Month: August 2020

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Timeless Wisdom Following NASCUS’ 2020 Virtual Summit

“I think if you took the pulse of credit unions today, you would discover two feelings: worry over the growing authority of NCUA; and a desire for more flexibility than now exists under the charter options . . . The best remedy to this climate is a vigorous dual-chartering system, that is, both a vibrant federal chartering option and a vibrant state-chartering, non-federal share insurance. Danger grows if there is only one option. Such a climate breeds bureaucracy and lazy thinking.”

– Ed Callahan, May 2000

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Should a CEO’s Last Act be Merger?

One pattern in the 150-200 credit union mergers occurring each year is CEOs nearing retirement, using merger as a “succession plan.” After decades of leadership, their final act is to dissolve the organization that gave them the top job of their professional career.

A CEO’s Responsibility and Fiduciary Duty

Every CEO contributes in multiple ways to the “ongoing concern” of the organization they are chosen to lead. These responsibilities include developing strategy, ensuring the trains run on time (performance), defining a culture, and acting as chief spokesperson for external contacts. All for the purpose of serving members better and ensuring the continuity of the enterprise.

Succession planning is integral to this purpose. This can be a process of nurturing internal candidates and/or using external consultants.

I am disappointed for members when I read that a CEO’s final act is recommending the merger of their independent institution. The credit union has been the platform for the CEO’s leadership opportunity, industry status and professional reputation for many years.

Instead of their role as a “relay” runner passing on the baton, their tenure becomes a “sprint” to the finish and no one else gets to run.

This appears to be the situation at Xceed Financial Credit Union ($942 million) where the CEO who took over in September 2006, sent an email recommendation to members this July. The letter announced (after 14 years as the leader), the best future course of the credit union was to merge with Kinecta FCU ($5.1 billion) “to better serve you.”

The Reasons Given Members

The email listed six reasons including “a broader product lineup, higher dividends, lower fees, more robust digital banking, full Saturday banking, and expanded branch network including 22 locations in Southern California.”

No comparative facts were provided other than citing the 22 additional Kinecta branches. Of Xceed’s current nine branches, only one is in Southern California. It would seem unlikely that members using Xceed’s locations in San Jose and Menlo Park , CA (several hundred miles to the north) or the six locations in Rochester, NY, Parsippany, NJ, and Leesburg, VA, would see this “expanded” network as “better service.”

The key logic justifying this step is “joining forces will give us economies of scale” and “the combined credit union will be the 35th largest in the country with approximately $6 billion in assets.”

So, after 14 years at the helm, the CEO and board determined the credit union was no longer capable “to effectively compete in the future or deliver the products and services that you need and want.” The only solution is to merge.

The CEO assures the members the loss of their independent charter will be OK: “I fully support this merger. . . I will also be staying on as president of the combined credit union and fully intend to ensure your needs and interests remain a top priority. . .”

This assurance seems questionable after telling members the credit union is no longer viable after the CEO’s 14-year reign.

Kinecta’s East Coast Base?

The July 16 joint press release reported the CEO of the combined operations would be Kinecta’s CEO. He is quoted: “This will be great news for members of both credit unions. . .and will enhance access for Kinecta’s east coast members.”

How important is this “east coast” member base? According to Kinecta’s HMDA filings, the credit union originated no mortgages in New York in 2019 and only 17 (1.1% of their total) on the entire east coast. In 2018, the numbers were 27 east coast mortgages (2.7%); in 2017 the total was 19, 1.4% of all mortgages. Again, the purported “east coast member base” rationale seems dubious.

Members Vote After NCUA’s “Approval”

The first sentence of Xceed’s member letter states that the credit union is “seeking approval from the National Credit Union Administration,” implying that this is an action that will be duly vetted by the regulator. Only much later is it stated that “you will have the final say when a member vote takes place early next year.”

NCUA’s role is administrative, not substantive. The most important function is to approve the required member disclosures of any financial benefits gained by Xceed’s CEO and/or other employees from the merger. Until then, these personal interests are secret.

How Can Members Assess This Recommendation?

Both the press release and member letter are filled with glowing promises that everything is going to be better. There are no factual product comparisons. How can members determine if this really is a bona fide action?

Is there a way to go beyond the marketing rhetoric and vacuous assertion that size makes us better?

Or is this just a convenient exit for a CEO and board unwilling to work through succession?

The CEO and Board’s Track Record

One way to assess these promises is to look at the track record of the leadership proposing this action. How has the stewardship of Xceed’s board and CEO in the last 14 years built the credit union and served members?

