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.
This week’s blogs are video excerpts of wisdom from prior credit union leaders. (best seen in browser mode)
They still speak to our present circumstances as their core messages are timeless.
One legacy practice Jim Blaine believes is core to the cooperative model is a common rate for all borrowers. He believes risk based lending pricing discriminates against those who most rely on the cooperative difference.
In this three minute video from 2010 he provides his logic. Although retired in 2017, he continues to expand his arguments with examples in his current blog SECU-Just Asking.
One interpretation of Jim’s approach is in this 2010 GAC interview with Wayne Vann, CEO of NavyArmy Credit Union (now Rally CU). His two keys: putting a pulse to every loan and the autonomy of lenders to make decisions. (1.14 minutes)
(https://www.youtube.com/watch?v=rSXa3T8iGTY)
This week’s blogs are video excerpts from prior credit union events. (best seen in browser mode)
Today’s are brief CNN and CNBC news excerpts recommending credit unions as an option consumers should consider.
This short clips are during the 2010 financial crisis They tell why credit unions might be a better choice.
They highlight the system’s reputation earned during the 2008/2009 financial crisis as a reliable source for loans as banks were forced to draw back.
(https://www.youtube.com/watch?v=H0dNHDsFvuE)
The following CNN excerpt compares credit union and bank average rates as part of Why Credit Unions are Better.
!https://www.youtube.com/watch?v=I_CaoDPGl7Y)
Credit unions described as an unusual source for home loans during the financial crisis.
(https://youtu.be/EwbLgsyWcjI)
What would the news report about credit unions today?
This week’s blogs are video excerpts of wisdom from prior credit union leaders. (best read in browser mode)
They still speak to our present circumstances as their core messages are timeless.
The first video is a very brief excerpt from Jim Blaine, CEO of SECU NC in 2010 reacting to the prospect of increased regulation following the financial crisis (37 seconds). His view is referenced in the second vido.
(https://www.youtube.com/watch?v=E1tnDcE6Xjo)
In 2010 Dave Serlo PSCU President analyzes credit union performance during th 2009 financial crisis in a talk called Different by Design. The context was PSCU’s annual users’ meeting.
In this 14 minutes he cites Jim Blaine’s remarks on regulation. Most importantly he outlines opportunities for credit unions and the “credit union promise.” He closes with four priorities for the CUSO. Now is the time to be on offense, especially for expanded lending.
Dave was a remarkable speaker using no notes or other prompts. Most importantly is his deep insight into the power and importance of the credit union model and CUSO’s. His final words still resonate: Carpe Diem, seize the promise of this day.
(https://www.youtube.com/watch?v=6uS7Zl3lROE)
This week’s blogs are video excerpts of wisdom from prior credit union leaders. (best read in browser mode)
I believe they still speak to our present circumstances. For the core of their observations are timeless.
Doug Fecher (now retired) CEO of Wright-Patt Credit Union, Dayton, Ohio speaks to the ultimate mission of the cooperative. (just over 1 minute)
(https://www.youtube.com/watch?v=tE_3-ipOiPE)
Later in the week, there will be two excerpts with examples of how the credit union implements this vision.
Readers may be aware of my interest in and support for Ukraine in their fight for freedom. Occasionally I write posts about events in this country under daily attack by Russia.
There are many opportunities to support Ukraine from direct donations to organizations in-country to funding students and persons living in the US and other countries of refuge.
I just learned about another long-standing organization called This Child Here founded by a Presbyterian minister in 2006. The leader is Robert Gamble who tells of his initial work with homeless youths in the disrupted society following the country’s independence. This effort came in mid career, after serving five years in the Coast Guard and then attending Princeton Theological Seminary to enter the ministry. He has served as pastor for five churches throughout the denomination.
He writes in 2007 of his initial experience working with an NGO in Ukraine to help homeless youth:
You don’t have foster families in Ukraine. No one can afford another child. “You have three children,”a taxi driver said to me, “you must be a rich man.”
While I am here there are times I drink too much but most times too little. I spend like a poor man but live a life that is rich. I listen to idiots, skeptics, learned people and fools, I learn from the suffering of children. I doubt and trust, give away and receive. I get robbed and restored, applauded and shunned.
I see churches void of life and attended worship with more life than my comfort zones can handle. I gave one sermon; it wasn’t in a pulpit , and I didn’t wear a robe . I stood on a rented stage in an old movie auditorium and it hardly lasted seven minutes, but I felt alive and honored as every word I spoke was repeated in Russian.
