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.
America’s Declaration of Independence opens with words that inspired a new era of world wide democratic political revolutions. No more rule based on divine right, inherited position or pure force. The words:
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.
Centuries later America strives to achieve these ideals, Even with our imperfections and unfinished dreams, individuals and countries around the world are still inspired by America’s past and its future hopes.
,Democracy and its embrace of individual freedom is an ongoing challenge. One of the contributing factors is that the very freedom that encourages debate, dissent and speaking truth to power is used by all points of view. The irony is that some of those view oppose the very values in the opening words of the Declaration.
Changing the status quo, let alone prior error, politically, culturally or economically for America has never been an easy or quick task. Necessary reforms are opposed as threats to existing structures of power and privilege.
This has always been the case. Some divisions can take decades, or generations, to heal or overcome.
Righting the nation’s or an institutions misdirections is never an easy task. But It is also an opportunity for new voices and. new geneations of leaders.
The shortcomings between our cooperative ideals and our daily realities are part of the credit union story. This challenge was recognized by the founders of the movement.
The challenge of member-owner rights and democratic governance is even more critical in today’s $2.5 trillion cooperative financial sector. Credit union leadership is increasingly exercised as a privilege for the few not a responsibiliy shared with the many member-owners.
The rich and diverse legacy built by generations of loyal members is being swooped up in a merger frenzy driven by personal greed and ambition. Whereas many other leaders have remained dedicated to the unfinished work that still exists in their communities.
Cooperative history is about more than the thousands of volunteer founding stories and their earlier efforts to build a new financial system of worker and community groups. It is also about those with courage to call attention to our moral and economic challenges that could be the focus for cooperative solutions.
Those voices are present today. But is their call to rediscover who we are and who we can be in the present circumstance of business dynamics, social and political turmoil being heard? Will the ever present siren appeals of market opportunity drown out our special founding goal of public purpose?
On this national holiday, he country is again having this critical conversation about our past and future greatness. So too are credit union leaders.
My hope for how we will respond to the present challenges as a movement and as a country is based on two factors: our moral conscience and our history of doing the right thing in time. Our individual duty as citizens and as cooperative adherents is to be a witness to what we believe in our daily acts.
Nowhere is this combination of America’s lofty aspirations and human reality more evident than in one of the most well know song based on the poem, America the Beautiful.
The author, Katherine Lee Bates; (1859-1929) was inspired by a trip to Pikes Peak in 1893, Katherine Her poem first appeared in print on July 4, 1895 in The Congregationalist, a weekly journal.
All eight stanzas open with praise for America’s glories (purple mountain majesty) and accomplishments (pilgrim feet). But each verse then closes with a prayer, a call for grace or a plea. America’s beauty is both her past and the promise of a better future.
Here are he versus edited to show first the real glory of America and then the ongoing needs:
O beautiful for spacious skies, For amber waves of grain,. . . God shed His grace on thee, And crown thy good with brotherhood From sea to shining sea!
O beautiful for pilgrim feet Whose stern impassioned stress, A thoroughfare for freedom beat. . . God mend thine every flaw, Confirm thy soul in self-control, Thy liberty in law!
O beautiful for heroes proved In liberating strife, . . .May God thy gold refine Till all success be nobleness, And every gain divine!
O beautiful for patriot dream That sees beyond the years, . . . God shed His grace on thee, And crown thy good with brotherhood From sea to shining sea!
Oh beautiful for halcyon skies For amber waves of grain . . . God shed His grace on thee, Till souls wax fair as earth and air And music-hearted sea!
O beautiful for pilgrim feet Whose stern impassioned stress. . . God shed His grace on thee, Till paths be wrought through wilds of thought By pilgrims foot and knee!
Oh beautiful for glory-tale Of liberating strife, . . Till selfish gain no longer strain The banner of the free!
O beautiful for patriot dream That sees beyond the years, . . . God shed His grace on thee, Till nobler men keep once again Thy whiter jubilee!
.(https://www.youtube.com/watch?v=zEDv5xG3rxE&t=26s)
One of America’s founding ideals is captured in this poem with its familiar and oft-quoted final lines from her “silent lips:.”
