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.
Events in Ukraine move in and out of the American news cycle, and our attention, depending on multiple other daily events.
But for Ukrainians total war is a constant reality that affects all aspects of life. The country is in a fight for its existence. Life and death decisions are faced daily for everyone.
In a fight between an authoritarian dictator in Russia and a country’s whose people want self-determinatin, the outcome will depend on people’s morale, not just who has more weapons or manpower.
How does one learn about this critical factor? What is Ukraine’s morale, its peoples’ confidence in the increasingly difficult political, military and everyday uncertainties all endure?
Two recent posts suggest the resilience of the Ukrainian nation is everywhere.
The first is a brief FaceBook post from a Christmas concert which celebrates the country’s music, culture and faith in the midst of war.
The concert did not go as planned. A Russian attack on the power grid shut down electricity in the middle of the event.
The short Facebook video below shows what happened next. The Ukrainian words state: “There was a power outage right in the middle of the concert, but the choir didn’t skip a beat and kept on going in the dark.”
In this one minute excerpt note the orchestra and chorus continue to play. But not entirely in the dark. Because the audience raises their mobile phone lights to make the concert hall still visible.
People uniting to bring light when darkness threatens.
(https://www.facebook.com/reel/1152383956497057)
Caolin Robertson was a London-based investigative journalist who moved full time to Ukraine to cover the conflict . He explaines his reasons in this brief video, Why I Moved to Ukraine. . . for Good.
(https://www.youtube.com/watch?v=Ja6EzWrfg-w)
As mainstream foreign media coverage is at best intermittent and often prompted by external actors-Russia, the US and Europe-Caolin chose to be on the ground full time.
His latest video is one of the best reports on the current state of the war as seen by soldiers and civilians living at the center of the conflict in Donbas.
Filmed last summer it includes live interviews with middle age soldiers in bunkers who have been in combat for almost four years. Young couples and older residents are forced to leave their homes. The destruction of cities and towns is total.
The production is superb, the story is current and intermingled with video of what these Ukrainian towns looked like prior to the 2022 Russian invasion.
One of the themes in his interviews is the deep, storied and unique history of the Donbas, This is the area that Russia wants kiev to hand over as a condition of any ceasefire. And one part in the Trump administration’s so called peace plan.
His interviews weave current events with history which makes this sory even more meaningful and tragic.
While 44 minutes might seem long, I believe it will keep your attention once you start. For it shows people willing to persevere and fight no matter what the current cost in life and fortune.
Fpr a future of freedom there is a deep and profound price today. A message the world should know and support whenever freedom anywhere is threatened.
(https://www.youtube.com/watch?v=Jq2RTlhvqbc)
To demonstrate the cooperative difference, some credit unions plan sending bonus dividend and loan interest refunds to members at year end.
Yesterday I read in one CEO’s staff update that they were doing well enough to have accrued a minimum of $10 million in special distributions for savers and borrowers.
Here is an example of an announcment in which Robbins Financial CU is sending members $20 million. The special rebate program is to reward members’ loyalty and to demonstrate the credit union’s financial strength.
However credit unions are not the only financial firms which provide “members” with refunds, rebates or special dividends. The following are excerpts from a large mutual, insurance and investment firm which competes directly with credit unions.
Record Amount Underscores Association’s Commitment to Military Families
San Antonio, TX – USAA members are receiving approximately $3.7 billion in financial rewards in 2025 — the largest amount returned to members in USAA’s 103-year history. . .
The announcement follows USAA’s initiative to provide its members with nearly $450 million in zero-interest loans, payment extensions and fee waivers during the recent government shutdown.
In November, the Association also launched Honor Through Action, a five-year, $500 million initiative to support military family resiliency by bringing together public, private, and nonprofit partners to drive systemic change around three key pillars: meaningful careers, financial security, and overall well-being.
“We are committed to putting our members at the center of all we do and every decision we make,” said Juan C. Andrade, President and CEO of USAA. “Sharing our financial results with our members reflects our responsibility to deliver strong value and exceptional service for the military community. We are taking action every day to help keep costs down and protect the long-term value of membership. . .”
This record amount in financial rewards is possible because of USAA’s financial discipline, . .It is also a result of proactive steps USAA and members have taken to prevent losses.
“Ensuring our members benefit from our financial strength is critical.” Andrade added. “We will continue to push for reforms that address the broader factors increasing insurance costs for consumers.”. . .
The person who sent me thlis information added a calculation for his home state of North Carolina:
Why this matters for North Carolina:
Members in North Carolina will receive an average of $200, depending on their policies and location, as a bill credit or money back based on the member’s preference.
Good ideas do not take long to replicate. Especially when customers are treated as members.
Do credit unions really need to retain an average of over 11.0% retained earnings when the well-capitalized goal is 7%?
The largest credit union conference ever held to this point in time began gathering on Sunday, December 9, 1984 at the MGM Grand Hotel in Las Vegas.
One of the most amazing aspects was that the entire effort was organized and led by NCUA. It was an event unique then, and still today, in credit unon history.
The conference had two phases. In the first two and one half days over 800 state and federal examiners and regulators held meetings to share their learning and expertise. On Wednesday afernoon they were joined by over 1,500 CEO’s/seniorexecutives, board members and leaders of multiple league and trade organizations.
