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.
Will Rogers: There is no credit to being a comedian when you have the whole government working for you.
The Maple Leaf-A Metaphor for Life
by Rondalyn Whitney
I hope my death is like a maple leaf,
a final, radiant show.
Not a storm of sudden, brutal grief,
but a gentle, amber glow.
To fade as autumn comes to call,
to loosen its grip with grace.
Not cling to the branch, but simply fall,
and find a new resting place.
A flash of crimson, orange, and gold,
a final, vibrant hue.
Then, a slow drift, stories untold,
a journey forever new.
To spin and twirl on the final breeze,
a dance upon the air.
Rustle softly through the autumn trees,
a beauty beyond compare.
And when it lands, a soft, hushed sound,
upon the forest floor.
A new beauty on the cold ground,
until it’s seen no more.
The ordinary human being does not live long enough to draw any substantial benefit from his own experience. And no one can benefit by the experience of others. . . each (generation) must learn its lessons anew. (Albert Einstein) October 26, 1929)
On October 20, 2025 Callahan published an analysis with multiple charts showing how mergers are changing the institutional character of the credit union system. The graphs have ten and twenty year times lines documenting the number, size and source by peer group of this consolidation.
The analysis, Credit Union Mergers on the Rise, provides essential macro trends to track how this consolidation is affecting the institutional structure in the credit union system. One example is that over the past ten years the average credit union asset size has increased from $188 million to $538 million.
There are many other data points one might take from the article to help frame critical questions that should be considered, but are often overlooked. For many view this consolidation as inevitable and necessary.
The basic financial math of a credit union mergers is simple: 1 + 1 = 1. There are no added members, shares, loans, employees or outlets. Instead in most cases a financially strong long-standing coop has turned over all of its members’s assets, equity and future direction to another organization whose leadership they had no role in evaluating or choosing. Sometimes the new management’s head office is hundreds or even thousands of miles distant with no connection to the merged credit union members and community.
Credit unions are built on relationships/bonds and generations of member-owner loyalty. That commitment was their initial capital and the foundation for much of their public reputational goodwill today.
So it is important to consider whether these trends and sometimes questionable activity are helping or hurting the system’s future. Are mergers a symptom of a system’s weakness, an inability to sustain organic growth, or a strength?
Other questions that could help member-owners and cu leaders better understand and evaluate what is occurring could include:
Is consolidation resulting in fewer charters inevitable?
How has the coop system’s approach to merger changed over the past decades? What role and benefits are third parties gaining in these combinations?
What are options for credit unions who feel the need to merge?
What should member-owners know when asked to approve the transfer of their entire coop’s assets and legacy about the performance, business priorities, and leadership of the continuing credit union?
What is the fiduciary duty to the member-owners when leadership decides to seek a merger? How should the conflicts of interest be addressed with CEO’s negotiating their own merger benefits?
What is the regulator’s role when reviewing merger applications? What is their obligation to the member-owners? Are they responsible for the information owners receive when approving the Member Notice announcing members’ voting role?
Has there been any multi-year studies of well capitalized credit union mergers and the before and after performance trends over a fiveyear period? How did members value change? What happened to their community relationships and employees? What are the additional immediate costs incurred by mergers?
How one introduces an issue will often determine what actions are necessary. With mergers occurring at an average of three to four per week, there has been no industry discussion of the implications and the benefit or hard to the members-owners.
Now, not later is the tme to understand the consequences of mergers.
Individual instances of multibillion dollar cross- country combinations or when one credit union completes three mergers in one month (and ten in one year) are routinely announced. But these apparent individual actions will have significant consequences for every other credit union.
For no credit union stands alone. All are part of an interdependent system that creates individual opportunities and vulnerabilities.
Merger activities are having important conseqences for the member-owners, their communities, and the shape of financial options in America.
The future of the coop system’s will be different. This is not an effort to go back to what was. Rather it is a necessary examination as Einstein might suggest, to plumb our wisdom now and not wait for future generations to assess past events.
