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.
Yesterday I wrote about the need for disruptive leaders to regain the unique advantage of cooperative memer-owner design.
Ancin Cooley is a former OCC bank examiner and long-time credit union consultant. He has a working knowledge of almost all areas of credit union operations and regulatory issues.
He is creating a new collaborative initiative for credit union professionals who want to focus their leadersip on enhancing the member-owner elationship.
Ancin’s initiative is outlined below. It is a combination of teaching and mentoring for only $8 per month. He describes several unusual design featues in the resources he has assembled.
His contact information for his newsletter is at the end of this outlne.
CU Communities: What We’re Building and Why It Matters
In July 2025, we’re launching CUCommunities.org — a subscription-based online learning and mentoring platform created for credit union professionals and volunteers. But more than a platform, this is a response to a real need in our movement.
My own background is in regulatory examination, governance, enterprise risk management, internal audit, and strategic planning. And after working with hundreds of credit unions across the country, I kept seeing the same gap, not in the talent, but in support.
Credit union professionals — especially those at smaller institutions — are often under-resourced and over-expected. They’re tasked with solving complex, high-stakes challenges with limited tools and limited time. And too often, their development is tied to someone else’s permission, budget, or bias.
People ask:
“Where can I privately and on my own time get step-by-step guidance?”
“Where can I get mentorship?”
“Where can I ask questions without being judged for what I don’t know?”
“Where can I learn how to actually execute my strategy?”
CU Communities is designed to answer all of that — with practical, consistent, and role-specific learning delivered at a price an individual can afford and an institution can support.
What CU Communities Offers
This isn’t just a content library. It’s a community of practice.
Subscribers will have access to:
What makes us different is how deep we’re willing to go. Without the overhead of a traditional association or vendor model, we can focus on the real work: BSA risk assessments, ALM modeling, look-to-book ratios, member business lending concentration thresholds — the things professionals actually need to understand.
Districts and Neighborhoods
We’re organizing CU Communities into two layers:
Over time, more districts and neighborhoods will be added based on demand and input from the community.
A Pricing Model That Empowers
The first phase of our rollout gives individual subscribers access to every district for just $8/month. That price point is personal. It reflects a core belief:
Graduate-level insight shouldn’t be gatekept.
This subscription allows anyone — even those further down the org chart — to access the kind of content, coaching, and perspective usually reserved for senior staff or conference attendees.
It’s for the teller who wants to understand ALM.
For the collector who dreams of becoming a CLO.
For the new lending manager who needs to build confidence before speaking in front of the board.
If they’re willing to invest in themselves — even quietly — they can grow.
No permission slip required. No budget approval needed.
Just initiative, access, and a community that sees their potential.
Additional subscription tiers ($15/month) will unlock neighborhood-level access, including peer mentoring and facilitated conversations.
For credit unions, teams of up to 10 employees can join for $80/month, with additional seats available upon request.
More Value. Less Cost.
We’ve set a bold three-year strategic goal:
To create and distribute more courses, policies, tools, and mentorship hours than all the leagues combined — at a fraction of the cost.
Why? Because education in our space should be:
Whether you’re a volunteer trying to understand ALM or a VP preparing for the CEO seat, we want you to feel something rare:
That you’re finally getting more for less.
Built by Practitioners — For Practitioners
CUCommunities.com isn’t driven by theorists, consultants, or vendors. It’s built by people who’ve lived the work — and who want to pass that wisdom forward.
That includes:
And here’s where we’re doing something revolutionary:
Everyone who contributes content — from workshop instructors to mini-course creators — retains ownership and receives revenue in perpetuity.
Most webinar houses pay $500 and own your content forever.
Not here.
We’re building a cooperative economy inside a cooperative industry.
Guardrails That Protect the Mission
To remain independent and principled, CU Communities has codified a structural safeguard:
No single revenue source — sponsor, vendor, or institution — will exceed 25% of total funding.
This isn’t just financial policy.
It’s governance by design.
It’s how we protect our integrity — and yours.