An NCUA Led Effort
Two months prior in October, NCUA released a Video Network Edition XI for state and federal examiners to describe conference logistics: timing, travel arrangments, financial reimbusements and per diem. And most importantly, a preview of the speakers and conference agenda.
The National Examiners Conference preparation video is 20 minutes and can be viewed here or in the link below. The eight speakers are all NCUA DC staff members responsible for specific areas of the conference.
The details may seem pedestrian by today’s conference attendee. The room rates were only $35 per night for single or double. These critical instructions show NCUA staff at its hard working best.
The Agency’s Washington team organized a national industry wide meeting led by only existing personnel. At the time the Agency employed approximately 600 people. This special event was in addition to the entire staff’s day jobs.
According to the NCUA’ 1984 Annual Report there were 10,547 active federal charthers and 4,657 insured state charters, plus another 1,500 whose share insurance was from a state authorized cooperative fund. Moreover, all FCU’s were being examined annually, a process implemented in 1982.
Following six short briefs on conference logistics, at minute 14.21 a presentation of the “most important part of any conference” begins. Joan Pinkerton, NCUA’s Public Information Officer, gives an overview of the conference speakers and over 50 breakout sessions.
Topics include: Is the Regulator Obsolete?, How the Early Warning System (EWS) Rating is Assigned, Recent Industry Scams et. al. At minute 17 Mark Wolff describes real case studies that will be discussed in joint examiner-attendee sessions. The case details of up to 25 pages will be available to read in advance.
The conference succeeded beyond all expectations. It was both a learning and bonding event. Next Monday I will publish Edition 18 of the NCUA’s Video Network, 55 minutes of live excerpts of the conference highlights.
Even today, some 41 years later, the event is still remembered as a special moment enabled by the collaborative character of the credit union system.
If you would like to share your memory, please send a short post to chipfilson@gmail.com. I will include these along with the video and photos of the conference.
(https://youtu.be/Tw_JKnheoSk)
Another December 9, 1984 Event
On Saturday October 8 NCUA colleagues Bucky Sebastian and Mary Beth Doyle stopped by the house to drive me to Dulles where we would fly to Vegas for the conference.
Mary Ann and I had been married for 17 years. Our first date was my senior year in college at the Harvard-Princeton football game. I had been expecting to go with her younger sister whose flight from Midland, MI was canceled due to snow Mary Ann took her place.
We married 18 months later in a service at Merton College Chapel, Oxford, where I was a student and she worked in London for Dow Chemical’s UK office.
We traveled the world together, first courtesy of Uncle Sam who said I owed him some time. Our first daughter, Lara, was born in Athens, GA while I was at Supply Corps School. Our second, Alix, was born in Yokosuka, Japan where I served as Supply Officer on the USS Windham Cty (LST-1170) and later at the Supply Depot on shore duty.
After four plus years in the Navy, in December 1973 I joined the International Division of the First National Bank of Chicago expecting a two year rotational training period. Six months later our family was in Sydney, Australia. I was in the bank’s rep office and assisted with their wholly-owned finance company FCAL. It was a time of critical economic turmoil, short term rates were over 20%. They wanted help working through the crisis in FCAL’s loan portfolio.
After three years, we returned to Chicago. I left the bank to work with Bucky Sebastian and Ed Callahan in the Illinois Department of Financial Institutions (DFI) where I was credit union supervisor. Five years later we moved to Bethesda as the three of us joined NCUA.
In these 17 years Mary Ann was critical to everything that life brings to a family. She not only had the primary care roles with our two girls, but also worked a full time job where possible.
Her talents for maintaining home life while I was traveling, expanding her interests in photography, design and working with her hands in the kitchen or the sewing room are habits both girls adopted. She was disciplined, but in a very soft way, always sensitive to others’ needs.
I am grateful our two children inherited all the good she gave them which they express every day.
She had an adventurous streak as well. Once we pulled into Hong Kong harbor on R&R. Mary Ann and several other wives flew from Japan to see us. Our LST anchored in the harbor. The city was still under British rule. The Navy purchasing office would first send out local supply boats to refill our fresh water tanks and order fresh food supplies.
As I stood on the deck waiting to give our purchase order to the local vendor, I saw the small harbor craft had an extra passenger. Mary Ann didn’t wait for us to come ashore via the harbor’s water taxis. She came out, on her own, in the middle of the harbor to welcome the whole ship. It was just plain joy as she came on deck. The Captain was a little uneasy with this protocol breach, but never said a thing.
In the picture below, Mary Ann with Lara and Alix are on on the beach in Hayama, Japan. Fuji is faint in the distance. It is the fall of 1971.
Mary Ann’s mother had flown in to help while I spent the week at NCUA’s Examiner Conference. Early Sunday morning I got a call from her mother that Mary Ann had gone to the hospital that night and died. Her five year fight with breast cancer was over. I flew home that morning. Our 17 year journey together was over.
Now go back to the 14th minute of the video above and see Joan Pinkerton. For in 1987 we were married. She knew Mary Ann and had even babysat our girls when we traveled together. Life is full of possibilities even when some hopes end. Joy can still be found.
From Aesop’s fables to the present day, writers have used animals to portray the failings of human society.
Animal Farm by George Orwell in 1945 used the metaphor of animals living together in a farmyard to illustrate a political point. HIs thesis is that power inevitably corrupts.