The New Colossus
Not like the brazen giant of Greek fame,
With conquering limbs astride from land to land;
Here at our sea-washed, sunset gates shall stand
A mighty woman with a torch, whose flame
Is the imprisoned lightning, and her name
Mother of Exiles. From her beacon-hand
Glows world-wide welcome; her mild eyes command
The air-bridged harbor that twin cities frame.
“Keep, ancient lands, your storied pomp!” cries she
With silent lips. “Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!”
Emma Lazarus, written in 1883, on the Statue of Liberty
One of many possibilities beyond the “golden door” was begun some 25 years later during one of America’s earlier progressive reform eras. St. Mary’s Bank, the first credit union, was organized in 1909 by a priest to help workers in a factory with small personal loans. From that small seed, today’s cooperative financial system has grown to $2.5 trillion serving tens of millions of American consumers.
More than seventy years later, a new era of credit union potential was launched. This new chapter was described by the Chairman of NCUA in his Three Freedoms speech to the Massachusetts CUNA league’s Annual meeting on November 3, 1984.
Freedom is commonly understood to be free from something that limits or controls an individual’s actions by fear, want, arbitrary rules or sometimes coercion.
But freedom also enables individuals and society to undertake collective efforts essential for living in communities in which interdependency is crucial for the well being of all. This “empowering” opportunity is how Callahan described the transforming outcomes of deregulation for the credit union system.
The changes in government’s role had provided a new context where credit unions were enabled to make decisions not previously open to them. The upshot of these multiple efforts were described as three freedoms
* Freedom of security: credit unions have their own unique cooperatively structured insurance safety net (NCUSIF) and liquidity fund (CLF).
* Freedom to compete: credit unions could now make their own business decisions on products, services and interest rates for members;
* Freedom to serve: credit unions now decide who their membership will include (FOM choice).
Cooperative design combines individual choice in an interdependent-cooperative financial system founded on self-help, self-governance and self-reliance. Not private capital or ownership or government subsidy.
By 1984, the foundation had been set for a quarter century of deregulatory leadership by cooperatives until the regulatory backlash from the 2008 financial crisis.
With its focus on personal financial opportunity, credit union purpose promotes the country’s founding pursuits of life, liberty and happiness. Cooperative choice is a special American innovation entered though Lazarus’ golden door.
In his many credit union presentations, Ed Callahan described credit union’s future potential as a “Sleeping Giant” or “America’s best Kept Secret.”
This was also a vision in an American folk and labor protest song written in 1948 by Les Rice. He was an apple farmer in Newburgh, New York, who also served as president of the Ulster County chapter of the Farmers Union.
He wrote a song out of frustration during the post-WWII years. As small-scale farmers were being squeezed by large agricultural corporations that dictated the prices for produce and overcharged them for supplies.
The lyrics in The Banks Are Made of Marble contrast the labor of working-class people, including farmers, seamen, and miners, with the vast wealth of the banking and corporate elite.
The repeating chorus points out the stark inequality: the vaults are filled with the wealth that the working class sweated for, while real people struggle. The last two stanzas predict the rise of banks owned by the people:
I’ve seen my brothers working,
Throughout this mighty land,
l prayed we’d get together,
And together make a stand.
Then we’d own those banks of marble,
With a guard at every door,
And we would share those vaults of silver,
That we have sweated for!
(https://www.youtube.com/watch?v=umMTkHnnJag&t=13s)
.
As we head to this Saturday’s national celebration, this week’s posts put credit unions’ role in the context of the country’s ongoing pursuit of “life, liberty and happiness.”
The country’s fulfillment of its ideals has not been a straight line for either individuals or our collective accomplishments. Independence and interdependence in our common life often seem at cross purpose.
Credit unions operate in an economy dominated by capitalist ownership and the incessant drive for financial success, individually and corporately. The cooperative way is a decision we must actively choose for ourselves.
As one commentator observed: It is almost impossible to turn away from what seems like the only game in town (political, economic, or religious), unless we have glimpsed a more attractive alternative. It’s hard to imagine it, much less imitate it, unless we see someone else do it first.
