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.
Freedom is based on democratic elections. In these contests, there will be winners and losers.
In the current Presidential election a major portion, 45% or more of voters, will be disappointed that their candidate did not win. One candidate has yet to even acknowledge the results of the 2020 contest!
Contestants and their supporters pour their hopes, resources and emotions into the campaign. It is hard to accept a loss. But recognizing that outcome is what is required if democracy is to prevail. And if one is still committed, prepare a Plan B.
The October board contest for the four open director seats at SECU (NC) was hard fought over issues raised two years earlier. It is a rare, but vital example, of the members’ governance role in a large financial cooperative.
SECU’s election process favored the incumbent directors who were renominted by their board peers. The credit union promoted their support on social media and in PR posts.
For the member-nominated candidates and their supporters it would be easy to cry “foul” and argue the process was weighted against them. For it was.
However that was not the stance posted by Jim Blaine, the voice of the opposition candidates, who heard these complaints.
On the day after the election results were announced, he posted the following blog:
… hard to miss that statement!
In case some of you missed it (and some of us wish we had!), the SECU membership voted by a 2 to 1 margin at the Annual Meeting yesterday to elect the four incumbent directors Bob Brinson, Mark Fleming, Stelfanie Williams, and McKinley Wooten
The election was hotly contested and @100,000 SECU members participated in the election and balloting process – a remarkable turnout. A healthy sign of member interest and participation! As you’ll note from the resulting flurry of blog commenters, there was much excitement and disappointment.
What you can’t see are the numerous deleted comments complaining about a rigged election and unfair tactics, etc, etc. I happen to believe the board election process was fair – period!
We all need to “get over” the whine that if our views don’t prevail, that something underhanded was done – not so. And, that doesn’t apply to this election only, if you know what I mean.
Now, if some of you suspect that my views haven’t changed on the key issues, then we understand each other well. The reports given at the Annual Meeting provided some interesting information which we will analyze over the next few days. That review may help create a “baseline” of financial facts, against which to measure the progress of SECU, as it moves on into the future.
😎 Personally, congratulations to the new directors and – as always – I wish State Employees’ Credit Union and its staff well!
Democracy works when losers recognize the results. The next step if you believe your point of view and the election was somehow flawed is straight forward.
The corrective if one believes an outcome is not in their interest, is to practice more democracy. Get back to your feet and ready to run the race again.
The annual election of directors is a critical process that transforms members into owners. It is a “habit to be practiced” if credit unions are to fulfill their unique role in America’s financial system.
In a political or financial democracy, contested elections are the foundation for all our freedoms. Both winning and losing parties must support the outcome-period, as Blaine affirms. Then everyone wins.
This week’s blogs are video excerpts of wisdom from credit union leaders, some retired, some still active. (best seen in browser mode)
They still speak to our present circumstances as their core messages are timeless.
These two videos go to the heart of what makes Wright-Patt, Dayton Ohio a leading credit union.
The first is a one minute video by former CEO Doug Fecher on how credit unions succeed by showing members the difference. “We listen to them and act in their interest.”
(https://www.youtube.com/watch?v=MYWkI0eY8Z0)
This second video from Wright-Patt CU is members telling stories of how the credit union helped them to buy or to stay in their homes. This was recorded right after the financial crisis caused many financial institutions to foreclose on home owners. This illustrates the credit union’s goal of “showing the credit union difference” from the first video.
(https://www.youtube.com/watch?v=yMJT0nneRaM)
This week’s blogs are video excerpts of wisdom from prior credit union leaders. (best seen in browser mode)
They still speak to our present circumstances as their core messages are timeless.
Grantng credit is the primary function of a cooperative. In the last 20 years risk based pricing has become the dominate practice for consumer loans. It appeals to conventional wisdom. Those who have financial success should not pay the same rate as those who have blemished credit.
However, credit unions were supposed to be a paradigm shift from the free market theory that anyone should have credit available-at the right price.
Jim Blaine, former SECU (NC) CEO, believes the initial credit union lending approach is core to the cooperative model. Risk based pricing for loans discriminates against those who most rely on credit unions for a fair deal.
In this three minute video from 2010 he provides his logic. Although retired in 2017, he continues to expand his arguments with recent studies in his blog SECU-Just Asking.
One interpretation of Jim’s approach is in this 2010 GAC interview with Wayne Vann, CEO of NavyArmy Credit Union (now Rally CU). His two keys: putting a pulse to every loan and the autonomy of lenders to make decisions. (1.14 minutes)
(https://www.youtube.com/watch?v=rSXa3T8iGTY)
This week’s blogs are video excerpts from prior credit union events. (best seen in browser mode)
Today’s are brief CNN and CNBC news excerpts recommending credit unions as an option consumers should consider.