Gamble’s work leading the organization now alternates between three months on the ground in Ukraine followed by three months of travel throughout the US fund raising for his 501 C 3. His current itinerary shows 98 stops with churches, local groups such as Rotary and “friends” on his September 7 to November 17 return.
His group’s purpose today:
We work with families displaced by the war. Thousands of people have fled cities in the east and arrived in Izmail, Ukraine in the west. As many fathers are in the military or still residing in places now dangerous, these families often consist of mothers and children.
We provide products from grocery stores, and centres for youth and children’s activities, including sports, music, art, and programs led by psychologists. Through these activities, summer camps, and the supportive community we have built, we offer therapy for the trauma and shock suffered by these families. This Child Here, Inc. is a Validated Ministry in the Presbyterian Church (USA).
The work is not without danger as recorded in this brief 2003 video.
When this war is over, people will read about what was done, not just between armies, but behind the lines where people help people and people change people, for the better.
This is an American who for two decades has invested his energy, mind and purpose with the belief that people changing people will make the difference in the future of Ukraine. And I believe in other societies as well, including ours.
As I learn more, I will share this person’s journey of a committed life.
On October 1 CEO Catherine Tierney entered her 49th year with Community First Credit Union. The Appleton, WI based coop is today $5.8 billion in assets serving 158,000 members with 29 branches and over 580 employees.
She posted this thank you on her LinkedIn page upon beginning her new year. I describe her post using her own words as, the gift of doing what you love:
“October 1st is a special day to me.
“Today marks a milestone of 48 incredible years at Community First Credit Union. It’s been a journey filled with growth, challenges, and countless memories that have shaped not only my professional life but my personal one too.
“From the early days of learning the business to now being part of this amazing organization’s transformation, I’m grateful for the opportunity to have worked alongside so many talented people who share the same dedication and passion for our members, our industry and our communities.
“Thank you to my colleagues, past and present, and to our loyal members for being part of this remarkable journey. Here’s to the gift of doing what you love and the joy that comes from making a difference together!”
From the archives I thought it would be helpful for people who may not met her to see how she and the credit union present their work. Following are two examples of the joy making a difference together.
The first is a short excerpt of a Catherine interview from several decades ago about how the credit union employees are the first responders for identifying members in need:
(https://youtu.be/lzAN0HXXQBo)
This second video is a story how Community First helped a young couple get started in life when they didn’t think there was any way to adopt their son and then buy a home.
(https://www.youtube.com/watch?v=d6AQbDYSmpg)
Catherine’s long service of leadership with her team is an example of what credit unions do best for their members and communities. All who believe in the difference credit unions can deliver, should be grateful for her two generations of professional member-centric commitment.
The largest member vote in a credit union board election resulted in the slate of four incumbents all winning by a wide margin.
The cumulative total vote for the four winners was 232,452 (67%). The four member-nominated candidates total was 113,117 (33%). The headline in Jim Blaine’s blog after the vote was announced: Pretty Strong Thumping!
The outcome was the exact opposite of the 2023 vote where the three challengers to the board slate were all elected. The vote was significant in other respects. Adding the highest total votes for the leaders of each slate, suggests almost (62,392 and 31,203) 94,000 or more members voted.
This is an extraordinary level of participation. It shows the interest and willingness of members to participated in the selection of their leaders. Once awakened in their role, will they continue to follow credit union events as more than a customer? Have their ownership “genes” been activated? Will next year’s election involve a choice?
The meeting was broadcast on YouTube. SECU staff had posted the results later with the full recording. Also posted are the financial summary for fiscal 2024 and links to the 54 page 2024 CPA audit.
While the vote was the main outcome, that announcement took just several minutes at the very end. The meeting’s substance were reports read by the Board chair, the Foundation’s chair (with video summary) and nominating committee chair.
The most important parts of the agenda were CEO Leigh Brady’s report and then her response to dozens of member questions sent in advance. Putting these two parts together a relevant title for the meeting’s substance might be the Leigh Brady Show.
After opening remarks on Helene’s devastation in Western Carolina and saying all employees were safe, Brady stated her personal vision as, “we work together to leave SECU better than we found it.” (1:03). She provided a summary of major financial trends, both positive and not, showed a chart of an increase in SECU’s share of member loans (25.8%), and compared its loan charge-offs for the first six months of 2024 to the five largest credit unions. SECU’s outcome (.74%) was between Navy FCU’s 2.54% and BECU’s .59%
She introduced a new SECU’s data point, its initial Net Promoter Score (63), as an indication of member loyalty. Her closing was a listing of FY ’25 priorities including new member reward or cash back credit cards, a new mortgage servicing platform, voice authentication, selection of a new core data processing vendor, replacing branch ATM’s and a new digital platform. She noted that several of these initiatives, especially the new core, will extend over multiple years.