Cooperatives are designed to meet individual needs with collectively managed resources in a democratic structure. Theory and practice unfortunately do do not always align in specific cases. As in the country at large, credit unions must constantly strive to achieve their goal of enhancing members’ economic freedom.
Credit unions’ ongoing challenge to be an alternative to the dominant ethos is not new. It is a struggle for individuals in all generations as described in this story-poem.
During World War II, Grandma Shorba
handed plates of bread and meat to strangers
who asked for work in exchange for food.
After chopping wood and mending fences,
the lean, stoop-shouldered men went on their way.
“May God watch over them,” Grandma said.
I was glad I didn’t have to follow them
down the long train tracks silvering west.
I didn’t want to sleep beside a strange campfire
around the bend, in the next world.
But I worried how they’d survive, and asked
my parents if they could live with us.
My begging only made everyone nervous.
Maybe Grandma’s stories of The Good Samaritan
and the Loaves and Fishes weren’t true?
If I’d been in charge, I’d have asked those men to stay—
but Gramma, who trusted God,
fed them, then sent them on their way.
We all have a dream in which life’s contradictions are resolved. A home where we don’t have to face all the ambivalent choices of life This dream of perfection. of “a city on a hill” motivated America’s founders. Credit unions are one example of searching for this “home where no storm clouds roam.”
Credit unions are a uniquely American accomplishment. In just over 100 years an alternative, member-owned financial choice is thriving in a system dominated by privately owned, profit making institutions. And in doing so they constantly strive to bring “unclouded days” for members.
(https://www.youtube.com/watch?v=CE3nN6IvlGA)
Today credit union momentum for the 250th birthday of America was interrupted by a Supreme Court decision. The 6 – 3 conservative majority ruled the President had authority to fire members of independent agency boards established by Congress to be partially shielded from total Presidential direction.
The decision overturned almost 100 years of precedent. It means Trump’s firing of NCUA board mebers Harper and Otsuka will be upheld by lower courts where the case is on hold. Trump may then choose to select two new board members to join his recently nominated Chair John Crews, a republican working in the Treasury Department. Or he could leave the positions vacant.
This event and its conseqences will be greeted with mixed reactions by credit union supporters.
But history can also provide us perspective to the current moment. And more importantly, point the way forward.
————————————————————
NOTICE TO THE PRESS
The President has accepted the resign.,tion of Herman Nickerson, Jr., as Administrator of the National Credit Union effective upon the appoint ment and quaJification of a succes sor. He was appointed on September 15, 1970. There is no successor to announce at this time.
This week ends with the 250th July 4th national birthday celebration.
It is a moment of community consequence for a country founded on ideals and a vision begun with the words all men are created. . .
Our implementation of this founding declaration has been uneven. Even with ever increasing economic prosperity that leads the world.
So this milestone celebration creates ambivalent feelings for many who believe our vision is falling short in critical areas of our national life together. For example, those whose families came to America from far away and many who believe immigration has been a source of America’s international standing and internal strength.
Likewise there are strong parallels in today’s credit union story which spans less than half the country’s.
The movement was founded on an ideal that cooperatives could be an alternative to the for-profit capitalist motivation which viewed consumers as profit centers.
Credit unions’ financial success is impressive. These institutions are now the second largest depository system in the country with $2.5 trillion in assets and generations of members numbering in the tens of millions.
However, as financial success is achieved, some ask if the system has lived up to its aspirations.
For in America today, as Jim Blaine stated decades ago, “those who have the least or know the least, pay the most for financial services.”
There have been significant contributions by the movement’s founding mothers and fathers that have given credit unions a legacy to be proud of and a system that can do great things for individual members and their home communities.
But as in the country’s celebrations, there are concerns that the founding ideals are being lost. There is increasing evidence that in some credit unions, and as common practice in many, the impact is to actually widen the gap between those who are well off and those who live on each pay period’s income.
To address any ambivalence you may feel about either our country’s or our movement’s histories, or current challenges, I want to select music that honors our aspirational goals as a nation and as individuals.
When words are sung, their meaning is amplified and transformative.
Visions never die. They lie dormant until leaders arise to challenge our ambitions, to call us to our higher selves and to ignite hopes that spark everyone’s individual pursuits–of life, liberty and happiness.