This inescapable temptation leads to the betrayal of democratic ideals and the re-establishment of totalitarian rule. An outcome enabled by a naive and accepting working class.
Orwell’s story is an allegory of the 1917 Russian Revolution and the rise of Stalinism. Putting his dialogue in the mouths of animals was an inventive way to show how authoritarians manipulate language to justify their ends.
Ten years ago a credit union observer/CEO used this political satire to describe deeply troubling trends in the coperatie system.
The blog’s title: Down on the Farm.(Be sure to click read more for the writer’s ending challenge, Who Let the Pigs In?)
In these prior stories the pigs are the bad guys. The credit union commentator and Orwell hoped their literary skills would motivate readers to address threats both foresaw to democratic societies.
But human nature doesn’t always respond to danger until it arrives on their doorsteps.
Today’s retelling is not on the farm, but in the jungle. Here the wild animals have no fences or guardrails. They can only be viewed at a safe distance by safari tours. It is nature in its most natural state.
In this film metaphor, those who feast on other living kindred are the lions. Their prey are large herds of water buffaloes living on grass plains, at peace with their kin. They do not kill to live. The game wardens and tourists who witnessed these scenes are observers or, in this parable, clear stand ins for regulators and the public.
Part one is just over four minutes. The stealth approach, the pack attacks and captures a small defenseless youngster. The helpless calf is thrown into a river, where two crocodiles decide the prey should be theirs, not this land bound pride’s.
The action is quick. The situation dire. The calf’s fate seems sealed. All the onlookers agree this is a hopeless situation. Another successful kill. Moral outrage, anger and even sympathy provide no recourse. This is the law of the jungle in full view.
(https://youtu.be/WXJmvlIckfI)
The calve’s life is over. The lions lay down to savor their feast. No help can come now. It is far too late and certainly life-dangerous to interfere. The end has come. . . or has it?
Here is part two. Also just four minues.
(https://youtu.be/u1Rt17QglXY)
The adults in the herd, those who cared about their offspring and know the ways of the jungle acted-on the spot
After initially running away, they regrouped, collectively, and attacked. They first circle and then go after the herd’s predators one at a time. Angry bulls leading the charge. They then cleared the killing field of any stragglers.
The onlookers are amazed. Even the safari wardens say they have only seen this on film. While unusual the response is not unknown. It’s instinctive when one’s entire future is at stake.
The response of the water buffalo herd, is what Orwell and Jim Blaine hoped to arouse with their Animal Farm prose imagery.
In this film allegory, these animals understand how to deal with their stronger predatory jungle inhabitants. If they can work to protect each other, it would seem credit union leaders should be able to turn back their avaricious members feasting on their coop peers via mergers.
In most credit unions, mergers are a matter of life and death of the organization. If you don’t think so, just ask any of the 41 credit union leaders merged in the third quarter of 2025. Oh, you can’t because they are now under someone else’s control.
It’s time for the cooperative herd to act. If not, only the pigs and lions will be the future of the movement.
This annual secular homily is Buffett’s last as CEO. It is eight pages filled with reminisces, friendships and observations. At 95, his perspective of life’s lessons has universal relevance.
I have added the subheads and boldings to the excerpts below.
In 1985, when Don was president of Coke, the company launched its ill-fated New Coke. Don made a famous speech in which he apologized to the public and reinstated “Old” Coke. This change of heart took place after Don explained that Coke incoming mail addressed to “Supreme Idiot” was promptly delivered to his desk. His “withdrawal” speech is a classic and can be viewed on YouTube. He cheerfully acknowledged that, in truth, the Coca-Cola product belonged to the public and not to the company. Sales subsequently soared.
Can it be that there is some magic ingredient in Omaha’s water?
I lived a few teenage years in Washington, DC (when my dad was in Congress) and in 1954 I took what I thought would be a permanent job in Manhattan. There I was treated wonderfully by Ben Graham and Jerry Newman and made many life-long friends. New York had unique assets – and still does.
Nevertheless, in 1956, after only 1½ years, I returned to Omaha, never to wander again. Subsequently, my three children, as well as several grandchildren, were raised in Omaha. My children always attended public schools (graduating from the same high school that educated my dad (class of 1921), my first wife, Susie (class of 1950) as well as Charlie, Stan Lipsey, Irv and Ron Blumkin, who were key to growing Nebraska Furniture Mart, and Jack Ringwalt (class of 1923), who founded National Indemnity and sold it to Berkshire in 1967 where it became the base upon which our huge P/C operation was constructed.
Our country has many great companies, great schools, great medical facilities and each definitely has its own special advantages along with talented people. But I feel very lucky to have had the good fortune to make many lifelong friends, to meet both of my wives, to receive a great start in education at public schools, to meet many interesting and friendly adult Omahans when I was very young, and to make a wide variety of friends in the Nebraska National Guard.
In short, Nebraska has been home. Looking back I feel that both Berkshire and I did better because of our base in Omaha than if I had resided anywhere else. The center of the United States was a very good place to be born, to raise a family, and to build a business. Through dumb luck, I drew a ridiculously long straw at birth. . .
