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.
Everyone has highs and lows in their personal and professional endeavors.
Some of my most fulfilling moments were the ten years Ed, Bucky and I worked together in credit union regulation. First in Illinois, and then at NCUA for three and a half years (October 1981-May 1985).
One of the educational communication efforts we launched was the NCUA Video Network. The initial film was in partnership with the Illinois Credit Union League, What is Deregulation?, periodic productions chronicle NCUA’s priorities and information vital for credit unions to be aware of.
The final Edition XX was called The Callahan Years. It is a live, unscripted interview by a moderator with Ed, Bucky and me. It responds to criticisms, some voiced about our leaving two plus years before Ed’s term expired. More importantly, it is a discussion of the many ways the agency changed to meet the new era of open competition versus government assigned charter franchises.
This 30-minute review captures the joy and learning that happens when people work well together. I was fortunate to be a part of a team that stayed together even as we went our separate ways after founding Callahan & Associates in 1985.
The ten years we spent learning from each other and from movement leaders was a Credit Union Camelot experience for me.
Listen to this summary of this pivotal period in NCUA and credit union history. It is a moment of remembrance and thanks for this special professional interlude.
(https://www.youtube.com/watch?v=DrfG5PiObB0)
In life, both fiction and for real, we often do not know the full story until the last chapter.
Yesterday, a funeral service filled with gratitude opend this new week for my wife and me. Not just a memorial service, but also “The Celebration of Life and Service of Witness to the Resurrection.”
What do those last four words mean?
Funerals are brief and often insightful summaries of what made the person unique-not just as an identity, but also for a life lived. The full story completed.
For non-family members, the service provides a brief glimpse of the arc of a person’s life by those who, in most cases, knew them best. When one is not family, we often are only aware of brief moments of familiarity that rarely capture one’s full story.
This service was for a mother of two girls, who divorced in the early 1970’s, raised the family by herself while earning an MBA and pursuing a career. Life was filled with job changes and relocations to make ends meet.
My wife and I only knew her as a grandmother, who sang in the choir, volunteered in the Opportunity Shop, and was a full time caregiver for her grandchild, raised by her own single mother.
Her life was defined in her family’s remarks, as one of unconditional acceptance of others, care and service to the community.
There is a saying among farmers that the land they cultivate is not theirs. They are stewards of the legacy they inherited. They are not owners free to do whatever they want with the property. Rather their ultimate obligation is to manage the land so the legacy continues to benefit future generations.
This is similar to the belief motivating and sustaining many credit union leaders past and present.
But it also portrays one of life’s realities for all.
How one spends their most precious asset, their limited years, becomes their legacy. Family will recall, as they did on Sunday, the experiences that influenced them as children, grandchildren pr as a brother.
In the service bulletin was a note that offered suggestions if someone wanted to make a donation to honor the person’s memory. Chosen by the family, this list is a glimpse pf the person’s priorities in life:
This is how the family suggests others support the values the person lived in her life.
This list is for gifts of thanks giving. It is how the family wants their mother ‘s actions and priorities remembered. And passed on.
This Sunday service was not just a celebration of past deeds It was a pivot to how a person’s example will continue to shape the future. Through family and friends. It is why funerals matter. We will all have one.
Fall brings new options from nature’s closet-some staying on from summer and others new. My wife wants the yard to display color in every season. Here are samples from nature’s local outlet of the fall line.
My Star mangnolia in full dress mode
The last rose of summer
Pansies in a flower box should winter over
Fall camilias are the star of this season 
Yuletide camilia just starting to bloom
Nandina or heavenly bamboo berries
Summer chrysanthemum in container-bring in or recyle?
Ready tor fall
Last Sunday evening Joan and I attended a fund raising dinner for Ukraine hosted by St. John’s Episcopal Norwood in Bethesda. The meal was prepared and served by the women of St. Andrew’s Ukrainian Orthodox church in Silver Spring.
Over 60 people attended with table centerpieces in yellow and blue bouquets and small Ukrainian flags.