Here is an anthem for the credit union movement’s collective purpose: Hard Times Come Again No More. Written by Stephen Foster in the 1850’s, it addresses the cycles of economic reality and the collective willingness to help each other when these circumstances occur.
(https://www.youtube.com/watch?v=5Fddr0CTflQ)
One of the vital initiatives Ed Callahan took as Chairman of NCUA was to take the monthly public board meetings “on the road.” Over a period of two and half years, public board meetings wewre held in all six regions. Often in locations that coincided with already planned league or national conferences.
For example the July 1982 board meeting was held in Chicago at the same time as NAFCU’s annual meeting. That was the same weekend that the Penn Square bank failure occurred. Because of credit union investments with uninsured Penn Square Bank CD’s, the Board meetingt attracted widespread interest.
The purpose of these outside the beltway public events was to give credit unions a chance to attend meetings and see the board at work. In addition the visits often involved credit union conversations, local newspaper interviews, all which raised the profile of the credit union system and the movements embrace of deregulation. The visit from DC raised the profile of an areas credit unions and their contributions to their their communities.
These interactions created awareness of NCUA’s activity and leadership. It gave senior DC based staff direct conversations with credit union leaders on their home turf and in the various economic circumstances around the country.
Each board meeting was followed by an open press conference where Chairman Callahan and staff would answ questins from the media and credit union attendees.
Yesterday’s NCUA board meeting was broadcast live, an effort going back years and accelerated by COVID’s cancellation of inperson events. It is a practical way for many to watch a distant public meeting live or later by video. While interaction is not sought, the slides and other presentation data can be downloaded by viewers.
Decades later this board live broadcast have replaced the on-the-road visibility which was discontinued after Chairman Callahan’s tenure ended in 1985.
But does it make a difference whether Board meetings are viewed via digital broadcast or in person in a physical serrting?
Tim Calkins is a marketing professor at Northwestern University’s Kellog Management School. He uses remote learning sessions in both his class room lectures and private consulting assignments.
The Covid epidemic nade virtual delivery a necessity. The use of remote, live virtual meetings has continued as an accepted option for many organizational inernal management meetings as well as public events such as member annual meetings. Sessions can be interactive and seemingly similar in content to in-person events with the same purpose.
Moreover, virtual events can be a more effective use of time by both presenter(s) and participants. No travel, recordings can be made at once, and AI edit summaries produced. The reach can be unlimited by audience size, location, or time zone. What’s not to like?
Following is Tim Calkins’ assessment of why in-person still brings benefits that virtual sessions cannot duplicate from an article he posted last week:
The Project
Over the past quarter, I’ve had the chance to work with a leading company on a competitive situation. There were new entrants in their industry and the company was formulating a response. This was partly a strategy question and partly a political question: getting the team and the senior people on board.
I did the project remotely. I taught a class session for the team on Zoom, had multiple phone calls and then participated in two team planning sessions in a hybrid format.
The Problem
The project is winding down, and I’m not feeling great about it. I think I made a positive contribution, but not as much as I could have, for a very simple reason: I wasn’t there.
This wasn’t a problem for the class session; I can teach effectively on Zoom. It was definitely a limitation in the work session.
There were lots of problems with being remote. The first issue was that I couldn’t hear much of the conversation; I was picking up about 60% of the discussion. I could follow along but I missed some of the context. Then, it wasn’t easy for me to jump in; I didn’t know how I was showing up in the room, so I found it awkward to make a comment. I also couldn’t read the room. I couldn’t see how my comments were being received. Were people nodding and agreeing? Or rolling their eyes?
Perhaps most important, I wasn’t there for the open times: before the meeting, during the breaks, after the meeting. These liminal times are critical when it comes to influencing and building relationships. During a break one can follow-up on a comment, ask a question to clarify a point or just build a relationship.
In hindsight, I should have insisted that to take on the project, I had to travel to the company for the key meetings.
I didn’t do this because my schedule has been hectic, so travel would not have been easy. And the company didn’t request it; they routinely did hybrid and remote meetings.
