In America the press is often called the “Fourth Estate.” The term places the press’s role as critical as the three branches of government: legislative, executive and judicial. It signals the watchdog role of the press, so vital to a functioning democracy.
What is the state of press coverage of credit unions? Especially now that coops are the second largest depository system in the economy, serving over 100 million members and managing $2.2 trillion assets.
A Brief Credit Union Press History
Today’s independent coverage of the credit union system evolved from newsletters that emerged in the 1970’s and 1980’s as the credit union system become more coherent with national ambitions and organizations.
These startups included CUIS, Report on Credit Unions, NCUA Watch. These newsletters relied on subscriptions versus the free in-house updates from league and trade associations.
In 1986 ASI established the first printed newspaper format called Credit Union Week. Shortly thereafter Mike Welsh, former CUES President, launched Credit Union Times offering original reporting and commentary. In following years Credit Union News and Credit Union Journal were launched as competitors. All used a combination of advertising and subscriptions to support their free-spirited reporting.
Today the independent credit union news media is largely virtual, publishing daily online summaries relying extensively on press releases from the industry.
More than Aggregators
With small staffs, limited budgets and daily posts, opportunities for original reporting or even investigative efforts are limited.
But there are periodic examples of the traditional press role of speaking “truth to power.” Power refers both to the actions of NCUA and other government agencies, as well as events within credit unions and trade organizations.
Peter Strozniak of the Credit Union Times has a talent for tracking legal proceedings involving credit unions. His articles have provided valuable insight into NCUA’s regulatory shortcomings, as revealed in court records. A recent example is his story of a credit union’s suing NCUA for failure to prudently manage its interest in taxi loan participations. The opening paragraph:
The $390 million Nassau Financial Federal Credit Union is suing the NCUA for nearly $1 million for allegedly breaching an agreement to settle defaulted taxi medallion loans for a mere fraction of what they were worth.
Many observers questioned NCUA’s disposition of the taxi medallion loans sold to a hedge fund in February 2020. The agency refused multiple FOIA requests for details. This example further adds to the impression of an NCUA coverup in its actions in the $750 million sale of loan participations to a Wall Street hedge fund.
The Members’ Interests: Sunlight as a Disinfectant
CU Today has published a series of original articles about member’s efforts to participate more openly in their credit union’s governance.
One series discussed the efforts of four members of Virginia State Employees Credit Union to seek nomination for open board seats. Their efforts were totally ignored. The credit union elected the board’s self-selected candidates including the current chair with no outside nominees permitted.
More recently CU Today has followed the efforts of former directors and CEO to challenge the announcement of Vermont State Employees to merge their very successful credit union into the larger New England FCU.
CU today publisher Frank Diekmann editorialized about his goal of “pulling back the curtains.” He explained why reporting the merger information provided members when charters are ended and the payouts to management that sometimes accompany such efforts matters. It read in part:
We also got to see how many CUs opted to return net worth to the people who own it (in some cases, obviously, there was little to reserve from the reserves). We further got a peek into which were not offering any payout, with a few citing odd reasons such as the acquiring CU has more branches or, bafflingly, offers Apple Pay and Google Pay. Eh?
One CU did announce it would be paying out some of the excess capital, but in this case only to savers, with more than $2 million being distributed in all. I’m not suggesting the members of the board all had savings/CDs at the credit union and that few if any were borrowers. I’m just saying.
Sunlight may indeed be the best disinfectant, but not if no one never opens the curtains. CUToday.info has made a commitment to reporting on all the merger disclosure forms sent to NCUA, meaning we will continue to give the curtains a pull.
Needed: A Pulitzer for Credit Union Reporting
At last week the White House Correspondent’s dinner the comedian Trevor Noah’s public roast of many public figures ended with this close about the never-ending importance of a free press.
While the international press coverage of the war in Ukraine was top of mind that night, a domestic event happened the following day proving Noah’s thesis.
The national press released a draft of a Supreme Court decision that would reverse the Roe vs Wade fifty-year precedent giving women the right to an abortion. The coverage took the debate from behind the hermetically sealed Supreme Court process, to the public sphere.
If credit unions are to fulfill their purpose of bringing more economic democracy to their members and greater choice for all consumers, one of the most important ways to monitor this role is an independent press. One that reports its successes and exposes its failures.
In addition to Herb Wegner awards honoring credit unions leaders who exemplify the best in cooperative commitment, I believe an equally important moment would be to award “Coop Pulitzers” to press coverage of credit unions.
These would recognize the writers and stories from within and without the industry who take the risks and invest the time to hold those in positions of leadership to public scrutiny. Especially for those with public authority. For unlike the White House Press, in credit union land there is only one estate, the NCUA.