These periodic events are led by two St. John members who formed a Ukrainian support group years earlier after Russia’s invasion. They share information on the country’s trials of war. They have raised funds for replacing a neo-natal unit in a children’s hospital, tourniquets for civilian casualties, microscopes for high school science classes as well as sending surplus Halloween candy to be delivered by Christmas.
As official US government support has waxed and waned, these people to people efforts have remained constant.
This evening’s focus was to raise money to help purchase an evacuation ambulance, especially equipped for rapid response of civilians and soldiers injured in war. The vehicle would be assigned to the Medical Unit, 12rh special forces Azov Brigade.
The Azov brigade became known for its stand during the months long siege at the Mariupol Azovstal steel plant in 2022, The evening’s theme:
“We cannot bring back the fallen. But we can honor theirmemory by saving and protecting the living.”
To buy and equip an all-terrain ambulance in Ukraine would cost $14,000. Yesterday the St. John’s leader Sandie emailed the group that the entire amount had been raised with more for medical supplies.
This was the response from Olena who organized the women of St . Andrews, who brought the dinner, when she heard the outcome:
This is truly groundbreaking!
This vehicle will mean life; it will be equipped and is meant to go to the darkest and most hopeless places of war to bring back survivors. It will bring a mother back home, reunite a son with his parents, it will work hard to make sure families are reunited.
Having received so much feedback from Ukraine about someone’s last words over the radio knowing they would not be rescued and were going to die, we can honestly say this is a new lifeline for some. This will mean fewer cases of the last words to the loved ones over the radio.
We thank you, Ukraine thanks you, families and children thank you. We are the kind strangers that carry out this mission and once again we made this happen, as a community.
A Sunday evening meal shared with people committed to doing good for another country that many may never visit. It is a reminder that when giving, we often receive much ourselves.
One of Helen’s observations was, “The only thing worse than being blind is having sight but no vision.”
I received an email last night announcing a merger of a top ten credit union and one of the fastest growing credit unions (their term) in their market.
The release contained this triumphal statement: The combined credit union will serve 1.8 million members and operate more than 80 locations under BECU’s charter with more than $33 billion in assets. This will make it the fourth-largest credit union by asset size in the U.S.
The email also included a slick PR poster that made it appear that this was a done deal, between the two firms. The member-owners apparently have no say or voice.
This “fait accompli” approach suggests the continuing credit union has not looked at the track record of large credit unions whose growth strategy is mergers. They might want to review PenFed’s recent history as a start.
This haughty announcement also confirms the observation that every organization is only one or two CEO turnovers from failure. This was by a credit union leader who had witnessed countless changes in his four decades.
Failure in his view was not financial, but the end of an independent, sui generis, credit union. It occured as subsequent leaders lacked commitment to, and often knowledge of, the organization’s founding principles.
In tlhis case the continuing credit union had been led for over three decades by a CEO who could have chosen to merge multiple credit unions supported by his single sponsor. But that was not how he thought coops best served their members.
I’m sure there will be more to learn about this transaction as we get past the “people helping people” claptrap. With this swaggering start, the rest of the story will likely become another case study of credit union CEO’s and boards implementing “The Art of the Deal.”
One consequence of the 44 day federal governement shutdown is the absence of timely macro data on the US economy. Fortunately for credit unions there is another option to track the state of the movement.
Each quarter after the vast majority of credit union call reports have been filed, Callahans offers a preliminary financial and operational analysis of important industry trends.
Today at 2:00 PM EST the firm’s Trend Watch broadcast will give the September 30, 2025 year-to-date performance numbers. It’s free. You can sign up here. (link) or directly enter (link)
Another example from yesterday’s Marketplace Daily Wrap: “The last time the Census Bureau gave its monthly report on retail sales in this country was two months ago. Those figures were for August.
We don’t know when we’ll get those figures for September and October, as the Bureau works through the data release backlog caused by the government shutdown.
3. Because there is a gap in macro economic trends and recent data, analysts must rely on the private sector, especially company’s quarterly reports. These will be the primary data source to evaluate the economy’s overall trends, especially consumer spending.