In December 2006, shortly after the current CEO was chosen, the credit union reported $734 million in assets; 70,588 members, 14 branches and a net worth ratio of 11.65%.

In the June 2020 call report the same numbers are $943 million in assets; 49,280 members, 9 branches and 9.91% net worth. Three of these four measures of institutional performance are in steep decline.

The credit union’s compounded annual (CAGR) asset growth for the past five years is a negative (-0.67%) per year. The CAGR for the 14-years is 1.39% or less than a quarter of the industry’s 5.77% annual growth in the same time period. The 1.39% annual growth also includes five mergers that added $200 million in external assets and over 30% additional members during this time.

The latest financial results are equally unsettling. In the June 30, 2020 call report, the credit union shows a year-to-date loss of $1.8 million. This compares to a positive $1.7 million for the first six months of 2019, a $3.5 million downturn.

Five Prior Mergers

During this 14 years of just over 1% annual growth, the CEO completed five mergers starting with two small ones in 2008.

On December 31, 2012, the merger of the $55 million Safeway Los Angeles FCU increased Xceed Financials’ membership by nearly 20% and added a branch in Norwalk, CA, according to Xceed’s press release.

Two other combinations were in 2016 with the $102 million Reach Credit Union, Menlo Park, CA, and the $29 million Postmark Credit Union in Harrisburg, PA.

The reasons provided in these mergers are the same Xceed now uses for combing with Kinecta: greater efficiency, larger lineup of products and services, and tremendous opportunities for growth.

After five mergers, the result is the credit union has lost over 20,000 members, recorded negative annual asset growth in the five most recent years, and reduced the number of branches from 14 to 9 since 2006.

As this member and branch downsizing occurred, the credit union’s total investment in buildings and fixed assets went from $6.5 million in 2006, to $23.5 million (350%) 14 years later.

Merging in a Time of Crisis

Xceed’s board and long-serving CEO are telling members they will be better off by turning their future over to a new board and senior management team to which they have no connection. Nearly six decades (since 1964) of member, corporate and community relationships are being jettisoned with no documented benefits or plan. Only marketing generalities.

This relationship history is especially vital during a once-a-century health pandemic and in the quarter the US economy recorded it largest GDP decline ever. From coast to coast, credit unions are stepping up efforts to respond to special member needs.

Members need their credit union now more than ever. A reliable financial partner with years of familiarity of their employer and personal circumstances, is an asset. Members impacted by today’s economy are counting on institutions they supported in better days.

They want to know their years of loyalty will be honored and their individual circumstances served when facing financial uncertainties beyond their control.

It is not size but relationships that matter. Whether the credit union is the largest, the 35th or has fewer than $10 million in assets, the key is being closer to the member than any other financial option.

Members’ confidence is based on the mutual understanding, “We are in this together.” When that value is lost, members vote with their feet. To believe a merger can reverse this shortcoming will just accelerate the steps out the door.

Neither the CEO’s letter nor the joint press release mentions anything of these immediate circumstances. That signals members’ interests are not the priority.

What’s at Stake? (“Far more than what meets the eye”)

The reasons for this merger are suspect. If the members’ best interests are not the case, what could it be?

The CEO’s words suggest the motivation. The first sentence starts, “I’m excited.” This emotion is cited twice more: “We couldn’t be more excited,” and finally, “I hope you share my excitement.”

These are the sentiments of personal ambition. This is hype hiding a $1.8 million six-month loss and the long-term decline of members and market presence. This is in fact a case study of “organizational entropy.”

A change is needed, but not that proposed in the “happy talk” letter. The merger reasons are not factually grounded. It hardly enhances “convenience” for members, the vast majority of whom are across the country and far distant from the new Southern California headquarters.

Proposal Contradicts CEO’s Own Criteria

Xceed’s CEO wrote a 2010 op-ed on mergers in the Credit Union Times with the following assertions:

“At the end of the day, credit union mergers must be based on what’s best for the member (of both credit unions). At Xceed FCU, although we operate across the country, we wouldn’t merge a credit union just for the sake of expanded asset size. There’s far more at stake than what first meets the eye. . . Mergers call for serious consideration and although I appreciate the unprecedented difficult operating environment we find ourselves in today-let’s continue asking the question “What’s in it for the member?””

That’s the question members should be asking. The CEO has disowned her own criteria: “We wouldn’t merge a credit union just for the sake of expanded asset size.” That statement alone should raise doubts not just for members, but across the cooperative system.