Her presentation was well organized, detailed with graphs and comparisons, and with specific priorities for the new year. Her very full report could be a model for other CEO’s in disclosing their prior year’s results and future plans to the member-owners.
The second part of Brady’s role was spending an hour answering 50-60 questions from members that were submitted prior to the meeting.. There were few “softballs” in these queries. And while she may not have fully responded on some points, the questions were the most interesting part of this event for me, and probably the members who submitted them. Here is a small sample of some of the topics raised:
There are dozens more questions, all of which CEO Brady answered. She replied even in areas concerning board conduct and policy or in the case of the CashApp fraud loss, an internal issue.
This hour long Q&A was the most extended explanation, an in-depth discussion I have seen in no other credit union’s annual meeting. Even as it appeared most of the answers were being read from a script, she addressed each topic. Some might feel she failed to see some of the underlying concerns; but no one could argue that all the pointed, potentially embarrassing or even opposing views were not included. She stood her ground.
That stance is the final takeaway. The meeting was a very controlled event. The camera never wavered from only showing the individual speaker. Even when Brady was answering questions, the person asking them was heard but never appeared on camera.
Several times Brady acknowledged attendee’s responses to her remarks, but there was never an audience view. Board members spoke on camera, but were never shown sitting together. The Foundation video and presenter’s slides were seamlessly woven side by side on the screen with the speaker.
This YouTube broadcast was a very well-produced and visually managed event showing only the four speakers and nothing else. No chance for any spontaneity or audience reaction.
Brady closed her CEO presentation by referencing this year’s meeting to include “another contested election” that will not impede our going forward. One cannot help but come away with the feeling that this year’s event was a reaction to the two prior meetings where the board must have felt things moved out of their control. This time the outcome which had some excellent content, especially the member questions, was an exercise in the power of incumbency.
Will that exercise in authority work to promote the members’ and SECU’s long term viability? Or, will SECU just transform into another example of a large credit union similar in operations to its peers?
My understanding of the last two plus years of public controversy about SECU is that the core issue is effective strategy. While there were specific tactical topics such as risk-based lending, critics’ deep concern was whether SECU’s members would be as valued if the credit union offerings just looked like every other financial institution’s.
Aligning SECU’s products and services to conform with the majority ot its peers may certainly garner some low hanging fruit. SECU’s response to critiques of its tiered lending was its intent to “serve all its eligible members,” especially the A credit score borrowers going elsewhere.
The previous cooperative vision of “send us your moma” was centered on members who may not have had A options readily available, and needed a fair and trusted institution to turn to.
Over time this member-centric focus extended to innovations in salary advance loans, broker dealer options, life insurance, a state-wide 529 insured college savings account and even how repossessed real estate was managed. The SECU Foundation’s innovative funding model has made it a marketing presence for the credit union throughout North Carolina.
These financial service expansions were based on a belief that to beat the competition, one cannot simply emulate them. Hence when asked about offering 30-year fixed rate real estate loans conforming to Fannie/Freddie requirements, the response was, Why compete with the government’s product?
Time will tell how this most recent strategic overlay will mesh with the legacy elements on which the credit union was built: its branch structure, decentralized decisions, advisory board roles and unique partnerships within the industry.
The datapoint from the meeting that may be most relevant in this ongoing transformation is the 33% who voted against the incumbents. That number suggests a more studied understanding to integrate past success and current changes might be useful.
At 1:00 pm the Annual Meeting for SECU NC will commence. The meeting can be viewed virtually by going to the credit union’s homepage.
This is an unprecedented event in the history of America’s cooperative financial system. With an estimated 2.8 million ballots mailed or by voting online (or in person today), it will be the largest election for a cu board ever conducted.
SECU is the second largest credit union in America with $56 billion in assets. It is unusual for the member-owners of any credit union to have a choice in their directors. In this case, there are two competing slates of candidates with differing business priorities and strategies for the cooperative.
Most importantly everyone can watch this meeting live, virtually. The Agenda includes the standard reports from the Chair, auditors CEO and the foundation. This year’s meeting procedures have been changed to limit open interaction with members during the meeting.
Rule 5. Up to one hour will be set aside during the meeting for a question-and-answer session. Members must submit any questions in advance of the meeting. To permit as many members to ask questions as possible, we ask that you limit yourself to one question or topic.