The Bottom Line
CU Communities is for people who want to get better. Who want to lead better. Who want to build better.
This isn’t a one-time launch. It’s a growing, breathing, member-driven network.
And it’s here for you.
Join the newsletter here: CUcommunities.org
Questions or media inquiries: acooley@syncuc.com
The most critical threats to credit union’s future are not external, but internal.
Taxation is merely an ongoing PR gambit which both sides use to reload their lobbying coffers. The decline, or demise, of the credit union option won’t be from competitors, regulatory adjustments or rapid technology change; it will be from failure within.
Cooperative design provides an unmatchable completive advantage against all foes. In credit unions the users are also the owners. In all other firms the objective is to extract a profit from consumer relationships to pay another group, the shareholders, a superior market return.
Over the past several decades, CEO’s and boards have moved further and further away from their members. The owners no longer have a meaningful role except making transactions. The required annual meetings often do not allow members to attend, let alone participate. Members are merely customers whose interests are subordinate to the institutional ambitions of the “elected” leaders and the board’s chosen CEO.
The current effort in Washington State with bankers sponsoring legislation to tax state credit unions which buy banks is a creative PR move. But it is not a threat to coop institutions. Most Washington charters have no interest in a bank purchase. In the several states that already tax all state charters, this has not stopped those firms from growing and competing. Think Indiana’s FIT tax.
Moreover as in many tax situations the workarounds negate any real impact For example, a credit union could buy an out -of-state bank or convert to a FCU to avoid the local tax.
This law change would not endanger any credit union’s future. However it does focus the spotlight on the internal divorce now occurring between credit union’s leaders and the member-owners.
Has a credit union member ever suggested their organizaton use its collective reserves to buy out a bank’s shareholders at at premium over market? It could never happen.
Credit union leaders would never ask owners for their thoughts, let alone their approval. The members rarely are told the terms of the offer (unless the bank is publicly owned) while the bank owners who must approve it, are given all the details. Bank buys are an executive strategy, not a member facing one.
The Washington State tax initiative is a creative effort to highlight the increasing incongruity between credit union’s stated purpose and present practice. Credit unions were not chartered to buy banks but rather offer consumers a better value proposition with an ownership role versus traditional banking options.
The leaders of credit unions buying whole banks have moved away from their owners and communities as their primary mission. They use the member’s reserves to purchase other firm’s financial assets which provide no direct member benefits. It’s he bank’s shareholders who are the winners.
The history of political democracies from ancient Greece and Rome through modern day examples, show that outside forces rarely subdue a democratic opponent. Rather democracy fails from within. Leaders, initially elected, use their positions to further their self-interest, longevity and ambitions versus serving the interests of those who put them in place.
In the first quarter of 2025, NCUA lists 35 credit unions “failures.” However the word used was mergers. Yet reviewing the list most are financially sound, long serving and in many respects focused on local community contributions. These charer cancellations are leadership defaults, not financial failures.
For the past decade mergers have increased as a central growth strategy for some credit unions. Recently a series of large billion dollar mergers have been announced. In the DCU (Massachusetts) and First Tech (California) $26 billion combination the two firms are almost 3,000 miles apart. The press release did not specify a single concrete member benefit. If you want more information, a member-owner is directed to contact the Silicon Valley PR firm managing the communications.
In this and other large mergers there is no benefit described that the individual credit unions cannot deliver themselves. Instead in these and in many smaller mergers initiated by retiring leaders, they are a get rich quick scheme for a few senior executives, or a retirement topping off.
Retiring leaders who gained a professional career and standing, eliminate that opportunity for others and the owners’ legacy of loyalty. In return the depating CEO receives an enhanced payout or an extended sinecure.
The end result of these merger and bank transactions is that the credit union system has been pirated away from its ownership roots. These entities then pad the budgets of regulators, system coordinators and their professional operators whose focus is size—both assets and compensation- not member-owner’s and community needs.
Disruptive leadership is necessary to reverse a system in which cooperative leaders have abandoned the advantage that built the sysem’s current prominence. Taxation is not a disrupter and could even accelerate these bank-like maneuvers using a “level playing field” justification.