The Learning
My takeaway is simple: don’t do a strategic project if you can’t be physically present.
I don’t need to take on company projects; I only accept a new program when I think I can add value and will learn something.
Going forward, I’ll pick and choose with a bit more care. I’ll still teach remotely, but I’ll only do strategy working meetings when I can be in the room.
Might a new NCUA Chairman revisit the idea of taking Board meetings on the road? Such events could accelerate relationships, learning about local credit union circumstances and most importantly, building trust that can only be created person to person.
If Senate hearings proceed as planned and Trump’s nominee for the next NCUA chair is approved, todays board meeting will be Hauptman’s final time as NCUA’s solo leader.
As he departs, NCUA situation is like a suitcase without a handle, or wheels. The agency is being led by a single person, not the prescribed board. Its operataing capacity has been reduced by a DOGE induced, staff designed elimination of 20% of its workforce.
Hauptman’s major initiative has been to “flood the zone” with over a dozen regulatory revews addressing such urgent issues as banks purchase of credit unions versus the operational realities of credit unions purchase of banks.
The agency continues to publish a repeating loop of bureaucratic processes such as banning people from further activity in credit unions or periodic issuance of credit union data. When the nexr administrator opens the suitcase, he is likely to find little addressing critical cooperative or administrative management issues, e.g. the effectiveness of agency examinations. One indicator is the growing list of summary liquidations from sudden discoveries of significant, long term large operating deficits.
Hauptman has held board meetings “only as necessary.” His solo tenure of almost 15 months is an example of the shortcomings of a single administrator without either credit union context or regulatory experience. However that resume gap is not unique to him.
Such appointments, especially as Chair, mean the learning curve for new leadership is extended and there is total dependence on the bureaucracy’s agenda. More critically, there is a lack of relationships and knowledge of the credit union system and its different leadership elements. It narrows the understanding of issues from both an historical perspective as well as key differences about current system priorities.
The result is that the cooperative system’s uniqueness and capacity are underestimated. Critical issues are viewed from the more familiar perspective of the banking system. And the siren call of some lobbyists for the false standard of “parity” becomes a basis for decisions.
There has been a vacuum in regulatory leadership at both the state and federal levels for some time. It is hard to think of a comment or action taken in either system that addresses important trends and issues in a considered manner. The issues silently observed include purchases of banks, the merger frenzy driven by CEO payouts, the absence of real member governance rights, and zero transparency in credit union strategy and cooperative accountability to owners.
Leading NCUA is not a one-person job, It requires both administrative oversight plus constant dialogue and initiatives with credit unions, collectively and individually.
Right now NCUA’s suitcase is pretty light. It may be easy to lift without a handle. But sooner or later the movement will experience the consequences of a regulatory system that has no cooperative agenda or engaged oversight.
As the regulatory grasp and staff effectiveness erode, this will create a series of reactive responses to ideological/political priorities or to inevitable external problems or crisis. The system will be at the mercy of events without informed and committed regulatory leadership.
In the CEO’s words: At Good Neighbors we do not have a “growth” strategy; we have a “strength” strategy. Which is to say that we are not looking to increase members by numbers but instead are trying to grow members intentionally by focusing on those who are philosophy/mission aligned and who want to participate as owners. This is because we no longer have exclusively our closed SEG group and are instead tasked with building our own common bond.
Co-op fest (Buffulo) is a great opportunity to meet others in the area who are like-minded and tell them about the credit union. My friends at Cooperation Buffalo call these people the “coop curious” – people who are open and interested in learning more about cooperatives.
We participate in the Cooperative Fellowship.
From that website:
Cooperative Changemakers: A Community Power Fellowship is an intensive 11-week training for cooperative entrepreneurs and advocates building an economy that puts people first.
Cooperative Changemakers aims to activate and empower those interested in joining and contributing to Buffalo’s growing cooperative community. The Fellowship fosters collaboration, knowledge sharing, and the development of skills essential for building democratic power in our communities.
Participants have the opportunity to engage with local cooperators and develop actionable plans to bring their visions to life. The Fellowship seeks to cultivate a vibrant and engaged community of cooperative entrepreneurs and advocates, driving positive social and economic change in Buffalo.
