I just received this video of six credit union state league Presidents recording a song in a studio.
The six state CEOs will be familiar to many CU veterans. From left to right they are: Tony Schumacher , Gene Farley. Carroll Beach, Brad Murphy, David Dinning and Bob Biancini.
Note: Skip ahead to 17 seconds to begin the video.
The Video’s Story (from a participant)
I thought you might get a kick out of this . The video was shot in 1982 I was at a meeting in New Orleans with a number of Credit Union League CEO’s . I do remember our gang walking from our hotel to a restaurant, “The Court of 2 Sisters” (still in business!) On our way we passed this recording facility where you could watch people making mostly silly videos. The general consensus was, why would anyone embarrass themselves like that ?
On the way back from the restaurant after consuming about a bottle of wine each, this was the result.
The Significance of 1982 and State League Directors
The song’s lyrics might not pass muster today, but you have to admit they put on an excellent show. But I think it tells a lot more about credit union leadership than the changing culture attitudes on relationships.
In this year of credit union history, the state league system was at its peak strength. In some states credit unions were so numerous that there were even competing state level organizations.
Leagues were vital pillars of the movement in this formative decade as credit union entered deregulation. State charters were the only option until 1934. Leagues were the driving force in the federal law pasage providing proof that credit union could be run by ordinary people. State leagues were the vital organizers of both federal and state charters.
At this moment there were 16 state insurance options along with the NCUSIF. States were the incubators for change, innovation and creativity. These included activities off limits to FCU’s such as field of membership flexibility, share drafts, home mortgage loans, ATMS and regulatory oversight and access. NCUA had become a three-person independent agency only in 1977. The Agency was on its second chair, whereas some of these local leaders had served decades.
The state leaders founded CUNA at Estes Park. CUNA was headquartered in Madison with a regulatory office in Washington DC. Through ACULE these leaders coordinated legislative priorities and national leadership. The corporate network was supported by the leagues initially with cross board membership which NCUA ultimately banned.
The system also spawned other organizational support groups with credit unions of similar fields of membership. For example the League of IBM credit unions, Educational. Credit Union Council, the Airline Credit Union Association, and many more with like sponsors.
The results were a strong, grass roots state level system rapidly expanding their growing role in communities in every state. The movement’s success and the system’s support structure were closely linked and interdependent.
The Illinois Example
Leagues provided support services, education and chapters to promote local social and political interactions. As a state supervisor from 1977 to 1981, I spoke at chapter meetings, annual meetings and worked with the league when examiners found problems. We would ask if someone from their two dozen or more field representatives might help out as we pursuded the shared the goal of a sound system. For in 1977 there was no mandatory share insurance requirement for state charters.
Illinois had the largest number of credit unions of any state with over 1,100 active charters. We wanted the Illinois system to be a national leader in serving Illinois residents. When the Suburban Bank Group sought a charter for its employees, we granted the new charter. Then we hired the energetic person who organized the effort, Wanda Mallow, to promote new charters across the state.
Through NASCUS, we learned how other state supervisors in Texas, Michigan and California operated. NCUA was rarely present on the ground,
Together the League led by Dick Ensweiller and the Department recodified the Illinois Credit Union Act in 1979 introducing deregulation and flexibility for a changing financial marketplace.
The Cooperative System Today
The shape and character of the movement’s system is very different today. Leagues have merged, The number of credit unions has fallen from over 16,00 in 1977 to 4,300 today. Large credit unions operate on their own, some with national ambitions in multiple states.
CUNA moved its operational leadership to DC and focused on national advocacy withdrawing from many support services often offered through the leagues.
Large credit unions dominate the industry. National issues of technology adoption, CUSO business partnerships and regulatory responsiveness leave many smaller organizatons feeling left out or irrelevant. There is no system support for new charters, In fact the opposite is happening with mergers of long serving, sound credit unions a seeming priority for leaders.
The strong capital ratios averaging over 11% and with long serving safe franchises have caused many credit unions to rely less and less on system support, except as an independent business decision. CEO turnover at both credit unions and support organizations has caused the shared efforts from the past to be just memories. NCUA has been leaderless for over a year. Since the 2008 financial crisis, it has strived to be “independent” of credit unions or as one board member more bluntly stated, don’t look to Washington for advice.
The critical question facing the movement is whether a support system is even necessary and if so, for what purpose. The shadows of many of these groups still exist, but there is little to no shared sense of priority or direction. Advocacy means protecting the status quo.
The sense of purpose and serving the common good are sometimes referenced in local planning, but rarely are part of national conversations. At a time of increasing shortcomings in many ways and at many levels of political and business activity, credit union identity is becoming more and more market-like. Coop leaders are playing the merger and growth games they find, rather than defining the game they want to play.
So maybe the nostalgic message of prior relationships recorded by these State League Directors is more prescient than they could have realized. Is the system that spawned today’s credit union industry just is a nostalgic moment of an era now gone forever?
To all the girls I once caressed
And may I say I’ve held the best
For helping me to grow
I owe a lot I know
To all the girls I’ve loved before
The winds of change are always blowing
And every time I try to stay
The winds of change continue blowing
And they just carry me away