First, a recent CEO’s update to staff on the federal governments shutdown and the credit union’s response for members:
SHUTDOWN ASSISTANCE: The credit union is offering numerous options to members impacted by the government shutdown. We are offering unsecured loans based on the member’s normal net weekly or bi-weekly pay with a 7.25% APR up to 12 months. We have also extended the interest free period to 90 days and allow for a term up to 48 months to assist even more members through this tough time. From the beginning of the shutdown through November 1st, we helped 387 members with total loans of approximately $1,911,167.00. We have also processed a considerable number of skip payments for members without any fee.
CEO’s introduction: This month’s Impact Maker is a great example of living our mission and doing good for people. We’re a lending organization and love to help members with their borrowing needs. But any loan needs to be in the members’ best interests. In this situation, not making the loan was the better decision.
“Tammy recently spoke with our member, Betty (name withheld), who expressed interest in opening a Home EquityLine of Credit. Over the course of the conversation, the member divulged that she was taking out this loan to give funds to her daughter for flooring and renovation expenses.
Tammy dug in further – uncovering that the member really didn’t want to do this loan or assume another loan payment given her fixed income but was being pressured to do so by her adult daughter.
Tammy listened to the member’s situation but advocated against taking out a loan she wasn’t comfortable with, and explained to the member the loan options available to her daughter, should she want to apply in her own name.
Later on, the member texted to Tammy, detailing that her daughter was screaming and banging on her door, irate that Betty wasn’t moving forward with the loan. Tammy continued to support and encourage the member, advocating for her safety and for her choice to do what is best for her own financial situation.
Betty was extremely grateful for this support, thanking Tammy for her “thought provoking” conversation.”
This CEO’s story is about Jose (name withheld), who was aided by Isaiah a financial coach at a local Member Center.
“Isaiah opened Jose’s membership in February of 2024 at the Member Center. Jose is an older gentleman with very limited credit for his age, but he wanted to start building it. Isaiah was able to help him obtain a $500 First Time User Credit Card in addition to his checking account and debit card.
The member would reach out to Isaiah from time to time and update him about his credit score. Overtime, Jose was able to qualify for a higher credit limit. He started the process of trying to buy a car. However, he was challenged by his limited credit history, car prices and the loan to value on the cars in which he was interested.
Overtime, Jose continued to pay on his new credit card and qualified for a larger limit again, but he still was not having success with purchasing a vehicle. Isaiah worked to get him pre-approved for a dollar amount and began reviewing specific vehicles with their price and loan to value compared to blue book values. Finally, Jose found a vehicle he liked and qualified for. The credit union approved his financing.
Recently, the loan was closed, and Jose was driving his “new” car. The loan took over a year and the credit building process was over a year and a half.
Thank you, Isaiah, for your persistence and caring approach with Jose. You lived out our purpose to build hope by being a caring financial partner.”
Starting an odyssey to change cooperatives. Before you read this CEO’s statement from LinkedIn, consider a brief thought from Emily Dickinson, By a Departing Light:
By a departing light
We see acuter, quite,
Than by a wick that stays.
There’s something in the flight
That clarifies the sight
And decks the rays.
I have always been a bit of a square peg struggling to go into a round hole. I have always pushed against the grain regardless of my role. Sometimes that has been appreciated. Other times, it has been criticized.
I have debated for years how I can best serve this wonderful industry. In a space that is riddled with hypocrisy and attrition, I have concluded that I am of more value outside the bubble than inside.
I’m not only stepping down as a CEO. I’m stepping away from working inside credit unions altogether.
There is never a good time. There are always what ifs. Unfinished work.
December 18th is my 25th anniversary in the credit union industry.
In my 25 years, we have lost more than 50% of our neighborhood or community credit unions across the country.
So what are my motives? Family. Opportunity. Change. Fit.
Change. Something has to change.
I could sit in a credit union trying desperately to conform to my round hole. To complacency. To status quo. To fit.
Or…
I can dedicate myself to change. Change to challenge complacency. Change to disrupt the status quo.