The secret to winning in a competitive market is to define the game you want to play, not play the game you find. Credit unions built their success around a unique cooperative model.
Placing institutional priority on external acquisitions is neither new nor unique in market economies. It is merely a bidding contest whether done via mergers or for bank purchases. It is how monopolies are constructed- the ultimate capitalist ambition.
There is no current body nourishing the sustainability of cooperative financial services. If the credit union system is to remain viable it will require new energy and coalitions formed by leaders pushing to the front. Not to fight taxation, but internal subversion, and in some instances corruption, undermining the cooperative model.
Tomorrow I will introduce a person trying to rally and fortify the unique strengths of the cooperative system.
The phrase “dark night of the soul” portrays personal, and sometimes communal, feelings of no way out of present trials. The loss of hopefulness.
Frost’s meditation reminds us that these dark valleys reflect neither wrong nor right. They are part of our humanity.
by Robert Frost
I have been one acquainted with the night.
I have walked out in rain – and back in rain.
I have outwalked the furthest city light.
I have looked down the saddest city lane.
I have passed by the watchman on his beat
And dropped my eyes, unwilling to explain.
I have stood still and stopped the sound of feet
When far away an interrupted cry
Came over houses from another street,
But not to call me back or say good-bye;
And further still at an unearthly height,
One luminary clock against the sky
Proclaimed the time was neither wrong nor right.
I have been one acquainted with the night.
On Saturday CEO Warren Buffett’s four-hour, open-ended Q&A with Berkshire shareholders was a lesson in leadership. In life’s wisdom. And in human values. It was his last time as CEO.
If you read one of many excerpts or listen to a recording, you will be rewarded with a superb public discourse.
One observation is especially relevant to an issue confronting today’s credit union system leaders. That is the radically different approaches to assure future cooperative resilience.
Buffett stated in one response: “Capitalism in the United States has succeeded like nothing you’ve ever seen, but it has what it is, a combination of this magnificent cathedral, which is produced on the economy like nothing… the world’s ever seen. And then it’s got this massive casino attached.”
The casino describes the speculative, short-term, and potentially risky side of capitalism, where quick gains and money changing hands are the primary focus. The allure and rapid growth of the “casino” can lead to the neglect or overshadowing of the “cathedral.”
Responding to a question about hedge funds entering the insurance business, Buffett pointed out that these firms, which specialize in buying and selling businesses, follow different “fiduciary feelings” than Berkshire. Berkshire’s goal is to acquire a business for the long term (forever), not turn around and resell for short term gain. He believes his approach is the best way to create long term value for his owners whom he wants to retain as well.
Today there are two broad business approaches followed by credit union CEO’s. Driving these are two different “fiduciary feelings” about where one’s duty is directed.
On the one hand are those who believe the CEO’s primary goal is to maximize institutional growth quickly. In some instances, this is through mergers or purchasing external assets or even whole firms (banks).
The primary motivation is maximizing the rewards of leadership. Sometimes this is while employed; or if not then, cashing out by handing the firm over to another credit union for the right personal compensation from a merger.
A growing current example is the increase in “mega-mergers.” These multi-billion combinations offer the owners nothing that the individual firms cannot deliver. Sometimes they are an effort to eliminate a local competitor; in others, it is to gain a larger space and personal reward in the credit union Cathedral.
This Casino approach to leadership is described by writer David Simon in the composition Privilege. It ends with the words, I’ll play by those rules:
It’s almost like a casino
You’re looking at the guy winning
You’re looking at the guy who pulled the lever
And all the bells go off
And all the coins are coming
Out of the one-armed bandit
And you’re thinking that could be me.
I’ll play by those rules.
The purpose which built the credit union Cathedral is captured in this 1850’s folk song by Stephen Foster, Hard Times Come Again No More.
The first verse sets the scene:
Let us pause in life’s pleasures and count its many tears
While we all sup sorrow with the poor:
There’s a song that will linger forever in our ears;
Oh! Hard Times, come again no more.