This week third quarter financial results from several big retailers, Home Depot, Lowe’s, Target and Walmart will be announced along with their future outlook. Their revenue and profit trends will be vital to interpret consumers’ economic resilience.
Those firm’s nationwide sales will indicate whether consumers may or may not be tightening their wallets in the short and medium term.
Credit unions provide valuable insight especially on the lower and middle parts of the income spectrum. What are savings trends? Are loans increasing and in what categories? Are there signs of consumer financial pressures from delinquency numbers in credit cards, indirect autos or even student loans?
Credit unions serve very specific or small areas of the consumer economy. Their local circumstances may not follow national macro trends. That economic diversity is critical to overall system soundness.
But knowing the system’s year over year growth rates and other critical trends can provide important perspective for the remainder of 2025, as well as next year’s budgets and plans.
When traditional data sources are lacking, a credit union advantage is their willingness to share with their peers how they see priorities for the future. Callahans will be the first chance to view this across the entire spectrum of credit union place and asset size.
Tune in at 2:00 PM. Send in your questions or comments via the chat.
Last week a proposal that federal credit unions be required, as state charters must now do, to file an annual IRS 990 was reported.
There is useful information in the IRS form that is not available elsewhere, including details about the compensation of the CEO, senior managers and board (when applicable).
Here is a link to a sample for the largest state charter SECU-North Carolina at their fiscal yearend, June 30, 2024. The initial pages are similar to call reports. Additionally, many yes-no questions about governance link to data in the subsequent schedules.
This full report would be even more valuable if the data of the two federal credit unions closest in size, Navy and PenFed, were available for comparison.
One part of this initial data includes the question about the disclosure/availability of thefiling to the public. Most credit unions only check this option: Upon request In other words, filed, but not readily available.
Information not provided in other required call reports includes:
Schedule I: Cash grants and Other Assistance to Domestic Organizations and Domestic Governments.
Schedule J: Compensation-Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees. Also, Loans to and/or From Interested Persons including those funding split dollar life insurance-a retirement benefit described at the end of this post.
Schedule O: Supplemental to Form 990 includes information on governance, elections, salary oversight process et. al.
I believe it is in the interests of individual credit unions and the industry that federal charters be required to file the same data as state charters.
Here’s why this filing should be standard operating practice.
Transparency is critical to democratic governance and accountability for credit unions’ elected leadership.
Compensation for CEO’s and senior staff (and when permitted board members) is the single most important indicator of personal stewardship of members financial assets.
It is vital in organizations that receive a tax exemption to maintain accountability in return for this benefit. Especially so when most credit union competitors pay taxes.
State charters have been disclosing this information for over five decades. There has been no downside from the practice. Public disclosure is a responsibility in return for this significant exemption.
There are problems with the practice, however. The due date for filing is the 15th day of the fifth month after the fiscal yearend. That would be May 15th or November 14th for December or June fiscal years. Many credit unions seek an extension; for example the SECU report was filed on May 29, 2025, versus the November deadline. This means the information is often a year old. Ideally the report would be sent to all members in their Annual Meeting information, as part of the year’s financial report.
Also when seeking specific reports via public sources such as Pro Publica, it is not unusual to find that some credit unions are apparently not filing. There appears to be no regulatory enforcement or review to see if the information is correct.
Failure to file for three consecutive years results in a revocation of a credit union’s tax status-certainly a safety and soundness problem. No state charter should be approved for merger unless the most recent IRS 990 is available, as that information is critical to understanding the required Member Notice compensation disclosures.
Credit unions should support this 100% public filing for the movement. That would demonstrate public responsibility and respect for the member-owners.
All state-chartered credit unions that are tax-exempt under section 501(c)(14)(A) are required to file an annual information return with the IRS (either Form 990, 990-EZ, or 990-N), with the specific form dependent on their financial activity.
There is no asset level that completely exempts them from this filing requirement.