I’m betting on myself. For my family. For opportunities. But also for a chance to make an indelible change to our industry.
If we want future generations to know credit unions, we must be about the work of saving them.
If I am fortunate, I have 25 years left in my career. During that time, my priorities will be God, Family, Career. In that order.
The second half of my career will be focused on finding as many ways as possible to help our credit unions win. Creative Strategy. Next Level Results.
I won’t stand by idly watching credit unions get regulated out of existence or go quietly into the night.
So this is not a goodbye. This is a hello.
I am not leaving the fight. I’m just getting started.
November 14th. I close one door so that I can run through another.
See you then.
(James McBride, CEO, Connects Federal Credit Union)
For several decades Garrison Keillor’s Prairie Home Companion with Lake Woebegon updates was a Saturday night destiny for many via public radio. (link)
Now in his early 80’s he continues his Prairie Home shows as live performances at 8-10 venues per month around the country.
He continues to write, not fiction, but incisive observations about his life in New York City and from his travels. He also emails prior broadcasts of his five minute daily The Writer’s Almanac from NPR. They are well researched briefs of writers born on the day or historical events. (e.g. founding of Harvard University).
His virtual engagements with his followers include monthly poetry contests and a periodic Q&A on reader’s questions and concerns. Here is his response to a Marylin H.’s question on our current national mood.
Q. As someone who believes in being “cheerful,” I’m wondering how you manage to feel this way during the mess this country is in right now. I find myself almost despondent; I’m filled with a deep sense of dread and sadness. You and I have seen a lot over the past 80 years (I’m 81), and we’ve managed to make it through, but this feels different. I’m almost glad my years are about over so I don’t have to watch the ongoing destruction. Maybe I’ve lived long enough. Marilyn H.
A. The election of 2020 was one of the closest ever and a paper-thin margin put in office the gentleman who, if you watch his speech to the generals at Quantico or the sailors and Marines on the aircraft carrier in Yokosuka, is putting on a show and enjoying himself, taking great pleasure in trolling people like you and me and driving us to despair. But this adolescent adventure is not going to end well for the GOP. Speaker Johnson and Senator Thune and other Republicans are intelligent people and they know they’re being sold down the river and there will be no way back.
I don’t know about “destruction” but we’re seeing corruption like never before and it’s right out in the open. This is not going to pass. We are a better nation than this and this will be made right. OM
Getting ready for flight or fright.
Halloween has Scots’ origins. It was popularized in the 18th century by Scotland’s national poet Robert Burns in his 1785 poem, “Halloween.” The poem, which describes the gathering of locals on All-Hallows Eve to present crops, enjoy a feast, tell fortunes revealing one’s true love, trick-or-treat and frolic with the opposite sex, became a source catalog documenting folk customs celebrating All Hallows Eve, All Saints Day and All Souls Day. The three days are collectively known as Allhallowtide, that portion of the church year “dedicated to remembering the dead, including saints (“hallows”), martyrs, and all the departed. (Source: The Jefferson Educational Society, Book Notes # 78)
Autumn Movement
By Carl Sandburg
I cried over beautiful things knowing no beautiful thing lasts.
The field of cornflower yellow is a scarf at the neck of the copper
sunburned woman, the mother of the year, the taker of seeds.
The northwest wind comes and the yellow is torn full of holes,
new beautiful things come in the first spit of snow on the northwest wind,
and old thing go, not one lasts.
Halloween “music” from the American Bandstand TV show October 1964, The Monster Mash: Show your grandkids music from another era.
(https://www.youtube.com/watch?v=vNuVifA7DSU)
Vendor relationships are an essential requirement of managing a credit union. All credit unions contract with an external vendor for their core processing operations and many ancillay addons.
Only one or two of these vendors are credit union owned CUSO’s. The others are for profit companies some privately owned and others public. Some serve primarily credit unions; others the entire financial market.
The largest market share for critical back office operations is Fiserv. In a 2024 survey, they served 1,264 credit unions or 27% of the total market. This share is provided through almost a dozen core options. This variety reflects FiServ’s business model of growth through acquisitions of independent credit union dp providers.