Followed immediately by the rending chorus:
Tis the song the sigh of the weary; Hard Times, Hard Times, come again no more; Many days you have lingered around my cabin door, Oh! Hard Times, come again no more.
“It’s a song about poverty–financial poverty first and foremost, but it also hints at a poverty of spirit, of general misery.
“What’s refreshing about it, what makes it stick in our craw, is its honesty. It doesn’t flinch or pull back from showing real human suffering, bringing it to the very entrance to the drawing room: “Let us pause in life’s pleasures.” (Source)
This 2010 recording is one of numerous current arrangements. It uses pictures of the Depression to reinforce this 170-year old challenge for the American economy. It could be a National Anthem for the credit union movement.
This second arrangement is how a credit union leader like Doug Fecher (former CEO of Wright-Patt CU) might have recorded with his group when presenting his vision.
How credit union CEO’s make this business choice will determine whether the movement can maintain its Cathedral. Or become just another group playing in the casinos of capitalism.
I attended former NCUA board member Todd Harper’s interview with Aaron Kline of Brookings yesterday. Thes session lasted an hour, was recorded and can be accessed here.
When asked why the administration removed the two members, Harper thought the firings were part of a broader strategy to eventually change the Federal Reserve Board before those terms expire.
In the February closed board meetings, he had voted for the staff downsizings that were agenda items on the public April board meeting–which was cancelled.
He had not met with he DOGE people and was not aware of their role in the agency. NCUA legal staff had not provided any advice versus the board removals. Only Inclusiv had backed his suit so far. He expressed disappointment that America’s Credit Unions had taken a “wait and see” approach.
In responding to two questions Harper used prepared data. One topic was the initial findings from NCUA’s call report collection of OD/NSF fees from credit unions over $1 billion. The second was the number of CAMELS code 3, 4, and 5 ratings. In both cases the data was used to support his previous positions. He was critical of fees and asserted staff cuts could increase risk to the NCUSIF. Therefore the need for a higher NOL cap.
In terms of future policy he listed three areas: disclosure of executive pay for FCU’s, paying volunteer board members for dependent care, and revisiting the NCUSIF’s NOL cap.
When asked about taxation of credit unions he said it could impact safety and soundness by slowing the growth of retained earnings/capital. But that Congress wlll decide the issue while noting the Washington state legislature’s proposal to tax state charters which buy banks.
My reaction. The Harper one saw at NCUA, his priorities, selective use of data, and policy justifications were the focus. This may have been due to the interviewer’s questions on areas such as naming rights for stadiums, bank purchases and OD fees.
Harper’s attention was his NCUA policy preferences, not the future of credit unions. There was no rallying cry to fight back on the firings. He is not turning the page either. As he said in response to a question from a reporter, he is not “going off Broadway.”
America is not living in a normal period of federal governmental conduct. Trump’s largest campaign donor ($275 million) Elon Musk was given a non-legislative, non-elected temporary position. Thus informally empowered, his DOGE teams have gone into every federal government and some non-governmental organizations to mandate staff and program cuts.
These cuts and program closures are of Congressionally authorized programs and spending. This is a pure power play with no oversight, accountability or any formal authority.
It is total power without limits. In a democracy those who are appointed or elected to positions of power are called leaders. In an authoritarian government, these individuals are called rulers.
On April 16 President Trump removed the two Senate confirmed democratic members of the NCUA board. Only Chairman Hauptman, a republican whose term ends this August, remains. There was no reason given in the firing email. Sue me if you don’t like it. And both fired members have filed suit in federal court.
The power of both law and precedent suggest this action is illegal. It raises substantive questions about NCUA’s authority and future. The bottom line is credit unions are in a fight for the financial and legal integrity of their system.
Some credit unions will want to wait and see what happens before acting. Others will delegate the burden and pay someone else to chart the way forward. Many will just go on with business as usual. With all the uncertainties in DC the assumption is that NCUA is at best pre-occupied, or at worst NCUA won’t dare buck Trump’s deregulation stance and stand up to credit unions.