The final agenda item is the announcement of the members’ votes to fill the four open director positions. Both sides have urged members to vote. There were active social media campaigns by the incumbents and the member-nominated group. These campaigns extended over 60 days once all nominees were known.
If the voting turnout is significant or should there be a split result, one probable outcome will be an energized, involved and aware group of member-owners. Once engaged in their franchise role, it could change forever the governance dynamics of the credit union going forward.
SECU’s tagline on its website with the information about the member annual meeting is:
Your voice. Your right. Your vote.
While credit unions routinely cite their democratic one vote per member-owner design, it is rarely provided in board elections. This example will demonstrate the ability of the election process for any credit union. And just maybe, reawaken member-owner enthusiasm for their pivotal role in their financial cooperative.
I plan to watch the event and report the outcome on Wednesday.
A 2023 documentary film’s message puts credit unions right at the center of our current political angst.
The film is Join or Die. ( this is the 3 minute trailer) It is based on the work of social scientist Robert Putman who in 2000 published a book called Bowling Alone. It documented the decline of local organizations that create the connections on which individuals built their trust in and sense of community.
The author calls this foundation of mutual confidence and relationships “Social Capital.” In his analysis, these organizational connections have real value.
The film updates this decades long continuing trend of increasing social isolation. He believes the loss of local networks has contributed to the decline of confidence in American democracy. For it is in our connections with multiple organization that we develop awareness of mutual obligations and the common good.
The cooperative movement, and especially credit unions, were founded with social capital. Unlike other profit making firms, only minimal shares were pledged by organizers to receive a credit union charter. The Field of Membership was the existing external network that provided the connections giving a new charter its mutual support and market focus.
The net worth or financial capital requirement was a flow concept. Either 10% or 5% of revenue had to be set aside into reserves until a certain ratio of net worth to risk assets was attained.
In the 1998 Credit Union Membership Act this “flow” concept of capital adequacy was replaced with a “stock” measure–that is the ratio of net worth to assets. This financial point in time definition was expanded by the 2022 imposition of a risk-based capital. This raised the well capitalized ratio from 7% to 9%.
The founding cooperative bond of social capital was replaced with financial ratios. This transformation was accelerated as credit unions evolved their fields of membership into new groups, areas or criteria with little connection to each other. Instead of established connections, credit unions began relying on new brand creations and marketing to establish a their presence in the markets they sought to serve.
As credit unions moved further and further from points of connection with relationships of trust, a second decline was in member-owner governance. The annual meetings no longer featured contested board elections; rather the board nominated the same number of internally selected candidates as vacancies. No member votes were cast; the positions were filled by acclamation.
This resulted in the erosion of any pretense of democratic governance. Increasingly self-appointed boards grew further and further away from their members. Credit unions were not alone. Putman’s work suggests that over half of America’s social/civic infrastructure has disappeared since he first wrote.
As these foundational experiences of local connection are lost, individuals become more isolated. And with that feeling, so does confidence in the governmental process, both locally and nationally.
One can debate whether credit unions contributed to, or are just another example of, institutions caught up in a fundamental transition of community relationships. It is certainly possible to find longstanding successful credit unions still serving their core markets. One indicator is a credit union’s name such as Wright-Patt Credit Union. The counter evidence would be examples where the institution has repositioned itself with growth efforts based on leveraging of members’ financial capital with mergers or bank purchases.
The film highlights Putman’s analysis of what makes American democracy work.
It explains why our traditional political process of compromise is much more difficult.
Finally he suggests what can be done about it.
While the film documents the loss of social infrastructure, there is good news. As the trends are laid out, the film closes with the message, “You can decide to change history.” The “financialization” of credit unions with their loss of a social capital bonding can be recovered. But how to start?
A recent communication from the Texas Credit Union Commission’s monthly newsletter provides a place to reaffirm this core cooperative asset. Change comes from the top. Here is an excerpt from their Newsletter that I believe directly speaks to Putnam’s concerns.
Critical to the long-term success of a credit union is an active, involved board that provides proper oversight of operations and a sound strategic direction for the future of the credit union. One of the keys to ensuring that a board is successful is regular, participatory attendance.
This is particularly true given the rapid pace of technological change and the need for partnerships with financial technology companies (“Fintechs”) to provide services wanted by your members. . . Management and the board must ensure that . . .the Fintechs chosen are a good fit for the credit union and the membership.
