The country is going through the political throes and formal processes of a complete changeover of executive and political leadership in DC. This includes NCUA.
In late 1981 Ed Callahan had been confirmed as the next NCUA Chair. Before he had been formally sworn into the job, I asked what he thought his toughest challenge would be.
Ed had been leading the Illinois Department of Financial Institutions for almost six years. In the Department, the credit union division oversaw 1,200 state charters. During this time the Illinois system had navigated multiple market and legislative changes implementing deregulation.
I assumed the response to his new job would be about the scale of responsibility, from one to 50 states and from 1,200 credit unions to 16,000; or the increased size of the agency budget and staff; or the more complex institutional and political environment in DC including Senate and House hearings and NCUA membership of interagency committees such as the FFIEC or DIDC.
Ed’s Number OneChallenge
His answer covered none of the above areas. His biggest challenge he said would be communication. That is to explain the direction he believed the NCUA and credit unions should undertake and why.
Callahan’s track record and leadership of Illinois cooperatives was described as deregulation. At a dinner celebrating his appointment before leaving the state, the Illinois Credit Union League presented him with a framed sign he then hung in the Chairman’s NCUA offfice. It read simply: “ We don’t run credit unions.”
Leadership of a Transition
What would deregulation look like on a national scale and all at once?
The first effort communicating this approach was a videotaped panel discussion arranged by the Illinois Credit Union League on January 8th, 1982. The title: Deregulation, What Does it Mean?
(https://www.youtube.com/watch?v=S09QkeNYgBU&t=4s)
The video is 24 minutes. This conversation was the beginning of a dialogue to change the entire direction of the prior 50 years of federal credit union regulatory practice.
Several factors in this video are noteworthy. It was a joint movement project. The Illinois League sponsored and produced the video. The panel included Jim Barr, the head of CUNA’s Washington office as moderator, three credit union CEO’s, and Chairman Callahan and NCUA Executive Director Bucky Sebastian.
The format is Q&A. Hard questions are asked. The dialogue is authentic because of the openness of the conversion.
The most important moment may be at minute 16. A CEO responds to Callahan’s deregulation approach by asking how much influence will credit unions really have in deciding this policy? The answer by Callahan shows his respect for the industry and for the values the cooperative system.
In brief Callahan responds: If credit unions say they don’t want it, I will not implement it.
A second question by Jim Barr at minute 18 is simply. Why now?
This video was the first of 20 NCUA developed during Callahan’s three and one half year tenure. It was one of many efforts to inform credit unions and the public about the actions of NCUA leadership. Communication’s success required a regulator who was accessible, informed and willing to listen to the industry.
The result of this leadership approach was a tenure characterized by joint NCUA-industry efforts that repositioned the system for the completely new era of market competition.
This video is one brief example of how the regulator and the industry collaborated to implement change that positioned credit unions to thrive into the 21st century.
Communication meant all the constituencies- the members, their credit unions, the federal government and the public-were part of and informed about the most successful cooperative sytem innovation since the first credit union charter in 1909.
Leadership is never easy, especially in public positions. Developing and seeing through a successful tenure begins with the very first communication. In this transition. that began with a video that still has meaningful lessons decades later.