One long-time reader suggested another approach: There is no reason to stand by this board, or jeopardize your voice by association. They were neither effective as administrators nor wise enough to see the fog of the last administration. . .
Why not push for the quick organization of a new board and the forward progress it might bring. In the very least be ready to work with this administration and keep the CU agenda clear of the fall out that will follow.
That presumes a democratic, participatory system. That is not what we have as illustrataed by yesterday’s announcement of the larest credit union liquidation in at least six years.
Here are the facts last published by NCUA about this sudden $47 million credit union liquidation announced by NCUA on April 30.
At December 30, 2024, Unilever’s total assets were $ 46.7 million; net worth, $4.1 million (8.95%), virtually no delinquency on a portfolio of which 90% is real estate loans. There are five employees, a single office, and very high average share balances ($29,400) and loans ($58,502), while serving just 1,448 members.
No conservatorship was announced. Instead an immediate takeover with no announced effort to find a merger solution. No facts or explanation for the los was provided except to say the credit union was insolvent. What caused this sudden loss discovery? Why the instant liquidation?
The absence of any facts or reasons for acting suggests another regulatory-supervisory failure that is just being expensed away with insurance funds.
It reminds one of the situation last July when NCUA suddenly discovered that Creighton FCU had lost 20% of its value in the days right after filing its March 2024 call report. The newly discovered loss was approximately $13 million in a $67 million FCU. The credit union was merged with Cobalt FCU. There was no NCUSIF expense. And no explanation of where the money went.
In the Unilever case, Hauptman, a one-person NCUA board, approved the outcome. There is no evidence in support of this action. Zero transparency for the members and the public. This is what one person rule creates. Is Unilever just the first of a series of unilateral decisions by Hauptman?
On April 18, 2025 two days after the two board firings, the agency published an internal staff memo on the current state of the NCUA Board. The memo was unattributed and contained no statements by any NCUA person. It was just an anonymous assertion with these points:
Please be assured that the NCUA has precedent and standing delegations of authority in place to continue performing all operational and statutory requirements under the authority of a single Board Member. No statutory authority, internal legal opinion or other objective fact was provided to support this “assurance.”
In support of this undocumented position, the agency referenced a purported past event:
“During the Bush Administration (2001–2002), Chairman Dennis Dollar acted as a sole Board Member. He held a Board meeting, voted, and took several actions, both administrative and operational. Chairman Dollar recently stated in an article in CU Today, “The records are in place at NCUA from 2002 that clearly establish the precedent that the Chairman can act as the Board.”
This statement is the most problematic of all. Immediately after the board firings, Dennis Dollar called them “unprecedented.” But a day later he claims that his prior tenure is now the precedent to follow this unprecedented event (see same article).
However NCUA presents none of the “records” that Dollar says are in place and certainly references no legal opinion.
What is even more curious is that the official NCUA 2002 Annual Report page 13 states:
Board members confirmed
The highlight of NCUA’s legislative year occurred March 22, 2002, when the U.S. Senate confirmed JoAnn Johnson and Deborah Matz, both serving as interim appointees, to join Chairman Dennis Dollar to complete the three-member NCUA Board.
According to NCUA’s public account, Dollar’s two colleagues were indeed present, serving as interim appointees. There is no mention of his taking any action to set a precedent for one person rule to be followed in the future.
Following NCUA’s circular reasoning in citing a former board member and then that person confirming it is OK to do so, NCUA closes its staff update saying:
“It is the NCUA’s long-held view that a single Board Member constitutes a quorum when there are no other Board Members. Chairman Hauptman and NCUA’s leadership are equipped with the required authorities to continue implementing the Administration’s priorities. . .
The memo asserts an anonymous long-held view with zero factual, no legal reference nor any public prior event where this opinion was expressed. The long held view is an argument made of whole cloth.
One could just have easily asserted that in any organization’s bylaws or chartering authority where a quorum is required, the term presumes more than a single board member is necessary to conduct business. That is a more reasonable understanding of the quorum requirement.