But Lady Luck is fickle and – no other term fits – wildly unfair. In many cases, our leaders and the rich have received far more than their share of luck – which, too often, the recipients prefer not to acknowledge. Dynastic inheritors have achieved lifetime financial independence the moment they emerged from the womb, while others have arrived, facing a hell-hole during their early life or, worse, disabling physical or mental infirmities that rob them of what I have taken for granted. In many heavily-populated parts of the world, I would likely have had a miserable life and my sisters would have had one even worse.
I was born in 1930 healthy, reasonably intelligent, white, male and in America. Wow! Thank you, Lady Luck. My sisters had equal intelligence and better personalities than I but faced a much different outlook. Lady Luck continued to drop by during much of my life, but she has better things to do than work with those in their 90s. Luck has its limits. . .
Father Time, to the contrary, now finds me more interesting as I age. And he is undefeated; for him, everyone ends up on his score card as “wins.” When balance, sight, hearing and memory are all on a persistently downward slope, you know Father Time is in the neighborhood.. . .
Fortunately, all three children received a dominant dosage of their genes from their mother. As the decades have passed, I have also become a better model for their thinking and behavior. I will never, however, achieve parity with their mother . .
I have assured my children that they do not need to perform miracles nor fear failures or disappointments. These are inevitable, and I have made my share. They simply need to improve somewhat upon what generally is achieved by government activities and/or private philanthropy, recognizing these other methods of redistribution of wealth have shortcomings as well.. .
During my lifetime, reformers sought to embarrass CEOs by requiring the disclosure of the compensation of the boss compared to what was being paid to the average employee. Proxy statements promptly ballooned to 100-plus pages compared to 20 or less earlier.
But the good intentions didn’t work; instead they backfired. Based on the majority of my observations – the CEO of company “A” looked at his competitor at company “B” and subtly conveyed to his board that he should be worth more. Of course, he also boosted the pay of directors and was careful who he placed on the compensation committee.
The new rules produced envy, not moderation. The ratcheting took on a life of its own. What often bothers very wealthy CEOs – they are human, after all – is that other CEOs are getting even richer. Envy and greed walk hand in hand. And what consultant ever recommended a serious cut in CEO compensation or board payments?
Greatness does not come about through accumulating great amounts of money, great amounts of publicity or great power in government. When you help someone in any of thousands of ways, you help the world. Kindness is costless but also priceless. Whether you are religious or not, it’s hard to beat The Golden Rule as a guide to behavior.
J write this as one who has been thoughtless countless times and made many mistakes but also became very lucky in learning from some wonderful friends how to behave better (still a long way from perfect, however). Keep in mind that the cleaning lady is as much a human being as the Chairman. . .
I wish all who read this a very happy Thanksgiving. Yes, even the jerks; it’s never too late to change. Remember to thank America for maximizing your opportunities. But it is – inevitably – capricious and sometimes venal in distributing its rewards.
Choose your heroes very carefully and then emulate them. You will never be perfect, but you can always be better.
by Will Rogers, Jr.
It takes a special kind of Washington brilliance for a regulator to decide the greatest threat to the republic is its own discretion and then propose a rule to rescue us from itself. But here we are.
The NCUA has unveiled a proposal that essentially says: “We hereby forbid ourselves from misbehaving. We don’t trust ourselves either.”
In a normal world, regulators create guardrails for the people they regulate. Only in our nation’s capital does an agency build guardrails to keep itself from driving off the road.
The Rule’s Premise: Reputation Risk Isn’t Real
This proposal seems to assume that reputation risk is some imaginary creature—like Bigfoot, or a cheerful airline fee.
One wonders whether the drafters have heard of a quaint little story called Wells Fargo, where an institution spent years rebuilding trust after opening millions of fake accounts. But perhaps NCUA thinks that was all just a marketing misunderstanding.
If the agency truly believes reputation risk is fictional, one hopes they never Google “NCUA failures” or, heaven forbid, read their own Inspector General reports.
Who Exactly Is Being Protected Here?
The proposed rule claims to stop NCUA from pressuring a credit union to decline accounts for certain businesses: liquor stores, cannabis operations, burlesque venues, adult-film producers, and so forth.
One might ask: Has this ever happened? Even once? Anywhere?
No.
This is Washington’s favorite sport: solving imaginary problems so it can avoid the real ones.
Meanwhile, the real harm that does exist: merger-driven CEO enrichment, member disenfranchisement, sham elections, and sending member savings to buy bank shareholders’ at premiums, goes unaddressed because someone must ensure the men’s club dancers of America are free to open checking accounts. The republic is safe.
The Greatest Burden: Fixing What Isn’t Broken
Fixing real problems is difficult. Fixing imaginary ones is far easier, and far more wasteful.
Rules like this drain time, staff attention, and credibility. Worst of all, they distract the agency from the issues actually hurting members:
But at least NCUA has now protected the nation from the nonexistent threat of ideological debanking.
Reputation Risk: It Exists (Even if NCUA Pretends Otherwise)
Reputation isn’t a theoretical construct. It is the currency of leadership.
It evaporates when leaders substitute ideology for competence.
It collapses when institutions forget who they serve.
It disappears when regulators look the other way, or worse, when they look inward and pass rules to restrain what they themselves might do.
If NCUA doubts that reputation risk is real, a previous post about NCUA’s morally incompetent General Counsel and Chief Ethics Officer has already written the case study for them: A Culture of Impunity, a chapter the agency should revisit with a box of tissues handy.