Source: Thank you Emma Smalley, CEO, Good Neighbors Credit Union
At a recent reunion a colleague told a story of his granddaughter’s college interview. The panel was professors and tutors from the college. Her area of study was liberal arts not science.
How might you or your grandchild have answered?
She paused for a time, then said: ” I don’t know the answer. But here is how I would test to determine what might be the situation.”
She was admitted to the college.
Many personal decisions and business options do not have factually provable answers. Such as 1 + 1 = 2. Experts, analysis, prior examples and other learning can suggest possible options. But ultimately many outcomes are unknowable and require reflective judgment.
Last week a credit union professional asked, do credit unions have too much capital.? He provided no background, just the question.
I asked several credit union leaders how they would respond. Their universal answer: “it depends.” They said each credit union’s circumstances are different–the member base, the area’s economy and multiple other factors. . This is something each credit union must determine for itself.
This may be procedurally correct. However, is there a conflict as the persons making the decision benefit most from overcapitalization? One former CEO of a large credit union publicly stated that a net worth ratio over 7% is “stealing from the members.”
Higher net worth takes some of the performance pressures off management and boards. Unlike public companies, there are no market comparisons forcing them to meet a minimum level of return on equity, or ROE. This is the primary measure of effective capital management.
Is a more objective standard required? The distribution of capital ratios suggest the question of overcapitalization is widespread.
This is the distribution of net worth ratios for all credit unions at yearend 2025. NCUA’s rule states that 7% equity ratio is considered well-capitalized.
|
Net Worth Ratio
|
# of CUs at
12/31/2025
|
Total Assets
|
|
13+
|
1,982
|
$408,743,666,638
|
|
12-13%
|
422
|
$246,934,302,564
|
|
11-12%
|
457
|
$520,062,897,151
|
|
10-11%
|
514
|
$523,027,212,223
|
|
9-10%
|
499
|
$428,895,471,832
|
|
8-9%
|
304
|
$264,042,605,226
|
|
7-8%
|
136
|
$57,902,263,277
|
|
<7%
|
61
|
$7,407,376,727
|
| TOALS |
4,375
|
$2,457,015,795,638
|
At the highest ratio level, 45% of credit unions hold 17% of assets or almost double the well-capitalized rule. A number of these are smaller credit unions, but there is at least one top ten credit union in this tier.
Most credit unions report annual increases in net worth, no matter the level, as a success indicator. The common expectation as to how much capital is enough is one word: more.
Because leaders may not know a precise answer, this does not excuse the need for objective processes and relevant comparisons for setting a maximum level and for returning excess net income to members. Effective capital management begins with ROE. Pubic markets generally expect outcomes in the 10-12% range as the minimum standard.
Do plants have feelings? The too much capital question can be answered by every credit union. The analysis should be transparent for members. It is an example of management’s accountability to members of their stewardship of the collective savings.
Public presentation of a capital cap is a sign of thoughtful management. “More” is not a capital plan. Nor is an ever increasing net worth ratio a success.
A cap may even be more important in an era of market exuberance with bank buys, fintech investing and crypto partnerships announced almost daily. A capital maximum could bring some much needed discipline in situations where overcapitalization seems to be “burning a hole in management’s pockets.”
When capital exceeds the well-capitalized level (7% for credit unions) organic growth is sometimes never enough to satisfy ambition. Acquisitions come next. A current example.
From Jamie Dimon , CEO JP Morgn on organic growth and acquisitions:
| “If you sit around a lot of management meetings, the first thing they do when they’re not doing well in organic growth is they start to bulls—t about M&A.” |
| — JPMorgan Chase CEO Jamie Dimon, explaining that he warns his team not to get lost in pipe-dream deal talks instead of improving their own operations.
And yet, Dimon today announced that the bank could consider an acquisition worth up to $20 billion in the next few years now that it has greater flexibility from regulators to spend capital. WSJ May 27, 2026 |
Tomorrow’s followup: with credit unions’ average net worth over 11.3% at March 31, 2026, do individual coops have excess capital? Are these billions of equity above required amounts fueling bank acquisition efforts? Or fintech investments?