So instead of clarifying Hauptman’s authority as Chairman, Vice Chairman and board member, the three-in-one board situation now, the agency presents a shallow, undocumented explanation to the staff and the public.
The rule of law is at stake. NCUA has become a basterdized agency with no apparent legal grounding. Fire the board and turn the agency into one person rule,
This is the reason for the Unilever FCU unexplained liquidation is so important. For the most consequential action the regulator can take versus a credit union is to put it out of business with no due process or public accountability.
The action was intended to demonstrate we’re really in charge now. It is the largest liquidation in six years or longer. A first example of how the agency now “will ensure America’s credit unions are safe and sound.” And if this arbitrary assertion of power can happen to Unilever FCU, it can happen to any credit union.
Credit unions today are confronting a situation where the entity charged with overseeing the legislation and regulation protecting the system, is itself acting extra-legal, unable or unwilling to even defend its current board status. In other words the agency which enforces the law cannot defend its own legal standing.
Where are the agency’s lawyers so quick to explain the agency’s legislative interpretations? Did they challenge the firings? Brief Hauptman? Were there resignations on principle if there was an obection?
Every NCUA employee took an oath to support the constitution, not a specific person in power. Where are those individuals of courage and character in the agency? Silence is consent. Consent is capitulation. That is the end of the credit union democratic experiment, unless there is a MayDay uprising starting now.
Would your members take time to attend your annual meeting? Is it an occasion the owners look forward to? Will they learn something new? Have a chance to meet board and senior staff? What would the local newspaper or the credit union press write about the event?
Every credit union that has issued news releases or been in the press this past year knows the value of public coverage. The annual meeting is an opportunity to celebrate results, profile the leadership and show respect for the owners who make it all happen.
This weekend in Omaha, NE Warren Buffet will lead Berkshire’s annual meeting. It is a multi-day event for shareholders who travel from across the country and even foreign countries to attend. The excitement and preparations are described in the WSJ article from April 29. The company has sent tickets to over 138,000 shareholders and another 6,000 to non-owners who want to attend the event and pay $5.
The actual meeting is so popular that CNBC will broadcast the event live-in Mandarin and English. The high point will be the initial open-ended Q&A with Buffet and deputies answering questions from viewers and attendees—for hours on end.
This public dialogue always makes headlines as the annual report has been released months earlier. Not just owners, but the general public is interestedd in Buffett’s observations on tariff’s impact, economic uncertainty, the role of America in the world. Viewers will want to know what the company might have in mind with its $350 billion in cash.
Buffett’s annual conclave for individual owners is a long standing show of respect to those millions of small shareholders versus the billions owned by investment companies such as Vanguard or Fidelity. He rewards their loyalty by being with them, talking openly and sharing his leadership approach including succession.
The spirit is that “we are all in this together” and “I work for you.” His approach is an example of a leader accountable to owners and creating a community of shared purpose.
What credit union wouldn’t want this same spirited outcome? But few even try even though the cooperative model presumes this same common interest among member-owners.
One credit union that has attempted to create is own sense of shared accomplishment and celebration is the $160 million Affinity CU in Omaha, NE.
At the annual meeting I attended two years ago there were talks by the state regulator, the President of the Iowa Foodbank as well as the required CEO and Chair reports. Scholarship winners were recognized, there was a free buffet dinner for entire families, prize giveaways and even video of one of the members telling his story.
The meeting included the election. After which all board members, new and old, took their oath of office, in front of the owners.
This was an occasion combining all the elements that make Berkshire’s effort a national news event. It is not an organization’s size and resources that creates owner excitement for this required meeting. Rather it is the measure of leadership’s respect for the owners for whom they work.
The Brookings Institution, a Washington DC think tank, has announced the following event this Thursday:
“Credit union regulation at a crossroads: A conversation with former NCUA Board Member Todd M. Harper.”
Event Details:
Date: Thursday, May 1, 2025
Time: 11:00 a.m. – 12:00 p.m. EDT
Location: The Brookings Institution, Saul Auditorium, 1775 Massachusetts Ave. NW, Washington, D.C. 20036
This is the link to the online broadcast.