A Test of Cooperative Democracy

This is about common good versus private interest. Credit unions have shown they cannot be beaten from the outside, but they can be undermined from the inside. The essential bonds of trust, transparency and integrity which every credit union requires are hanging by a thread.

When something appears illogical, devoid of member consideration and not right, it is time to speak up.

NCUA has proven incapable of protecting members’ best interests in mergers. That responsibility will fall on concerned members, volunteers and employees. This is a test whether democratic governance can prevail. A cooperative system is sustained only if people are willing to stand up and fight for it.

When leaders seek to end the 50-year legacy from which they personally prospered, member-owners must confront this leadership abdication. The cooperative does not belong to any one CEO or board, but to all the members.

Call To Action

Cooperatives conquer challenges based on the will of their owners to do the same. They connect with persons who see more in their cooperatives than simply a banking channel, a kiosk, a website, a phone center, etc. These owners see an organization, a community, and personal solutions worth building.

COVID has accelerated our digital persona skills. Sound the virtual alarms via Twitter, Facebook, and all networked connections. The collective’s future is at stake. The proof of the cooperative difference will be democratic action to halt this sell out of Xceed Financial Credit Union.

For further analysis read: Thoughts on Mergers: The Tallest Candlestick Ain’t Much Good Without a Wick

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The 19th Amendment Helps Enfranchise a Movement

The legacy of credit union pioneer Louise Herring (1909-1987) is vital to the creation of the modern day credit union movement. As summarized in her alma mater’s profile, she managed Kroger’s first credit union and founded a dozen more while helping to charter over 500 credit unions in her five decades of activity. To support these nascent charters, she formed local chapters, the Ohio League and the private insurance alternative known today as ASI.

Most importantly she was the youngest woman to attend the Estes Park Conference in 1934 which founded the Credit Union National Association.

More Than the Sum of Her Accomplishments

Through the force of her personality, she shared her passion for credit unions in all circumstances. The following is a story from the book Sharing the American Dream, published by the Credit Union Executive Society.

It is a small but typical example of how the 19th amendment created possibilities for women’s leadership benefiting all Americans far into the future.

Neither snow nor jail could stop Herring

by Louise McCarren Herring

This excerpt comes from the book “Sharing the American Dream,”  from the Credit Union Executives Society.

I almost always organized credit unions at a change of a shift or before or after working hours. One night, I went to a meeting of teachers in Columbus, Ohio. The meeting ended about 9 p.m., and since I had scheduled a meeting with the Dayton, Ohio, police for early the next morning when the late shift went off and the first shift came on, I decided to drive the 70 miles to Dayton that night. Even though it was snowing and most people would have said in those days that it was foolish to drive at night, I started out.

I got to the outskirts of Columbus and saw a streetcar parked at what I thought was the end of the line. I passed the streetcar and was immediately stopped by the police for passing a streetcar that was loading and unloading.

An officer took me back to headquarters downtown where I was told I either had to pay a fine, post bond or go to jail. Because of the snowy night, many officers were sitting around either coming off duty or waiting to go on. They listened as I explained that I could do none of these things because I had to be in Dayton early the next morning to organize a credit union for the police force there.

As I explained what a credit union was and the good it could do for working people, the officers sitting around started to pitch money up on the table to pay my fine. I made each person who contributed to my fine give me his name and address so I could repay him. Finally enough money came in to pay the fine and I was dismissed, with a date to return to organize a credit union for them.

They thought the idea was so good they were willing to pay to have a credit union organized. It gave me the opportunity to tell them, as I have told so many groups, that no one should pay to get a credit union.

(Roy) Bergengren and (his colleague Edward) Filene had secured the laws and organized the credit unions as a public service. Those who received this service without cost or obligation had a responsibility to see to it that anybody who wanted a credit union should get it just as they did — without cost or obligation.

Bergengren often paid lawyers and other local people to organize credit unions. He never paid me because I felt it was a great privilege to organize credit unions in the hours I was not working on a full-time job.

The first credit union I organized was for the members of the Brotherhood of Railway Clerks. I knew nothing about organizing credit unions so I spent the entire meeting reading aloud the bylaws and explaining the brief but exciting history of the credit union movement. Later on, I was able to cut down the time it took to organize a credit union.

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When Vision is Lost: Difficile Est Bonum Esse

America’s character has been forged by both idealism (doing good) and entrepreneurial capitalism (doing well).