Board involvement is important in Fintech selection and other important strategic decisions affecting your credit union. The issue of board attendance is a tricky one. Board members are volunteers with their own jobs, families, and busy lives to balance in addition to the voluntary obligations of serving on a credit union board. However, missed meetings seriously diminish the effectiveness of the entire board, and a director’s irregular or inconsistent meeting attendance could result in removal from the board. . .
It is important for board meeting minutes to reflect if a director’s absence is excused or unexcused. The lack of a record of an affirmative vote by the board is construed as an unexcused absence. . . Once a director misses . . . the prescribed number of meetings . . .there is nothing the board can do except to fill the vacancy with a new person within sixty days. . .
This Texas regulator’s message is a clear reminder of every board’s guiding role and responsibility, from NCUA’s three directors to the system’s smallest of credit unions,
This is an important leadership statement from one component of the credit union’s unique dual chartering system. Board members should actively Join in their roles, or credit unions could Die.
There have been pivotal years in credit union history, none more so than 1984.
NCUA and credit unions celebrated unprecedented market place, legislative and industry financial success. NCUA issued over 100 press releases over the 12 months. These announcements covered credit union performance, agency initiatives, and multiple press and political comments on the cooperative system. Here is a very small sample, in date order, of these Agency communications:
Jan 4: American Banker reports credit unions grow faster.
Jan 11: CLF pays quarterly dividend of 9.0%.
Jan 16: NCUA Acts to recover Penn Square losses
Feb 15: Credit Union Stamp Released in Massachusetts
Feb 29: Symposium on College Student Credit Unions
Mar 6: Financial Performance Reports a Hit
Mar 9: NCUA Board to Meet in Tucson
Mar 14: Credit Unions Fastest Growing Financial Institutions
Mar 21: Callahan Testifies Before Senate Banking Committee on Insurance Fund Capital
Mar 24: NCUA to hold First Conference of Federal and State Examiners
Apr 4: Banking Committee Approves Capitalization Bill
Aor 18: NCUA Names Koppin Supervisory Examiner of the Year
Apr 30: Credit union Statistics for March
May 15: NCUA Central and Regional Office Realignment
May 24: NCUA Investment Hotline Unveiled
May 30: Credit Union chartered for Cannon Hills Employees
June 19: 50th Anniversary Celebration
June 22: President Issues FCU Week Proclamation
July 18: President signs Bill to Strengthen Insurance Fund
July 26: NCUA 1985 Budget down 4.9%
Aug 21: FCU Growth Surges at Midyear
Aug 31: Two Per Credit Union Limit Placed on Las Vegas Conference
Oct 9: Board Adopts Capitalization Rule
Oct 12: Credit Union Membership tops 50 Million
Oct 22: Credit Unions Most Popular Financial Institutions
Nov 15: Board Slashed Operating Fee Scale 24%
Nov 23: Seger, Breeden, Connell, Pratt Announced as Speakers at Las Vegas Conference
Dec 18: American Banker Reports CU’s Growing Faster than Thrifts
Over 70 additional releases about key Agency and credit union events were issued.
All of these releases were amplified in the monthly NCUA News sent to all credit unions as shown in the samples below.
Additionally, NCUA created a Video Network in which the Agency communicated significant changes and events both internally and with credit unions. Here is the brief opening segment of an hour long video introducing the recapitalized NCUSIF.
(https://www.youtube.com/watch?v=Wsq74FkMrPQ)
In 1984 there were over 16,000 active credit unions. All FCU’s were examined annually overseen by six regional offices and a staff of just over 600. The brief excerpts above of the Agency’s wide-ranging activities and reports are a tiny sample of the interactions and communications with the credit union system, Congress, the White House and the public press.
These events occurred in the third year of Ed Callahan’s chairmanship which began in October 1981. The NCUA board, Bucky Sebastian, Executive Director, and the Senior staff believed that public service is a public responsibility. Senior employees were available, willing and eager to engage with all constituents. And most importantly. accountable to those who entrusted their funds and members’ futures to the regulator for oversight.
A highpoint of this interaction was the December 1984 National Credit Union Conference organized and led by NCUA with the support of the credit union system. It was a first for NCUA, and the largest conference ever held at that point in credit union history. The event was a coming together to celebrate the cooperative system’s growing relevance and success. And to share views about the future of the movement by all those who were dedicating their lives to their members’ well-being.
In 1984 as this year, there was a Presidential election. Everyone remembers the outcome. NCUA’s leadership and its results in 1984 are a reminder that good government is also good politics. An example especially relevant now, four decades later.