The next highest dp vendor’s share is Jack Henry with 544 credit union clients on a single platform.
Yesterday Fiserv announced its operating results for the third quarter. The surprise result stunned the market. From Bloomberg’s Evening Briefing:
Fiserv stock suffered a record plunge after the fintech slashed its outlook for full-year earnings and unveiled third-quarter results that confounded Wall Street analysts. Chief Executive Officer Mike Lyons, who took the reins in February, said he discovered that Fiserv wasn’t going to be able to deliver on its previous promises after a broad-based review of the business in recent months. Lyons’ predecessor running Fiserv was Frank Bisignano, who left to join the Trump administration.
“More financial surprises emerged in the start of Q3,” Lyons told analysts on a conference call. “That prompted not just the annual strategic planning process, but this much more rigorous review into our financials. And that was also driven by some of the stuff we’re hearing from our clients.” (emphasis added)
Analysts expressed surprise at how quickly the business appears to have soured. Trevor Williams at Jefferies said the magnitude of the earnings miss and forecast cut “is difficult to comprehend.”
“To be frank, we are struggling to recall a miss and guide down to this degree in any of the sub-sectors we have covered during our time on the Street,” Matthew Coad, an analyst at Truist Financial, said in a note to clients.
The most revealing phrase in Fiserv CEO Lyons call was the reference to some of the stuff we’re hearing from our clients. That is pretty frank talk from a CEO facing a market confidence meltdown.
What’s next for credit unions? With up to twelve different core solutions and serous earnings pressures, some consolidation forgreater efficien would seem inevitable.
In addition to being aware of what changes may be coming, the next important question is what are my options? For the short run? And the longer run when my dp contract is up?
This uncertainty will put the focus on other credit union dp providers, especially those who may be credit union owned. Or credit union focused vendors who would appear to be financially stable, and not positioning for an eventual windfall sale to an outside party.
With all the public focus on new technology, it is important to remember the value of long term reliable relationships. The unique credit union solutions of creating CUSO’s to serve common tasks becomes more promising than ever. While CUSO’s must compete with for profit alternatives, often with greater resources, they do not confront the prospect of market sell offs driving business decisions.
Whatever the outcome of Fiserv’s fall from market grace, it should prompt a greater awareness and examination of each credit union’s core provider. What do you know about the company’s financial circumstances and client satisfaction?
In a response to yesterday’s post citing PenFed, a member sent me the following notice requirements for an owner to be nominated for an open board potions at the credit union.
The 1% standard cited would require 28,128 member signatures based on the latest call report. It is a mere pretense of democratic owner control.
The member added this comment: Credit unions are becoming more like Fortune 500 companies every day. They exist not to meet the needs of customers or shareholders but entitled corporate executives.
The notice also contained short bios of the three board nominated candidates. The first is a retired army colonel who has been on the board since 2008 and serves on the Planning Committee.
The second is a retired USNR aviator who served for ten years on the Supervisory Committee before “joining the board” in 2022. He also serves on multiple committees including planning and risk management.
The third board nomination joined the board in 2005 and has just retired from a 38 year career working for the federal government. This person is the board treasurer and chair of the financial and risk committee and on the planning committee.
All have earned advanced degrees and have served in multiple professional civilian roles. No one would question their credentials. However their candidate descriptions include no statements about their priorities for the credit union and its current performance.
At September 2023 PenFed’s total assets peaked at $35.4 billion. As of this June the total was $30 billion. This $5.4 billion asset decline is a continuing trend. In the 12 months ending June 2025, shares have fallen by over 10% or $3.0 billion, and loans by 13.2%, or $3.6 billion.
In the income and expense comparison for the first six months of 2024 and 2024, total revenue is down 14.1% and operating expenses by 3.75% The net income for both half years is positive with ROA’s of .27% and .54%. However these results were achieved by recording “non opeating gains” of $86.3 million and $95.3 million in the two periods. Otherwise, net income would be negative. Non-operating gains result from the one time sales of assets such as buildings or loans.