Jim Blaine captures these two aspects in his portrait of the Amana Colonies in central Iowa. This Utopian experiment did not last past the second generation. Today the community’s vision is divided into The Amana Society Corporation which controls and manages the businesses. The Amana Church Society now deals with spiritual matters. His blog posed the question whether today’s credit union generation still believes in the movement’s unique purpose.

Stories of Business Idealism

For 40 years USC Business School Professor James O’Toole has studied the ever present challenge of “doing good while doing well” in a capitalist economy. His latest book, number 19, is The Enlightened Capitalists.

It is a collection of stories of business leaders who built success in the market and also shared their firm’s financial gains with their employees and communities. He leads off with Robert Owen (1771-1850> proceeding to current examples such as Ben Cohen (Ben and Jerry’s) and Patagonia. Each is a story of a leader with a vision broader than financial success. These goals include shared ownership, employee education and well-being, environmental consciousness, and community investments.

I looked to see if cooperatives were part of this historical account. Late in the book he summarizes newer forms of organizations designed for more than financial success: benefit corporations, cooperative businesses, employee shared ownership plans (ESOPs), and mutuals. Credit unions get two short paragraphs. The first begins with this sentence, “Then there are credit unions, the most visible and successful form of cooperatives,” and the second ends with, “Again no organizational form is perfect: some credit union executives have taken advantage of their federal charters, accentuating the practical over the idealistic aspects of their businesses by paying themselves egregiously high salaries and even converting their organizations into regular banks to treat themselves to financial windfalls.” (pg. 419) Even credit unions illustrate his theme of vision overtaken by self-interest.

Difficile Est Bonum Esse

O’Toole’s conclusion after reviewing two centuries of multiple organizational efforts to combine financial success and social benefits is: doing good is very hard.

He concludes: “It would require a prodigious degree of optimism that I am incapable of mustering to conclude that the behavior of corporate leaders will change appreciably in the near future. . . my head will not allow my heart to disregard or discount the historical behavior of investors. . . I also find it ethically unacceptable to discourage corporate executives from attempting to buck the odds by adopting enlightened practices.” (pg. 472) He is especially concerned that the ever expanding patterns of outsourcing jobs and the gig economy model will further erode a fair allocation of financial gains for this growing class of “contingent” employees.

Lessons for Credit Unions

Both authors document the challenge of sustaining a reform effort’s original purpose. Innovative design and dedicated leadership can be a foundation. But vision can also be quickly shrunken by the realities of market competition or leadership failure. The factor that can help keep the vision alive is how the beneficiaries of the vision are incorporated in the oversight (governance) process. Is there a sense of us, not me? A bond of common values? Relationships, not just transactional events? Transparency empowering informed choice about the future?

Vision requires interdependence, not just the pursuit of self-interested independence. Both doing well and doing good entail documented plans. It is this joining together, this unity, that keeps credit unions from being sucked into the vortex of market capitalism, the system for which co-ops are to be the antidote.

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From the Field: Democratic Governance Makes a Difference

Hi Chip. I recently joined a credit union and received something in the mail I thought I’d share with you.

The following was in a welcome letter:

We want you to know that you are much more than a customer – you now belong to a family of 200,000 members who cooperatively own [credit union’s name]. Ownership gives you an equal voice to elect our Board of Directors…

How many other credit unions encourage this participation? 

 

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The Key to Credit Unions’ Future: “Trust Each Other”

Three factors must combine to sustain a unique credit union system:

  1. Belief in the innovative power of cooperative design;
  2. Leaders with vision to sustain cooperative purpose;
  3. Effective governance centered on the roles of member-owners.

This last characteristic often gets short shrift. Governance is usually thought of in terms of board effectiveness. That is one element. But in my view it is not the most important.

Effective governance must put the member-owner at the center of the process if it is to inspire the other two factors of cooperative uniqueness,

In for-profit firms, the primary performance driver maximizing shareholder wealth. While many institutions may profess a wider mission, market realities sooner or later come back to this singular focus.

In credit unions, the vital role of the member-owner is often relegated to that of a “satisfied customer.” CEOs and boards are wary of member involvement beyond token ratification of the board’s election at the required annual meeting.

Without stimulating member awareness and involvement, the unique cooperative model can quickly run off the rails. Boards become closed shops. Directors serve for decades. Infrequent vacancies are filled with familiar colleagues.

