Disrupting Credit Unions to Again Become a Movement

(Following are excerpts from exchanges between several CEO’s and a person, quoted below, interested in NCUA board openings)

Yesterday I was reminded about the fever of the small business entrepreneur to state their case in the wrong way that is,  the market capitalization (valuation)  of their firm.  

Their need is to be seen as an initiative or startup with the vision of selling the firm.  The goal of inflating the value not for the motivation of living the journey forward, but for being accepted by an audience handicapping their firm’s success and relevance to attract outside observers.

This is not a good look for cooperatives. Their “worth” was never meant as one ready to be traded, abandoned, or evaluated for observers who have no role building the firm.

The Market’s View

Once our industry started to be valued through the eyes of outsiders as a financial marketplace commodity, we were on the path to attracting all the trappings (inside and out) of those who think like commodity brokers.  These market driven criteria have a hard time with the ideals of community ownership (virtual) where acting and living the purpose is far different from cashing in.  

We sold out the magic of financial cooperatives not for the sake of being understood for our contribution and confidence in people acting together.  Rather the goal became putting a number on who we are.  Cash in, pay me, liquidation values, what was the other guy worth?  We strived to be evaluated and on par with ideals that are not the drivers of our member-owners’ success.

This transformation in outcomes is overseen by an out of touch NCUA and professional agents using criteria and motivation that will distort cooperative advantage for decades to come.

We need to hone the collective lens through which we set our vision for a new generation of leaders and oversight which will inspire cooperative entrepreneurs and the vesting and enthusiasm of American citizen owners.  

The Next Steps

1. Call for the end of the NCUA – start a movement to highlight the fact that CU’s are not a government burden but an independent system wishing for autonomy.

1.a Separate the deposit insurance fund from government regulation and supervisory oversight.

2. Take the newly separated cooperative insurance fund administration and refocus it on credit union success and nurturing innovation and leadership.

2 a.  Support a public initiative to prioritize league/trade organizational formats to return to advocacy and away from prostituting for commissions!

3. Start a movement for cooperative entrepreneurial skills and measures that support CU differentials – in accounting, human resource., asset management, and network infrastructure and execution.  Surge collaborative business design initiatives.

Start something worth calling a MOVEMENT again.

On Mergers

1. Reclassify merger into two transparent market types.

– rescues (with specific criteria)

– mergers for operational gain

2. Announce a moratorium on mergers coming in 6 months.
3. Publish an immediate effort for new rules in merger processes and due diligence by members and boards.  Announce new guidelines for explicit tactics around cooperative entrepreneurial ship, consumer-owner engagement goals, and programs for professional compensation over asset enrichment and gains.
4. Moratorium in place for 12 months.  
5. After 12 months – implement the new processes.

Your thoughts?  Ideas that certainly fit the times, not the status quo.