The Real Absurdity
This proposal doesn’t make the agency strong. It makes it look frightened. afraid of its own staff, its own judgment, and its own shadow. It solves a problem that does not exist, while ignoring several that are eating the system alive.
Proposing this in order to curry favor with ideological overseers does not enhance NCUA’s standing. It diminishes it. It invites laughter in all the wrong places.
A Modest Suggestion
If NCUA wants to improve its reputation, there is a simpler way than pretending reputation risk doesn’t exist: Let this rule die quietly. Slip it into a drawer. Close the drawer. Lose the key.
As Will Rogers, senior advised: “Never miss a good chance to shut up.”
Yesterday I posted a 3,000 word analysis of the proposed merger of Spirit Financial in Levittown, PA with Credit Union 1 headquartered in Lombard, IL.
Included in the analysis are the reactions of two Spirit members from NCUA’s website:
Member Brian Stuart comment: I am voting against the proposed merger of Spirit Financial Credit Union with Credit Union 1. Credit Union 1 is based in Lombard, Illinois. All of its branches are in Illinois. There is no advantage to the Spirit Credit Union member to merge with Credit Union 1. Merging with Credit Union 1 would take away the local Bucks County focus of Spirit Financial Credit Union, which should be its mission. . .
Member Joann Glasson: As a long-time member of Spirit Financial Credit Union, I am sad to see this merger occur when the CD rates are so much lower at Credit Union 1 and the loan rates are so much higher at Credit Union 1.
We are retirees with large deposits at Spirit that we will be forced to move if the merger is approved. This merger is not a service to the members of Spirit Financial Credit Union
Due to the article’s length, I sent the following summary to the press:
$9 MILLION IN LEVITTOWN COMMUNITY WEALTH TO BE GIVEN AWAY – CREDIT UNION CEO WOULD RECEIVE $4.4 MILLION
Spirit Financial Credit Union, a strong and profitable 72-year-old community institution, is being absorbed by Credit Union 1 of Illinois (pending a member vote) and in the process, Levittown’s families will lose nearly $9 million in community-built capital, while Spirit’s CEO personally will walk away with more than $4.4 million in payouts and benefits. Member balloting on this proposal ends Dec. 22.
Spirit Financial isn’t struggling — it is thriving:
Yet in a quiet, opaque merger, every dollar of the members’ accumulated equity of approximately $9 million will be transferred to an out-of-state institution for free:
Levittown’s families built this wealth, and now it’s about to go away.
Meanwhile, the Spirit CEO who championed the merger receives:
Community wealth will be removed, assimilated, and relocated, while ordinary member-owners will be left with nothing.
Control of Levittown’s financial legacy will shift to a board in Illinois that is unreachable, unelected, and governed by mechanisms that dramatically limit member democracy.
This is not an isolated incident. Credit Union 1 has initiated over 20 such mergers in just 3½ years, importing hundreds of millions in community assets and capital and using merger accounting to mask weak operating earnings while expanding its asset base by taking over independent, strong local credit unions.
This development raises urgent public questions:
If this were a stock corporation or public company, shareholders would be compensated, and regulators would not tolerate uncompensated transfer of equity. But cooperative members will receive no payout, no recourse, and diminished legal standing.
The problematic trend in credit union mergers are well documented:
Mergers have placed the structure and character of the cooperative system at an inflection point. To understand the extent of the continuing appropriations of members’ capital and the closures of their independent charter, is best illustrated with a simple example. One that has been replicated by a single credit union merger-predator over 20 times.
Spirit Financial Credit Union (Spirit) is a $70 million, single office coop located in Levittown, PA (pop. est. 50,000) in the Philadelphia metropolitan area. It is known as the first large-scale, mass-produced suburb of post-WW II America,
Chartered in 1953 as Fairless Employees Credit Union, its primary membership was serving employees of the United States Steel Corporation. The charter changed to a community FOM for Bucks County in 2005. The name was changed to Spirit Financial in 2016 to reflect “our vision of helping this diverse community to achieve personal financial growth throughout all stages of life.”
Its mission: “we want to be your trusted financial partner to help you achieve your financial goals. . . We are dedicated to building lifelong relationships with our members and to making a difference in the lives of the people we serve.” (from website)
While two credit unions and several banks have branches in Levittown, Spirit is the only locally owned and controlled depository institution headquartered there.
At September 30, 2025, Spirit’s call report reported the following: $30.8 million loans (75% real estate secured), $59.7 million shares, $0 borrowings, and over $9 million in equity for a 13.2 % net worth/capital ratio. For the first nine months, the net income was $365K for an ROA of .70%.
This bottom line is due in part to an operating expense to average asset ratio of just 2.72% or one whole percentage point lower than its peers. There are nine full-time employees earning an average annualized salary of $78K each. With delinquency of only .39%, this credit union has rock solid financials. Its history and track record make it an invaluable resource for the community’s future.
This coop is a five-star example of what a credit union can be. Services include all transaction accounts, certificate rates around 3.75%, home and auto insurance, and safety deposit boxes. The credit union provides all online transaction and statement options, mobile text messaging and alerts, free FICO scores and a chat bot. The lending options include all personal loans, auto and RV financing and a complete mortgage line including HELOC and smart equity refinancing. These product and services are available in person or in virtual channels via home banking.