This isolation from the members turns the credit union into an institution where financial performance is the primary success factor. “Mission” becomes a special project or a PR effort.

Examiners reinforce this focus. I have yet to see an exam that assesses cooperative contributions. This does not mean purpose is dead; it just suggests it is uniformed by continuous member engagement.

Member-Owner Participation as an Essential Cooperative Process

An immediate way to start engagement is to treat members as interested owners. One way is publishing the quarterly financial outcomes on the web, and distributing them digitally, with a full discussion of what they mean.

After every calendar quarter, there is not a day that goes by without public companies, especially financial firms, announcing quarterly earnings, the reasons therefore, and their outlook . In credit unions, which must file financial call reports quarterly, there is comparatively total silence. Until some reporter seeks out the 5300 report for an article.

I have found one example of this SOP-private-company process in credit unions. When I asked the CEO why he sent a quarterly letter with full financials and commentary he replied:

  • We’ve reported to our member-owners every 90 days for the last 20 years. That is something we believe all coops should do.
  • We describe how we are responding to current events; e.g. the COVID-19 pandemic, both financially and operationally.
  • The report is for personnel and team building, not a compliance requirement designed from a regulator’s point of view.
  • Numbers are the minimum baseline in relating to owners – the culture and heart of who we are is the relationship with our “shareholders.”

He wrote: “Member involvement is a real living tactic for us…..to reach for shared strategic hopes is a win-win model for every stakeholder. We see each other, talk to each other, and trust each other.”

A Basic Step in Real Democratic Governance

This one tactic is an easy first step for every credit union to take. It would begin to broaden the concept of cooperative governance with the constituency that matters the most: the member-owner. Most importantly, it would show “we trust each other.”

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What Do Municipal Credit Union and the U.S Postal Service Have in Common? 

The following is an excerpt from Today’s Edition, a newsletter of current events:

While we should be concerned about the health of the Post Office, I do not believe that widespread alarm or panic is justified. Let me explain…

So, let’s start with a clear-eyed look at the challenges facing the Post Office. The Post Office is in trouble. It has been in trouble continuously since 2006. Why? In 2006, Congressional Republicans imposed a special rule on the Post Office. It requires the Post Office to account for its retirement obligations in a way that no other federal agency is required to do. As explained by the Institute for Policy Studies,

In 2006, Congress passed a law that imposed extraordinary costs on the U.S. Postal Service [that] required the USPS to create a $72 billion fund to pay for the cost of its post-retirement health care costs, 75 years into the future. This burden applies to no other federal agency or private corporation.

Nor does it apply to private corporations.

Since 2006, the Post Office has been on life support, beholden to Congress and the Executive for its continued sustainability because of a made-up accounting rule . . .

Government authority creating numbers to flim-flam decisions is not restricted to Congress and the Post Office. NCUA has made a habit of the same practice for over a decade.

The Situation at Municipal Credit Union, New York City

I have written about NCUA’s May 2019 conservatorship of Municipal Credit Union in three blogs. One described the reported $123 million loss for the June 2019 quarter. Another analyzed the equally unprecedented and outsized net income of $30 million achieved in the final three months of that year.

NCUA has provided no information about the conservatorship affecting almost 600,000 members in this $3.6 billion credit union. The only data comes from the quarterly call reports.

These highly unusual financial  results in conservatorship continue.

Extraordinary Return on Equity a Year Later

The June 30, 2020, call report shows a net income of almost $15 million as compared to the $123 million six-month loss in the prior year. This is certainly positive. More remarkable is the 54% gain in reserves from $104 million to $160 million in the year since June 2019. This is a return on equity of over 50%, an extraordinary outcome, perhaps unprecedented for a coop.

But these unusual financial results are not the results of operations. Rather, like the Post Office, NCUA imposed accounting “adjustments” for liabilities far into the future, in an attempt to justify its conservatorship. And NCUA avoids answering questions after examining the credit union for decades without requiring any such one-time “adjustments.”

Exaggerating problems to justify supervisory edicts does three things. It creates a public case for why regulators are needed, or as one NCUA chair explained: “to get honest numbers.” Secondly, this sudden discovery deflects questions about where the regulators were as the problems developed. Finally, it shifts the spotlight for responsibility by blaming (and sometimes suing) those in place, versus those examining.

Just prior to the conservatorship in March 2019, Municipal reported a well-capitalized net worth of almost 8%. NCUA had to justify taking over a solvent credit union in May and putting in its own management. So far, this action has resulted in 200 job losses, the closure of 7 branches and a reduction of over $150 million in loans outstanding. The allowance account has been funded to 223% of reported delinquencies, 50% higher than the industry average.