The specific form to be filed depends on an organization’s gross receipts and total assets:
Federal credit unions, in contrast, are exempt under section 501(c)(1) and are not required to file an annual information return with the IRS.
Failure to file the required return for three consecutive years will result in the automatic revocation of the organization’s tax-exempt status. The IRS provides resources on the Form 990 series filing requirements on its website.
| SPLIT DOLLAR LIFE INSURANCE: THE CREDIT UNION HAS GRANTED NONRECOURSE LOANS FOR LIFE INSURANCE PREMIUM PAYMENTS TO SELECT MEMBERS OF SENIOR MANAGEMENT. THESE LOANS ARE COLLATERALIZED BY THE ASSIGNMENT OF THE CASH SURRENDER VALUE OF EACH RESPECTIVE LIFE INSURANCE POLICY. THE POLICIES ARE OWNED BY THE EXECUTIVES AND THE OWNERS HAVE SOLE CONTROL OVER THE LISTED BENEFICIARIES. UPON DEATH OF THE INSURED, THE PROCEEDS FROM THE DEATH BENEFIT OF THE LIFE INSURANCE POLICY ARE USED TO PAY THE OUTSTANDING BALANCE AND ACCRUED INTEREST OF THE LOANS. THE LOANS ARE CONSIDERED NONRECOURSE AND AS SUCH, THE CREDIT UNION HAS RECORDED THE BALANCE AS THE LOWER OF THE OUTSTANDING LOAN BALANCE PLUS ACCRUED INTEREST, OR THE CASH SURRENDER VALUE OF THE LIFE INSURANCE POLICIES. |
On June 1, 2025 Thrivent FCU converted to a state issued Industrial Loan Chatered (ILC) bank with FDIC insurance. There are only 24 such charters operating in the US,
The process took three years and had to be approved by the credit union’s member-owners with at least 20% voting on the change.. The conversion resulted in the full payout of the members’ collective equity, plus a bonus dividend on shares. The full details are reported in the post Thrivent Members Approve Sales to a Bank.
In its June 2 launch announcemnt, Thrivent Bank reported $1.09 billion in total assets. It is a wholly owned subsidiary of Thrivent Financial.
The parent company,Thrivent Financial for Lutherans, is a member-owned, fraternal benefit society. It is a non-profit , managing over $193 billion in administered assets, with a tax exemption based on religious affiliation.
According to Thrivent Financial’s 2024 Annual Report, it holds $18 billion in capital and serves 2.4 million members. Its primary products inlude insurance, annuities and health care programs. The Report has statistics on its community contributions and volunteer efforts.
The parent company’s CEO said the new charter: “combines our legacy of trusted financial advice with a modern, client-first banking solution. Thrivent Bank will help us build relationships with younger clients earlier in their financial journeys – who we can then serve throughout their lives.”
In a November 12, 2025 interview with a Banking Dive reporter, the CEO outlined his focus. The conversion “aimed at broadening the financial institution’s reach nationally and attracting new clients.”
Located in Salt Lake City, the bank is digital only with no branches.
The CEO. Brian Milton’s value proposition is to combine its digital platform with live personal advice and the financial expertise of the Thrivent organization: “everything that we see out there seems to be having to pick one of those two,”
The new web banking platform is still under construction. The current site provides a fairly standard listing of consumer services. Savings rates would appear to be at the lower end of the market. Auto loan rates are based on a matrix of model year and loan term.
The bank’s business financial services appear targeted to the non-profit sector:
It takes organization, planning, passion and vision to run a business, church, school or charity. It also takes the right financial institution to help you navigate the nuances of business and nonprofit banking. Whether you’re a new or established business, church or foundation, business banking tools from Thrivent Bank will help you every step of the way.
The one unique prodict focus would be its specfic contact center for studen loans.
The web site is still under construction so there is not a lot to see at this time. The CEO stated the bank would rely on ouside vendors to meet its technology (presumably digital banking) solutions.