On October 14, 2025, the 3,800 members were sent a Notice of Special Meeting to vote on merging this 72- year-old, single location credit union with the $2.0 billion Credit Union 1 (CU 1) headquartered in Lombard, IL, some 800 miles and over 15 driving hours away.
Given this credit union’s three generations of home-grown loyalty, its status as the only locally owned and operated financial institution, its full-service offerings and solid financial performance under local leadership, there is just one question: WHY should member-owners transfer all their funds and future to unknown leaders with no connection or even knowledge of this community? Why should strangers be given the keys to this credit union’s opeations in Levittown?
The official member meeting Notice discloses no specific loan, share or fee improvements from the merger that members do not already have. All nine listed “reasons for merger” are so general as to be meaningless, eg. “continued investment in the latest technology.” The nine reasons are identical, word for word, to three other mergers CU 1 is currently undertaking in a 30-day period around Spirit’s member vote.
In fact, Spirit’s Notice omits one section that is in these other merger explanations titled “Changes to services and Member Benefits.” This omission suggests there are none to be gained.
There is zero evidence that Spirit’s Board and CEO conducted any due diligence of CU 1’s track record. Or its leadership considered other credit union alternatives in the immediate area—if it truly believed a merger should be an option. These would be minimal requirements to fulfill their fiduciary duties of care and loyalty to the member owners of Spirit.
The key question is what is motivating this takeover? There is one detailed explanation required by NCUA’s merger rule. These are in the Merger Related Financial arrangements which provides an answer.
David Obarowski joined the credit union as CEO April 2017. Prior to this he was EVP/Chief Operating Officer of TruMark Financial Credit Union, a $3.4 billion coop with 24 Pennsylvania branches and head office is in Fort Washington.
In just over eight years as CEO, this merger “sale” will provide him with the following financial benefits listed in the Notice :
The total immediate financial benefit to CEO Obarowski is a minimum of $4.450 million plus additional bonus incentives. In only eight years as CEO in thia 72-year credit union, he has garnered a very golden parachute.
The termination of Spirit’s charter will give him between two and three times the total salary he earned as an 8-year CEO. It is equal to almost half of the Spirit’s total net worth.
Five other Spirit employees will receive annual salary increases as high as $18,172 and retention bonuses of $6,177. The salaries are to “align with that of similarly situated employees of the continuing credit union.” The CEO and five of the other nine employees receive immediate bonuses and salary raises.
The members whose loyalty and resources built the credit union receive nothing from their 72 years of common ownership and support.
The 3,794 owners’ entire savings, loans, investments and over $9.0 million of net worth is transferred to the complete control of CU 1. This is an institution about which they have been given no specific information about its business model, track record from other mergers or any descriptions of its leadership.
First, Spirit members should understand that as an Illinois state charter, post-merger, the CU 1 board controls all the decisions made by the credit union.
All other charters, state or federal, ensure members can vote for in nnual director elections and most critically on the issue of merging. Under an Illinois charter, members will be requested to give their voting power via proxy to the board. This is for all corporate decisions.
The result is that the board which controls all proxies, is self-perpetuating and not subject to the democratic process of one member one vote as in all other charters.
In Spirit’s case, members have no information that would enable them to make an informed decision about their future with CU 1. By law and regulation mergers that close a chater are so critical that all members, each with one vote, must decide the issue. But they have been left in the dark about what is really happening and especially CU 1’s business practices.
The official Notice provides only general phrases under the Reasons section of CU 1’s business priorities. Spirit members are given just two items of specific data. There is a geographic listing of all CU 1’s branch locations and a June 30, 2025 summary balance sheet and income statements with three performance ratios. There are no concrete facts to suggest these offer any benefit to the owners of Spirit.
Both sets of fact raise questions why Spirit would want to be a part of this ever-expanding coop conglomerate. CU 1 lists 41 branches operating in ten states. In six states there is just one branch. Spirit is the only location for PA, a presumption as members have yet to vote.
The relevant question is, do any of these other 40 locations in scattered throughout Illinois, Minnesota, North Dakota or Las Vegas provide any location benefit for Spirit’s members? Moreover, this widely dispersed branch network suggests operational priorities and services will be standardized, not tailored to specific communities’ needs.
Just as the salaries of the Spirit employees will be conformed post merer, it is likely that all operational procedures take precedence over local competitive circumstance or legacy services. For example, Spirit’s safe deposit boxes are a less common service for most financial institutions. Will Spirit members lose theirs?
The primary conclusion one draws from the June 30 financial numbers in the Notice is that Spirit is in a significantly stronger position at $70 million than the $1.9 billion acquirer. Spirit’s net worth is 30% higher at 12.5% versus 9.56% at CU 1. The delinquency is one-fourth of that of CU 1 at .30% versus 1.24%. And Spirit spends less of its revenue on operating expenses at 61% versus 68.5% for CU 1. On fundamental measures of financial strength in the Notice, Spirit is markedly superior.
But a snapshot at one point in time does not begin to show the questionable financial strategy of CU 1. On October 2024 I published an analysis What to Do When Credit Unions Go Rogue? examining its business model and financial performance. Here are excerpts from one year ago:
“The core of Credit Union 1’s growth efforts are mergers. The operational intensity of acquiring and converting 11 credit unions (six outside Illinois) and all associated member and vendor relationships in just over two years would be a major operational challenge for any organization. The immediate question is how will the members of the merged credit unions benefit?