On Monday, as reported in CU Today, Otsuka and Harper filed suit in federal court to regain their NCUA board seats.
The full 12-page suit can be found here. One paragraph is especially important right now. This is a statement about the quorum needed to conduct Board business. It reads:
But the Federal Credit Union Act vests the powers of the agency in “the Board,” not in any one individual, with a quorum requiring a majority of the Board. 12 U.S.C. § 1752a(d). And the “agreement of at least two of the three Board members is required for any action by the Board.” 12 C.F.R. § 791.2.
With only a single Member purporting to exercise authority, the NCUA cannot Case 1:25-cv-01294 Document 1 Filed 04/28/25 Page 7 of 12 7 continue carrying out the supervisory, regulatory, and institutional functions that Congress intended to be exercised by a Board composed of at least a majority of its Members.
Despite some agency and other comments, the lawyers assert that a single board member is not a legal quorum to conduct board meetings or other official business.
The lawsuit is clear in its arguments that Trump’s actions are unlawful. But it will take time to see how this legal process plays out, and lots can happen in the meantime.
Here are several areas I hope Harper will address in this week’s public conversation:
Finally, how might credit unions and the public get in touch with your and Otsuka now that your official emails and contacts have ended?
I intend is to attend the event in person this Thursday.
The formal invitation came by mail and read as follows:
TowneBank
Cordially invites you to attend the:
Annual Meeting of Shareholders
Wednesday May 14, 2025 at 9:30 AM
The address for the meeting was the Richmond Convention Center. The invite closed:
Lunch will be served immediately after the meeting
Kindly reply by returning the enclosed card only if you plan to attend
The reply card asked if the attendees would stay for the luncheon. The only required information was first and last name of those attending. There was an addressed stamped envelope to mail the response.
TowneBank is $17 billion in assets with 2,800 employees in 51 branches throughout the greater Richmond, VA area. TowneBank converted from a mutual charter several decades earlier. In that process depositors could buy newly issued shares if interested. My wife converted her savings to stock.
TowneBank’s mission is:
Serving Our Community
Throughout our growth, we’ve never lost sight of our true mission: to continue to be a community asset by serving others and enriching lives.
As a shareholder-owned financial institution, their board’s goal is to provide its owners an acceptable return and ensure trust and confidence in the firm’s leadership. Its invitation is gracious, formal in style and intended to encourage owner participation. It feels welcoming.
The annual meeting of many credit unions conveys just the opposite impression. Member-owners must register in advance to attend the meeting. The event is often virtual only, with no member attendance permitted. The agenda may state as mine did:
Matters requiring a vote
Please note that there is no new business to discuss. The only matter requiring a vote of the members in attendance is approval of the 2024 Annual Meeting minutes.
There is no voting for directors as the board nominated candidates equal the vacancies. No new items or old business will be permitted. There will be a Q & A for questions submitted in advance, and sometimes those added during the meeting.
This was the setup for Patelco’s 2025 virtual annual meeting last Friday. There was much material a member-owner might download at this site. The State of the Credit Union included 46 slides with much information both financial and operational efforts. The 2024 Annual Report is 18 pages of high level summaries, a financial statement (unaudited) and pictures of staff and board.
Patelco’s annual report and CEO meeting update met the letter of the law, but the Friday event lacked any hint of spirit. No celebration, no thank yous to members and carefully scripted to create an impression of a required exercise versus a shared experience with member-owners.
The only section not prepared and sent in advance were member questions. Some were submitted prior and some during the meeting.
The cyber ransom attack was a major disruption in 2024. It was discussed in the CEO’s summary and in the Q & A. New information included an estimated total cost of $64 million of which $37 million was fraud losses caused by some 6,000 members during the outage. Their accounts were subsequently closed. The sale of Visa shares in January resulted in a $35 million gain which helped offset part of the cyber attack expense.