The banking charter gives the possibility of national reach for younger geneations of retail customers. Those at the beginning of their financial lives may not be the sponsors prime target for insurance products today. Rather loans may be their first financial need along with basic transaction services.
The bank’s differentiation will be personal service: “We’re not going to be putting bots in front of clients, The human piece is extremely hard to replace.” This approach is called “purpose based advice.”
The de novo has a lot going for it. A 120-year old non-profit financial sponsor-owner with deep pockets; the experience and start up relationships from the credit union; and a philosophy of service seeking life-long member relationships. It has an affinity client base from the parent as an initial focus.
The critical question is whether a digital only delivery strategy can effectively compete with local, personal credit union service centers staffed with experienced personnel. Being present in and an active part of the communities served is both the foundation and special advantage of credit unions.
Digital offerings for most credit unions, compliment but do not replace the option for in-person service. And community presence and involvement. In the few cases where digital-first is the primary go to market effort, those credit unions are struggling compared to the performance of their more grounded peers.
The Thrivent Bank is very unlikely to fail. The real question is how successful the digital only strategy will be? And at what cost to create a clear value advantage for users? Especially in a virtual world where options are just a click or AI search away?
I received a communication from an experienced, throughtful and committed credit union leader last week. He believes in the unique role of cooperatives in the American financial system.
But he is throwing in the towel, so to speak. He has been an advocate for member value, especially in merger situations. That strategic choice, he believes, should be especially well-documented with data and plans. Because it ends the independence and member choice of a long serving institution.
Most importantly he supports the position that owners, whose loyalty created the credit union’s mutual equity, should benefit from such combinations.
No more though. For his stance for cooperative integrity has resulted in an anti-merger reputation. In his words: We live in a capitalist society, and we have a cooperative movement that often co-opts cooperativism while fully embracing capitalism. . . So rather than spending my energy in opposition to that current, I’m shifting toward supporting the institutions that actually want to grow strategically and maintain themselves — the ones who want to remain independent, sharpen their execution, and live more fully into their cooperative identity.
He will find that there are plenty of cooperative leaders who still embrace that approach.
But there is another rationale I hear repeatedly from credit union leaders defending the growing merger frenzy. This logic asserts: Mergers are the wave of the future; everyone is doing it; so let’s not be left out of this treasure-scavenger hunt now going on.
This defense, everyone is doing it, is common in many areas of life, not just in business. It quickly leads to moral relativism. That is, some asset, cooperative values must keep up with the times and current practices.
Last week the Wall Street Journal published an opinion piece of this frequently stated defense for leaders’ actions. Here are excerpts from that article by Gerard Baker: (link)
Moral relativism is enticing. It enables me to establish the moral value of everything I do by reference to the behavior of others. It allows me to avoid censure by judging my intentions, choices and actions not on the basis of whether they are intrinsically right or wrong, but by the lesser standard of whether someone in a similar position might have done something similar.
It is deeply corrosive of personal mores and social trust. Over time it dulls the conscience to any moral hierarchy. It is never a legal defense and shouldn’t be a moral one.
Moral relativism is hardly new in public life. Self-exoneration through false moral equivalence by public figures is as old as time itself. But when it becomes the controlling ethical architecture of public behavior, we are in serious trouble. Its effect is to give leaders permission to do just about anything they want, unconstrained by guilt, shame or political sanction.
Moral relativism and the ratchet effect will ensure that there is always some precedent close enough to persuade people to shrug even when confronted with some evidence of genuine turpitude on their own side.
Isn’t it time for credit unions who believe in the special role of cooperatives to ask whether this increasing frenzy is really serving members or merely the acquisitive ambitions of CEO’s and passive boards?
Only about 3-4% of of credit unions will complete a merger in any one year. Yet the vast majority remain silent as some of their peers become coop predators.
Are leader’s uncritical acceptance of this restructuring a sign of the system’s strength or a fundamental weakness?
There are many more questions that should be asked. (link) But the most important one is Qui bono, Latin for who benefits?
Required disclosures in the NCUA approved Member Notices suggest it is rarely the members.