Additional details frpm that article: The $12 million Synergy Partners CU, Chicago announced on October 17 a members’ vote to merge with Credit Union 1. That would increase to 11 total mergers in only two and one-half years. These will transfer over $650 million in total assets and over 62,000 members’ financial futures to Credit Union 1’s control.”
Since that October 2024 analysis, CU 1 has announced another ten member votes of which over half are now approved and consolidation underway.
To succeed in this ever expanding acquistion campaign, the process is standardized with almost identically worded Member Notices. In these diverse combinaations, CEO’s are given big bonuses, extended “employment” contacts (ten years in one case) while the members receive nothing. Spirit’s case just replicates these previous acquisitions.
My prior analysis suggested that CU 1 is a financial house of cards. For without these external financial boosts, it would have a declining balance sheet. It shows no organic growth from existing assets. Its operating net income depends on merger gains in multiple ways: gains from the sale of buildings, loans and other assets acquired, equity added in mergers, and negative goodwill, that is the “excess of net worth” when assets are revalued at the combination.
In its September 2025 call report, CU 1 posted net income of $4.6 million for an ROA of .only 29%. However as reported in the report’s detail, $4.4 million of income was from gains on sale of loans and gain from bargain purchase in mergers. More critically, net worth has been increased by $48.3 million from equity acquired in mergers. That is the capital reserves from other credit unions’ owners who received zero to transffeer of their common wealth to CU 1.
In the first nine months of 2025, CU 1’s net worth has had no increase from operating income. Retained earnings have fallen by $8 million even when including non-operating income gains. It is only the acquisition of $48.3 million pf other members’ collective equity that CU 1 has been able to maintain its net worth at 9.6% after adding $421 million more in merged assets.
In simple language other credit unions’ member owners are payng CU 1 to take over their opersions for free and whose assets are essentail to maintain CU 1’s own financial standing.
This is a cooperative Ponzi scheme. It takes the collective capital from the member-owners of merged credit unions and pays them nothing. CU 1 is unable to achieve an operating net income from the assets it manages. Without the extraordinary gains from these “free” wealth transfers CU 1 would be showing operating losses.
The increase in its balance sheet is just consolidation not market growth. A consolidation fueled by incenting other credit union CEO’s and boards to hand over their entire operations and net worth in exchange for personal benefit payments as described in Spirit’s case.
These mergers are a graft of member assets initiated by those in positions of power and responsibility. It takes two parties to do these deals, one to intiate and the other to accept the personal benefits for giving up their stewardship of their member-owner s’ financial asssets.
CU 1 has initiated over 20 of these acquisitions. The graft isn’t just of credit union members’ financial wealth but of each credit union’s long standng role and contribution in serving their communities..
In Levittown, the community loses its only locally owned financial institution, control over the use of its residents’ savings and future lending priorities as well asd local leadership. The post-merger pattern in CU 1’s consolidations is to slowly liquidate buildings and land for gain, close branches, lay off employees and convert as many members as possible to virtual status. The benefits of local presence and relationships are terminated.
All these takeovers are cloaked by a PR patina of CU 1 promotional endorsements, stadium and venue naming rights, sports team affiliations and market publicity in areas sometimes with no connection to its branch locations. For example the recent increase in Mountain West Basketball promotional support are for a conference in states in which the credit union has one branch so far.
Prevously employed CEO’s who received extended employment contracts, but are no longer in a CEO role, are encouraged or incented to entice other credit union CEO’s to follow their example..
The Spirit board and CEO have transferred their member-owners to a “cooperative cleaners” operation. The board did not even bother to compose their own Member Notice and just copied what CU 1 provided them with zero documented due diligence.
There are three other CU 1 initiated member votes at the same period as Spirit’s. They are GU FCU in Rome, GA on December 11, at USE FCU, Chicago, IL, on December 2, and at First Area Credit Union, Saginaw, MI, on January 14, 2026.
This multi-state hustle campaign destroys these independent credit unions operations. They end their legacy relationships of service and local leadership. It ultimately undermines the cooperative system’s unique competitive foundation of local knowledge. leadership and long-term loyalty.
These repeated takeovers demonstrate that democratic member control is meaningless. CEOs can undertake whatever their ambition takes them with non-functioning board oversight. The regulators aren’t just asleep at the switch; they are enablers routinely approving Member Notices devoid of meaningful information, or filled with misinformation. Members see through these pro forma explanations that violate common sense. (See two comments posted below by Spirit members).
Mergers are not a market growth strategy for an organization or the coop system. No new members are gained, no loans are added and local footholds often closed. The idea that these acquisitions are new growth is a false concept peddled by consultants and other enablers. It is merely consolidation, an effort to dominate rather than serve. Coop merger math is simple: 1 + 1 = 1.
These transfers of cooperative wealth enrich only the enablers. They would not happen if credit unions operated in a free and transparent market. In a real market, there would be competitive offers for these valuable franchises. But these are back office deals, negotiated and sealed witn legal.greements in private. The required details are blessed by passive regulators before being sprung upon the members at the least minute. Their approval by voting is completed in less than 60 days with litle opportunity to challenge the egulatory approved summary information mailed.
The absence of transparency and dialogue with members undermines any possible discussion of alternatives or of the deal itself. Spirit’s website makes no mention of the merger proposal or vote. The local press is apparently unaware and uninformed.