In the past 12 months, there has also been a decline in the number of branches (4), employees and members. It has downsized its balance sheet by reducing external borrowings from $3.8 billion at December 2023 to $756 million as of June 2025. The reduction in total assets has resulted in a net worth ratio between 9% and 10% even with minimal earnings in the past 24 months,
In sum, PenFed is moving steadily backwards.
PenFed has one of the oldest and most recognizable brands in credit unions. It portrays strength and security suggesting a direct affiliation with the government. The credit union has an FOM charter open to anyone, reporting 342 million potential members.
During the past decade, the credit union has merged over 25 credit unions across the country, acquiring their equity. Often, after a brief transition, the local branches are closed, employees laid off, members offered only virtual services, and the buildings and other assets sold. The local legacy relationships, representation, community presence, and reputation are gone.
PenFed has had strategic advantages many other credit union’s covet. Scale, open membership, diverse products, a recognizable brand, multiple acquisitions of other credit union with their equity and increasing conversions to virtual and remote services. Yet it is in decline.
These declining financial trends have taken place for at least the past two and a half years. What has the board been doing? What changes have been tried?
Members are not being served well by their director representatives. But what recourse do they have other than to close their account and leave?
This situation is a concrete example of why member-owner elections are important versus the habit of routine ratifications of board incumbents. All three PenFed nominees would seem to have exceptional credentials. But in practice they are shepherding a significant institutional dwindling.
The financial engineering to maintain a net worth above 9% by selling off assets to record non operating gains is not sustainable. Does the credit union even have a plan or leadershlp capable of reversing this diminishing?
This situation is why annual meetings should matter. Elections are moments for accountability not merely PR exercises. Democratic elections empower owners and promote leader responsibility. In the absence of member participation, there is no answerability by those in leadership positions.
When the regulator is the last resort for addressing financial and operational shortcomings, the credit union has lost its autonomy. And member-owners’ needs are sidelined to meet the priorities of the government overseer.
When democracy as the means for leadership accountability is abandoned, the outcome is rule by habit or authority. Neither is a sustainable approach for long term success.
In a January 2024 blog, I described NCUA’s approval of bylaw changes for Navy and Pentagon FCU’s that effectively eliminated the ability of member-owners to nominate directors for board openings. (link)
In the post Who is Responsible for Credit Union Democracy, I summarized these changes:
The two largest FCU’s quietly changed the required number of signatures for member nominations for the board. In both situations the change removed the 500-signature standard bylaw and replaced it with a percentage of members. For Navy this new signature requirement was 26,000 and for PenFed 5,800 based on their latest reported member counts.
Now the trifecta for the three largest credit unions is complete. In 2023 and 2024 SECU NC had contested board elecrtions. In the first year, member nominated candidates defeated the board selected ones. The next year the board nominated candidates won with tens of thousands members casting ballots.
In 2025 there was no contested election at SECU. The board chosen candidates were seated by acclamation. In this post Jim Blaine, a member and former CEO, gives a summary of this voting process (link) titled The SECU Annual Meeting: Isn’t this a Losing Struggle?
It is not just the Big 3 who have shut down member elections. It has become the standard operating practice for all but a few credit unions. So does it matter? Why worry if everything seems to be going OK?
Voting determines who holds the political power in the credit union. Without choice, power is concentrated in directors and CEO’s who assert responsibility but not answerability to the owners. The credit union model becomes compromised, and leaders gravitate away from member needs and value to their views of organizational success.
Absent proper governance via director elections, the cooperative model descends into a system of autonomous, independent financial oligarchies. They take generations of member-generated collective wealth to run their personal private organization. Credit unions are increasingly financial islands protected by seawalls from taxation and the traditional market indicators or measures of accountability.
Managing financial wealth is an intoxicating and addictive activity. It symbolizes and enables the exercise of power in every sector of society. For many individuals, it is the ultimate indicator of personal success and meaning.