This short clips are during the 2010 financial crisis They tell why credit unions might be a better choice.
They highlight the system’s reputation earned during the 2008/2009 financial crisis as a reliable source for loans as banks were forced to draw back.
(https://www.youtube.com/watch?v=H0dNHDsFvuE)
The following CNN excerpt compares credit union and bank average rates as part of Why Credit Unions are Better.
!https://www.youtube.com/watch?v=I_CaoDPGl7Y)
Credit unions described as an unusual source for home loans during the financial crisis.
(https://youtu.be/EwbLgsyWcjI)
What would the news report about credit unions today?
This blog series uses video excerpts with wisdom from prior credit union leaders. (best read in browser mode)
They still speak to our present circumstances as their core messages are timeless. Both excerpts were in response to the regulatory “backlash” in response to the 2008-2009 financial crisis.
The first video is a very brief excerpt from Jim Blaine, CEO of SECU (NC) in 2010 reacting to the prospect of increased regulation prompted by the financial crisis (37 seconds). His view is then referenced in the second video.
(https://www.youtube.com/watch?v=E1tnDcE6Xjo)
In 2010 Dave Serlo PSCU President analyzes credit union performance during th 2009 financial crisis in a talk called Different by Design. The context was PSCU’s annual users’ meeting.
In this 14-minute presentation he cites Jim Blaine’s remarks on regulation. Most importantly he outlines opportunities for credit unions and the “credit union promise.” He closes with four priorities for the CUSO. Now is the time to be on offense, especially for expanded lending.
Dave was a remarkable speaker using no notes or other prompts. Most importantly is his deep insight into the power and importance of the credit union model and CUSO collaboration. His final words still resonate: Carpe Diem, seize the promise of this day.
(https://www.youtube.com/watch?v=6uS7Zl3lROE)
This blog series uses video excerpts with bits of wisdom from prior credit union leaders. (best read in browser mode)
I believe they still speak to our present circumstances. For the core of these observations are timeless.
Doug Fecher (now retired) CEO of Wright-Patt Credit Union, Dayton, Ohio speaks to the ultimate mission of the cooperative. (just over 1 minute)
(https://www.youtube.com/watch?v=tE_3-ipOiPE)
Later in the series, there will be an example of how the credit union implements his vision.
Readers may be aware of my interest in and support for Ukraine in their fight for freedom. Occasionally I write posts about events in this country under daily attack by Russia.
There are many opportunities to support Ukraine from direct donations to organizations in-country to funding students and persons living in the US and other countries of refuge.
I just learned about another long-standing organization called This Child Here founded by a Presbyterian minister in 2006. The leader is Robert Gamble who tells of his initial work with homeless youths in the disrupted society following the country’s independence. This effort came in mid career, after serving five years in the Coast Guard and then attending Princeton Theological Seminary to enter the ministry. He has served as pastor for five churches throughout the denomination.
He writes in 2007 of his initial experience working with an NGO in Ukraine to help homeless youth:
You don’t have foster families in Ukraine. No one can afford another child. “You have three children,”a taxi driver said to me, “you must be a rich man.”
While I am here there are times I drink too much but most times too little. I spend like a poor man but live a life that is rich. I listen to idiots, skeptics, learned people and fools, I learn from the suffering of children. I doubt and trust, give away and receive. I get robbed and restored, applauded and shunned.
I see churches void of life and attended worship with more life than my comfort zones can handle. I gave one sermon; it wasn’t in a pulpit , and I didn’t wear a robe . I stood on a rented stage in an old movie auditorium and it hardly lasted seven minutes, but I felt alive and honored as every word I spoke was repeated in Russian.
Gamble’s work leading the organization now alternates between three months on the ground in Ukraine followed by three months of travel throughout the US fund raising for his 501 C 3. His current itinerary shows 98 stops with churches, local groups such as Rotary and “friends” on his September 7 to November 17 return.
His group’s purpose today:
We work with families displaced by the war. Thousands of people have fled cities in the east and arrived in Izmail, Ukraine in the west. As many fathers are in the military or still residing in places now dangerous, these families often consist of mothers and children.
We provide products from grocery stores, and centres for youth and children’s activities, including sports, music, art, and programs led by psychologists. Through these activities, summer camps, and the supportive community we have built, we offer therapy for the trauma and shock suffered by these families. This Child Here, Inc. is a Validated Ministry in the Presbyterian Church (USA).