By keeping these deals away from public visibility, the perpetrators count on member just checking the Yes box on the mailed ballot. This is the is the method by which almost all members vote. The only information is in the Notice along with the Board’s recommendation to approve the action. In peson attendance at the Special Meeting becomes a mere formality, not a democratic meeting forum.
These coop merger transactions are private takings of common wealth.
Until the public and the members are informed of the perverse and sometimes corrupt practices fueling these acquisitions, the greed of a few will continue to stain and compromise the system’s future.
At some point members will rise up as they learn more about these enormous “free” wealth transfers. These efforts are now in the hundreds of millions and even billions of member owned institutions. At some point member-owners’ ire wll casue them to seek redress from the perpetrators through either political or legal actions.
And if local media and/or national business publications) begin examining these multi-million dollar self-dealing payouts and the billions of asset transfers without owner compensation, it may cause the latent democratic member spirit arise to stop these cooperative graft schemes. The democratic check and balance with, each member with one vote, is the supposed difference in cooperative versus for profit design.
Can credit union democracy save itself?
Member Brian Stuart comment: I am voting against the proposed merger of Spirit Financial Credit Union with Credit Union 1. Credit Union 1 is based in Lombard, Illinois. All of its branches are in Illinois. There is no advantage to the Spirit Credit Union member to merge with Credit Union 1. Merging with Credit Union 1 would take away the local Bucks County focus of Spirit Financial Credit Union, which should be its mission.
If Spirit Financial Credit Union would want to merge with another local Bucks County credit union, I would be in favor of that merger.
Member Joann Glasson: As a long-time member of Spirit Financial Credit Union, I am sad to see this merger occur when the CD rates are so much lower at Credit Union 1 and the loan rates are so much higher at Credit Union 1.
We are retirees with large deposits at Spirit that we will be forced to move if the merger is approved. This merger is not a service to the members of Spirit Financial Credit Union
Whether one calls the current period a time of transitions, transformation or just multiple uncertainties, there is a sense that national and credit union futures seem to be nearing a precipice.
Washington’s political divisions are heightened by increasing consumer anxiety. Economic uncertainty is created by the federal government’s policy shifts and attacks on opponents, ending key social programs and assaults on leading private institutions.
Trump 2.0 is not the same as the first term. He is turning the entire executive branch into his personal fiefdom installing loyalists in every department and agency of the federal bureaucracy. That is, when their functions are not being downsized to feebleness.
NCUA is no exception to Trump’s government onslaught. The lone republican board member became Chair on January 20th. His two democratic colleagues were subsequently fired so the White House could directly control NCUA actions. This ending of an independent agency’s leadership is now in the hands of the Trump dominated Supreme Court.
Chairman Hauptman’s term expired in August. At the same time the agency initiated a reduction in force that led to at least 20% of staff leaving. The agency now holds no regular board meetings. Regulation is by rote or reptition rather than design or intent. The role of NCUA is at best cloudy and at worst, irrelevant to credit unions’ future.
The largest trade association ACU has a new CEO, Scott Simpson, a veteran of the league system. He is introducing himself to credit unions speaking of unity, advocacy and defending the status quo. The credit union Defense Council (DCUC) is trying to position itself as a new national voice for the industry with daily press release postings.
With the economy and consumers both showing contradictory signals, the momentum for America’s economic outlook seems fuzzy even with record stock market highs.
In this period of transition in both public policy and AI generated business disruptions, credit unions third quarter results showed stability and resilience. However there are multiple concerns rippling across cooperative waters as the industry’s new national leaders take over.
Those in leadership can wait and watch. Try to keep pace by doing more of the same.
And, hold tight until market forces or political challenges force a change of direction.
Or, create a new cooperative vision that becomes a rallying point for those concerned about current trends,
Credit unions have been mired in uncertainty before. Sometimes the confluence of external events; other times by internal shortcomings marked by grasping for false advantage. For example the effort to convert to mutual bank charters in the first decade of this century—an option taken by over 30 credit union CEO’s, of which only one survives today.
History suggests the gift of cooperative hope is more likely to come from the passion of insiders rather than the hired experience of other industries. These Insiders should know cooperative history, its multiple strengths, proclaimed values and commitment to member and community wellbeing.
Moreover any “updated” vision must be fought for, not just proclaimed. It wil require repeated articulation and conversation to define a better direction than following the status quo crowd.
Last week I posted the final video, Edition XX from NCUA’s Video Network created during the Callahan era from Oct 1981 through May 1985. The 30 minutes is a summing up of the major internal changes that took lace during this initial period of deregulation. Three themes stand out: change requires will, teamwork and documented results.
But the real foundation for the successes in this final video was laid in the first film the network distributed in cooperation with the Illinois Credit Union League: Deregulation-What Does it Really Mean?
This initial communication presented a new regulatory policy and the approach for how it would be pursued—cooperatively and in dialogue. The panel includes the NCUA Chair and General Counsel, three credit union CEO’s and Jim Barr who was CUNA’s Washington spokesperson.
This video portrays what is required to state and implement a path of hope and progress in an era marked by uncertainty, rapid change and new leadership.
The video is an example of leadership in a cooperative system. It is as relevant today, as when it was created over forty years ago.
Here is the link.