What was once common wealth has become privatized. The cooperative model is merely a veneer from a prior era of innovation. And to keep the critical advantage of no taxation.
Ultimately the perversion of this primary check and balance by coop owners will lead to safety and soundness issues where credit unions combine out of fear or greed. The public perception will be that multi-billion dollar credit unions no longer serve a unique public purpose or need.
For some this is the inevitable outcome n a society that worships capitalism and wealth accumulation. For others, it will be an opportunity to innovate and find new ways to bring the common good to areas of personal needs.
In his 1951 book Credit for the Millions, author Richard Giles has just one data chart. It is used to document an extraordinary example illustrating the author’s thesis of the criticall role of credit unions providing loans for working class Americans.
The first two decades of the Decatur-Wabash Credit Union chartered in 1928 are told in a case study of a whole chapter, Working for the Railroad. The success of this state charter was so great that by 1945 the credit union’s loan outstandings of $1.005 million were over .80% of the total loan balances for all credit unions.
Following are highlights from the case study. Its evolution is a remarkable tribute to the power of cooperative credit.
The chief rail clerk of the Decatur roundhouse of the Wabash Railroad was Richard Long. He had read about the new credit union idea.
Railroad’s clerks need for credit was “insatiable.” Credit union founder Roy Bergengren made a brief transit stop in Decatur to change trains, met with Long and left the legal forms to start a credit union.
By yearend 1928 this new charter had 142 members, 44 borrowers, assess of $1, 738 and an average loan balance of $22.25. The following year the credit union “took off” with 732 members and total assets over $22,000. The average loan balance doubled in size.
Then the Great Depression hit. New loan balances fell from $40K per year to $10K. But in 1935 the credit union took three initiatives that recaptured its growth momentum. As industrial activity began to recover, the credit union opened its membership to all employees of the Wabash railroad from Buffalo to Omaha.
Secondly it offered life savings and loan protection insurance after CUNA was organized in 1935. Finally, to serve all Wabash employees, the credit union began payroll deduction for its savings and loan accounts. Credit union policy required a regular savings program to obtain a loan.
Membership took off growing from 1,000 in 1936 to 6,702 in 1949. The free life savings and loan protection insurance was an important benefit drawing new members. The treasurer (CEO) of the credit union stated the benefit was the primary reason for extraordinary growth. The author provides specific examples of insurance payments for individual accounts and circumstances.
The one policy that was not universal among credit unions was the compulsory savings requirement to obtain a loan. As summarized by the author: “Most credit unions were afraid that it might alienate borrowers. The fact that it has not done so to any perceptible degree in Decatur-Wabash seems to prove that perseverance and sincerity can overcome almost any obstacle. Perhaps it should also be pointed out that the policy, like all the other Decatur-Wabash Principles is subject to review at all time by the membership, who can unseat their board of directors or reverse their policy at any time. The members have accepted compulsory savings because it presumably makes savers out of borrowers.” (pages 117-118)
The book’s purpose is to describe how critical credit unions were in meeting consumers’ need for credit. In this case study he describes the circumsances that made its lending so pivotal. Loans secured by savings were granted immediately. Emergency loans are granted by telephone. The two primary loan purposes were for medical expenses and household improvements. The credit union had not entered auto lending at that point.
The only chart in this 200 page book is the yearend loan balances of all credit unions from 1940 through 1947 compared to Decatur-Wabash’s total loans outstanding (page 119). This one credit union’s loans grew from .25% to . 62% of all credit union outstandings in these eight years. The peak percentage was in 1945 at .80%.
In 1947 there were 8,930 active credit unions (3, 845 FCU’s and 5,085 state chaters). In less than one generation of leadership, Decatur-Wabash had become a leader showing how a single startup can lead an industry even in the uncertainty of the depression and the the financial priorities of WW II.
It is a case study which is a factual and detailed tribute to a remarkable run of performance and the power of democratic governance. My only question: What happened to this charter? I have not found the rest of the story, if anyone has this information.