When Authority Goes Dark

Taking a credit union away from its members via conservatorship is the most serious action NCUA can take. Any credit union that reported going from a quarterly loss of $139 million to a quarterly net income of $30 million six months later would be highly suspect.

When government imposes pseudo-accounting write downs to seize control of an institution, both the organization and the government lose credibility.

NCUA has a record of dictating reserves which proved to be significantly in error and contrary to the judgment of experienced managers. This occurred in the five 2010 corporate liquidations, which the agency still defends, using exaggerated estimates of loss as recently as the June 2020 board meeting.

These staff statements continue  the practice of unfounded official projections.  For example during the NGN funding, NCUA published estimates of the  of the total estimated costs to credit unions that have proved to be more than $20 billion in error.

Municipal was not without problems. But the key question is, what did the examiners do or not do to assist the board in their oversight of this $3 billion firm? Also,, what is the plan now to restore the credit union to its member owners?  And, why has there been no explanation for the wild swings in financial results?

Lucidity in a Crisis

All crises involve uncertainty. Forecasts are no longer linear extrapolations from a settled environment. Responses must be flexible. Options are vital. Clear thinking is a must.

The issue of subjective estimates of future losses imposed by examiners is especially critical now. In past crises, examiners have dictated individual credit union’s allowance provisions,  reducing the credit union’s net worth and compromising its ability to serve members. And then, post recovery, the decisions have been found to be overly zealous.

Regulators are supposed to be where problems are. The track record in Municipal suggests their role has added to the difficulties of the credit union getting back on track. Unaccountable actions, no transparency and no one taking responsibility, is a debilitating, even dangerous, practice.

NCUA’s silence reinforces the impression that they cannot make a public case for their decisions with Municipal. There is no plan. And they hope no one notices the growing impression of regulators not up to the job.

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The Volunteer Spirit

In July, the Library of Congress finished a crowd sourced project to complete the transcription of over 10,000 documents in its collection of Lincoln papers.

Most are letters with complaints, pleas, job requests and military reports. Some are in French, German or Italian. Many are personal such as the desire of a Navy Officer to marry, to which Lincoln responded to the Secretary of the Navy: “please allow him the requisite leave of absence, if the public service can safely endure it.”

One of the most stunning messages for me was a letter from a 65-year old would-be Army volunteer from western New York. He wrote in March 1864:

Father Abraham

I am 65 years old am able to do a fair days work (not the hardest kind of work) day after day am willing to go to the army, or rather into some fort or Garison, where there will be no long marches, was never a good traveler but worker will help you work out our national salvation will go free of any charge to Government except travel and rations Avery Coon is a stout man of about my age will go too to a Fort or Garison he may need the usual pay will be a good hand

We have Faith in God and dry Powder

Truly Yours Daniel Edwards

The question for credit unions: What is the belief and “dry powder” motivating your volunteers?

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How to Achieve Increased Participation in NCUA’s Annual Voluntary CU Diversity Self-Assessment

Few credit unions have completed this voluntary form. NCUA makes repeated requests for more participation. At the July NCUA board meeting one member suggested that credit unions should have an incentive, such as lowering their operating fee. The August 3 NCUA letter to credit unions (20-CU-23) is the latest reminder.

The form is long with five sections. It combines data, qualitative comments and even asks for stories. Check it out here: https://cudiversity.ncua.gov/

Given the wide range of interpretations possible from the information, one can understand the hesitation to complete it, especially if the forms are public.

How to Increase Participation

With heightened concern on implementing truly equal opportunity, this self-assessment could be a useful tool for any organization trying to identify ways to respond. Two suggestions to gather more credit union data;

  1. Use the filings to give annual awards highlighting credit union leaders in this effort. The subtitle of the form is: “Best Practices for Demonstrating a Commitment to Diversity and Inclusion.” Awards would validate the relevance of the form. They would spotlight best efforts. Most importantly, credit unions would have to participate to win! The awards would showcase leadership and promote winning credit unions’ employer reputation. Much like the many Best Place to Work recognitions given out in localities around the country.

An example of this approach is the Departments of the Army , Navy and Air Force Distinguished Credit Union of the Year Awards. Four credit unions were honored using each military Department’s selective criteria.

  1. NCUA should complete and publish its own copy of the voluntary diversity report as an example for credit unions.