The work is not without danger as recorded in this brief 2003 video.
When this war is over, people will read about what was done, not just between armies, but behind the lines where people help people and people change people, for the better.
This is an American who for two decades has invested his energy, mind and purpose with the belief that people changing people will make the difference in the future of Ukraine. And I believe in other societies as well, including ours.
As I learn more, I will share this person’s journey of a committed life.
On October 1 CEO Catherine Tierney entered her 49th year with Community First Credit Union. The Appleton, WI based coop is today $5.8 billion in assets serving 158,000 members with 29 branches and over 580 employees.
She posted this thank you on her LinkedIn page upon beginning her new year. I describe her post using her own words as, the gift of doing what you love:
“October 1st is a special day to me.
“Today marks a milestone of 48 incredible years at Community First Credit Union. It’s been a journey filled with growth, challenges, and countless memories that have shaped not only my professional life but my personal one too.
“From the early days of learning the business to now being part of this amazing organization’s transformation, I’m grateful for the opportunity to have worked alongside so many talented people who share the same dedication and passion for our members, our industry and our communities.
“Thank you to my colleagues, past and present, and to our loyal members for being part of this remarkable journey. Here’s to the gift of doing what you love and the joy that comes from making a difference together!”
From the archives I thought it would be helpful for people who may not met her to see how she and the credit union present their work. Following are two examples of the joy making a difference together.
The first is a short excerpt of a Catherine interview from several decades ago about how the credit union employees are the first responders for identifying members in need:
(https://youtu.be/lzAN0HXXQBo)
This second video is a story how Community First helped a young couple get started in life when they didn’t think there was any way to adopt their son and then buy a home.
(https://www.youtube.com/watch?v=d6AQbDYSmpg)
Catherine’s long service of leadership with her team is an example of what credit unions do best for their members and communities. All who believe in the difference credit unions can deliver, should be grateful for her two generations of professional member-centric commitment.
The largest member vote in a credit union board election resulted in the slate of four incumbents all winning by a wide margin.
The cumulative total vote for the four winners was 232,452 (67%). The four member-nominated candidates total was 113,117 (33%). The headline in Jim Blaine’s blog after the vote was announced: Pretty Strong Thumping!
The outcome was the exact opposite of the 2023 vote where the three challengers to the board slate were all elected. The vote was significant in other respects. Adding the highest total votes for the leaders of each slate, suggests almost (62,392 and 31,203) 94,000 or more members voted.
This is an extraordinary level of participation. It shows the interest and willingness of members to participated in the selection of their leaders. Once awakened in their role, will they continue to follow credit union events as more than a customer? Have their ownership “genes” been activated? Will next year’s election involve a choice?
The meeting was broadcast on YouTube. SECU staff had posted the results later with the full recording. Also posted are the financial summary for fiscal 2024 and links to the 54 page 2024 CPA audit.
While the vote was the main outcome, that announcement took just several minutes at the very end. The meeting’s substance were reports read by the Board chair, the Foundation’s chair (with video summary) and nominating committee chair.
The most important parts of the agenda were CEO Leigh Brady’s report and then her response to dozens of member questions sent in advance. Putting these two parts together a relevant title for the meeting’s substance might be the Leigh Brady Show.
After opening remarks on Helene’s devastation in Western Carolina and saying all employees were safe, Brady stated her personal vision as, “we work together to leave SECU better than we found it.” (1:03). She provided a summary of major financial trends, both positive and not, showed a chart of an increase in SECU’s share of member loans (25.8%), and compared its loan charge-offs for the first six months of 2024 to the five largest credit unions. SECU’s outcome (.74%) was between Navy FCU’s 2.54% and BECU’s .59%
She introduced a new SECU’s data point, its initial Net Promoter Score (63), as an indication of member loyalty. Her closing was a listing of FY ’25 priorities including new member reward or cash back credit cards, a new mortgage servicing platform, voice authentication, selection of a new core data processing vendor, replacing branch ATM’s and a new digital platform. She noted that several of these initiatives, especially the new core, will extend over multiple years.
Her presentation was well organized, detailed with graphs and comparisons, and with specific priorities for the new year. Her very full report could be a model for other CEO’s in disclosing their prior year’s results and future plans to the member-owners.
The second part of Brady’s role was spending an hour answering 50-60 questions from members that were submitted prior to the meeting.. There were few “softballs” in these queries. And while she may not have fully responded on some points, the questions were the most interesting part of this event for me, and probably the members who submitted them. Here is a small sample of some of the topics raised:
There are dozens more questions, all of which CEO Brady answered. She replied even in areas concerning board conduct and policy or in the case of the CashApp fraud loss, an internal issue.