Is the Annual meeting a mere administrative formality to be closely controlled by the organizers? Or, is it an opportunity to enhance member confidence and support for their cooperative?
The meeting ritual can be much more than publishing required data and information. It communicates leadership’s attitude toward their member-owners. Patelco’s approach signals control not mutual responsibility. There were two examples that illustrate this approach.
When asked about the closed election process Chairman Rivera read the formal steps. He said there were no limits to board terms. Two board members’ service began in 1996. As of the next meeting, five more will have served for over two decades. Longevity is certainly an attraction for those in power.
The Chairman carefully avoided addressing the issue of democratic governance for topics such as: When was the last meeting in which there was a contested vote? Ever? Why does the board encourage members submit proxies, thus surrendering their right to vote in board elections? Why are no members allowed to attend in person? How meaningful is the member’s meeting in which all business is conducted with only employees present?
At a time when every segment of the country’s democratic processes seem to be under direct or implied threat, why is Patelco shutting down the democratic practice meant to be the hallmark of cooperative design?
This was a missed opportunity to highlight fundamental cooperative governance.
The second reason for engaging members is that this is the source of the movement’s political power. Credit unions cannot out spend political funds or have enough lobbyists to rely on traditional forms of political influence. It is members voting their self interest that will secure credit union success in DC.
Three questions touched on national topics. One was whether Patelco was safe and sound at this moment, referring to bank problems. A second asked about possible threats from a government agency. The CEO’s response interpreted the question as referring to credit unions’ tax exemption.
And the last question of the evening: After President Trump fired two of the three NCUA board members—does this threaten our deposit insurance? CEO’s answer paraphrased: Your deposit insurance is not threatened, the NCUA board is reduced from three to one member but can continue to take the actions it needs to; your insurance is federally backed.
These questions referencing the external environment (taxation, NCUA board firings, bank uncertainties) were an opportunity to educate and prepare members for their critical role in countering these threats. It was the moment to rally the members with straight talk. Instead general assurances that everything is OK were given.
To suggest taxation is a just another banker’s campaign is to overlook the entire current context. True as always, but that is not what is going on that makes this a potential opening now. The response that the firing of two NCUA board members means “business as usual” at NCUA and the NCUSIF, is ill informed or naïve.
Both questions were an opportunity to remind members about credit union uniqueness and why there is a federal tax exemption—the purpose and role of cooperatives in a capitalistic market place. More vital, this purpose is regulated by a unique dual chartering framework. That system includes insurance fund options that require 1 cent of every member’s savings dollar be sent to capitalize their special cooperative fund.
To blithely assure members their fund and NCUA function like “business as usual” is to misstate the whole intent behind the board’s two removals. Moreover, the question of NCUA’s single member board authority is anything but settled.
If this is indeed the view of Patelco’s leadership about DC events, they need to do some homework. More importantly, their power to address these topics will rely on member awareness and the ability to rally their engagement when needed.
Credit unions are different by design until those who lead them cease to believe in that difference.
TowneBank believes in courting and encouraging shareholder engagement. They talk the same language as credit unions about community and customer support. But they back that community spirit up with invitations and hospitality.
Patelco’s actions speak much louder than the many pages of charts, numbers and operational activity in prepared reports. The annual meeting is not a member’s final exam for the prior year. It should be a celebration of mutual progress.
There has never been a time when acting to support democratic values and practice has been more vital. Credit unions should be leaders in this affirmation of member-ownership and governance. Without this effort, credit unions will increasingly be perceived as just another example of self-perpetuating oligarchy at work.
Yesterday I was invited to participate in a Yoshino cherry tree planting. The occasion was to recognize Callahan & Associates’ 40th anniversary (founded April 1, 1985).
The site was on Haines Point a long stretch of land between the Potomac and Anacostia rivers in the District.
There were almost a score of Callahan employees there to celebrate this four decade milestone. The tree is a symbol of the natural growth the firm projects for the future.
I was asked to turn the first shovel.
Then the staff all joined in.
A fun event, in a lovely park with people dedicated to keeping the credit union spirit alive.