCUSIF. Perhaps that’s why there was no Board meeting in March.
During my college days five decades ago, the primary work-study jobs were dorm crew, dining hall or checking out library books. Students receiving financial aid were expected to work at least 10 hours per week.
As the decade of the 1960’s progressed, the college campus atmosphere inspired by the Camelot years of President Kennedy gave way to the increasingly anti-Vietnam war and civil rights movements.
New protest groups were spawned across campuses. These included SNCC, Black Panthers, SDS and multiple other efforts to support social and political change.
In a partial final year on campus waiting for my date with Uncle Sam, I saw a three-day occupation of University Hall and attended a student meeting where one of the participants placed a gun on the table to demonstrate his radical intentions.
Part of this campus mood was anti-business—all kinds, not just the protests against Dow Chemical or other business seen as supporters of war. Capitalist society was deemed responsible for the multiple wrongs protestors wanted to change in US public policy and social inequity. No one saw business, or entrepreneurship worthy of academic attention or support.
Still, students would occasionally use their university setting to develop start up ideas. One that became very popular in the ’60’s was Operation Match, a paper based computer analysis of questionnaires to provide participants names of potential dating partners. It was noteworthy, because it was an innovation that filled an ever- present social need.
For the past decade there has been a revolution in both attitude and support for students in higher education who wish to create new business startups.
All of the top universities now have on-campus organized support, including courses for students and faculty who want to start new businesses.
A February 24, 2024 article lists the 14 Best University Accelerators and Incubators for 2024.
Every listing is a top academic institution including Harvard, Duke, UT Austin to USC and UC Berkley.
Here is a description of MIT’s multi-option effort which is headlined with its $100k Pitch:
Amazon web services (AWS) now sponsors a nationwide competition for university based startups: “It’s no secret that some of the most successful startups were founded by members of the university community: from Ava Labs to Anyscale and InsightFinder, to name a few. At Amazon Web Services (AWS), we believe this is because students and faculty are often creative thinkers who are willing to take risks and collaborate with their peers—all essential qualities in a founder.”
“For current Harvard students, the Venture Incubation Program (VIP) within Harvard’s Innovation Lab fund is a 12-week program with mentoring and resources. Harvard’s Innovation Lab also hosts the President’s Innovation Challenge, where students can win funding money of up to $75,000 for a great idea. Judging criteria includes viability, empathy, rigor, ingenuity, traction, economics, and impact.”
Here in D.C. George Washington University sponsors an annual competition inviting students, faculty and their supporters to present business proposals and collect cash prizes and other forms of startup support and counsel.
Three finalists compete in one of four startup categories:
Consumer Goods & Services
Business Goods & Services
Social Innovation
Health Care & Life Sciences
Each finalist prepares a one-minute video of their business proposal. There are immediate cash prizes plus additional consulting and funding support:
Companies have one year to register as an LLC to claim the money.
To see these young entrepreneurs’ ingenuity, passion, and commitment I would encourage you to sample one or all of the 12 finalists’ sixty second pitches which you can find here. Several that were intriguing were Siyeh Tech’s entry to accelerate the “Speed of Peace” after conflict, In-Locater, and Goal Plus.
All of these business ideas are either conceptually complete, if not already in beta. George Washington’s New Venture Competition is one of many in the higher education community. This is not only an “educational” institution responding to students’ interests; in some the university benefits from partnering as startups go to scale backed with venture capital.
These competitions are not standalone events such as a campus springtime arts festival. These programs are supported by courses, different “labs,” seminars and lectures on the art of pitch preparation and visits by university alumni speaking on their business success.
These educational innovations are helping to spark an ever-renewing stream of new business ideas with support systems intended to foster success. Students are encouraged to jump into the capitalist world and perhaps reap fame and fortune.
Simultaneously a parallel change for venturing has developed for college athletes. They can now receive income from their Name, Image and Likeness (NIL) endorsements by private businesses. Caitlin Clark is not only Iowa’s leading basketball player, but she also appears in commercials while her games are being broadcast. She may be the first million dollar undergrad student-athlete.
Unlike my era in college, higher education is an active participant in American enterprise. What does this have to do with credit unions?
Cooperatives are missing in action. Students are not learning about personal finance from credit unions. Credit unions which have students in their FOM’s often see them as a secondary market opportunity.
Every company, professional sport franchise, consumer product, auto manufacturer etc. must resell its brand to the next generation of users. Or face the prospect of going out of business. Product loyalty, like religious observance, is not easily passed down in a family in today’s society of instant access and social media.
If credit unions miss this generation of college students, will they ever catch up as they move on in their careers and families?
In the 1980’s, NCUA played a very active role supporting new student led credit unions as described in this post. That effort is missing today.
Credit union’s absence from college and university campuses feels like a missed opportunity for attracting this generation of self-help innovators and strivers. How do coops become part of this new enterprise engagement by student entrepreneurs?