This hour long Q&A was the most extended explanation, an in-depth discussion I have seen in no other credit union’s annual meeting. Even as it appeared most of the answers were being read from a script, she addressed each topic. Some might feel she failed to see some of the underlying concerns; but no one could argue that all the pointed, potentially embarrassing or even opposing views were not included. She stood her ground.
That stance is the final takeaway. The meeting was a very controlled event. The camera never wavered from only showing the individual speaker. Even when Brady was answering questions, the person asking them was heard but never appeared on camera.
Several times Brady acknowledged attendee’s responses to her remarks, but there was never an audience view. Board members spoke on camera, but were never shown sitting together. The Foundation video and presenter’s slides were seamlessly woven side by side on the screen with the speaker.
This YouTube broadcast was a very well-produced and visually managed event showing only the four speakers and nothing else. No chance for any spontaneity or audience reaction.
Brady closed her CEO presentation by referencing this year’s meeting to include “another contested election” that will not impede our going forward. One cannot help but come away with the feeling that this year’s event was a reaction to the two prior meetings where the board must have felt things moved out of their control. This time the outcome which had some excellent content, especially the member questions, was an exercise in the power of incumbency.
Will that exercise in authority work to promote the members’ and SECU’s long term viability? Or, will SECU just transform into another example of a large credit union similar in operations to its peers?
My understanding of the last two plus years of public controversy about SECU is that the core issue is effective strategy. While there were specific tactical topics such as risk-based lending, critics’ deep concern was whether SECU’s members would be as valued if the credit union offerings just looked like every other financial institution’s.
Aligning SECU’s products and services to conform with the majority ot its peers may certainly garner some low hanging fruit. SECU’s response to critiques of its tiered lending was its intent to “serve all its eligible members,” especially the A credit score borrowers going elsewhere.
The previous cooperative vision of “send us your moma” was centered on members who may not have had A options readily available, and needed a fair and trusted institution to turn to.
Over time this member-centric focus extended to innovations in salary advance loans, broker dealer options, life insurance, a state-wide 529 insured college savings account and even how repossessed real estate was managed. The SECU Foundation’s innovative funding model has made it a marketing presence for the credit union throughout North Carolina.
These financial service expansions were based on a belief that to beat the competition, one cannot simply emulate them. Hence when asked about offering 30-year fixed rate real estate loans conforming to Fannie/Freddie requirements, the response was, Why compete with the government’s product?
Time will tell how this most recent strategic overlay will mesh with the legacy elements on which the credit union was built: its branch structure, decentralized decisions, advisory board roles and unique partnerships within the industry.
The datapoint from the meeting that may be most relevant in this ongoing transformation is the 33% who voted against the incumbents. That number suggests a more studied understanding to integrate past success and current changes might be useful.
At 1:00 pm the Annual Meeting for SECU NC will commence. The meeting can be viewed virtually by going to the credit union’s homepage.
This is an unprecedented event in the history of America’s cooperative financial system. With an estimated 2.8 million ballots mailed or by voting online (or in person today), it will be the largest election for a cu board ever conducted.
SECU is the second largest credit union in America with $56 billion in assets. It is unusual for the member-owners of any credit union to have a choice in their directors. In this case, there are two competing slates of candidates with differing business priorities and strategies for the cooperative.
Most importantly everyone can watch this meeting live, virtually. The Agenda includes the standard reports from the Chair, auditors CEO and the foundation. This year’s meeting procedures have been changed to limit open interaction with members during the meeting.
Rule 5. Up to one hour will be set aside during the meeting for a question-and-answer session. Members must submit any questions in advance of the meeting. To permit as many members to ask questions as possible, we ask that you limit yourself to one question or topic.
The final agenda item is the announcement of the members’ votes to fill the four open director positions. Both sides have urged members to vote. There were active social media campaigns by the incumbents and the member-nominated group. These campaigns extended over 60 days once all nominees were known.
If the voting turnout is significant or should there be a split result, one probable outcome will be an energized, involved and aware group of member-owners. Once engaged in their franchise role, it could change forever the governance dynamics of the credit union going forward.
SECU’s tagline on its website with the information about the member annual meeting is:
Your voice. Your right. Your vote.
While credit unions routinely cite their democratic one vote per member-owner design, it is rarely provided in board elections. This example will demonstrate the ability of the election process for any credit union. And just maybe, reawaken member-owner enthusiasm for their pivotal role in their financial cooperative.
I plan to watch the event and report the outcome on Wednesday.