Following is an introduction to a video lecture by historian Timothy Snyder titled “What is history?” (link)
We speak often about history, but we are careless with the past. When we choose not to know what has happened before, we are also choosing not to influence what will happen after.
If we don’t care about history, we find ourselves in an eternal present, denied any sort of imagination about the future, and nurtured on lies about a past in which we were innocent.
History does not mean these misleading tales; it means a search for knowledge, using a certain set of tools; it means a process that enriches and humanizes, one that allows us to name things by their proper names.
Implications for Credit Unions
Whether you are a student at Western CUNA Management School or elsewhere, one purpose of education is to understand the road to the present.
These stories are vital for both individual credit union success and for creating system-wide priorities.
For example, beyond the founding stories of committed credit union organizers keeping records in a drawer at the work site, how were future decisions on FOM expansion and leadership changes made in different eras? What part of the legacy did the credit union preserve and what no longer applied?
Understanding an organization’s past events, both successes and disappointments, provides a perspective for future options. For most najor decisions involve assumptions about options-those considered and others overlooked.
How Are National System Priorities Set?
The same benefits are available at the national level for system issues such as regulatory oversight, legislative changes in statutory authority or enhancing the cooperative purpose in American society.
Rarely do we look back to learn from the past. Regulators do not conduct mortems of failures preferring to move on versus evaluate where change might be needed. For example think of instances NCUA has described credit union failure as due to “fraud” or “lack of board oversight” instead of asking why weren’t these multi-year deficiencies discovered in exams. Using fraud or other credit union failure cliches avoids regulatory accountability.
How are national legislative priorities determined? For example the recently branded Credit Union Board Modernization Act included in tthe 21st Century Road to Housing bill?
The legislation transitioned federal credit unions to a risk-based board meeting schedule, giving well-managed institutions the flexibility to meet just six times a year (with at least one meeting per fiscal quarter) instead of the previous blanket monthly requirement.
The legislation also Targeted Requirements for Newer/Lower-Rated Credit Unions: New (“de novo”) credit unions and those with lower supervisory soundness ratings (composite or capability of management ratings of 3, 4, or 5) must continue to meet at least monthly to ensure proper risk oversight, (AI)
This is modernization? Allowing boards to meet just six times per year is based on an NCUA process that reduces examination frequency for higher rated credit unions? How do either regulators or boards understand the state of risk by less frequent contacts? And when something untoward happens, the solution is to meet more often?
Do either the volunteers or the regulators believe less frequent contacts are a “modernization” step? Looking at the recent and past failures (Jefferson Financial, Creighton, Unilever etc) or the two year plus NCUA exam cycle heading into the 1980 financial crisis suggests the real problems are not too many meetings.
This “modernization feels like a PR effort to convey legislative activity rather than addressing substantives issues of volunteer and regulatory effectiveness. Regulatory and board oversight are management and leadership issues, not a regulatory burden to be remediated.
History suggests the potential for real congressional legislative change happens about once a decade. The three person board (70’s), deregulation (80:s), Member Access Act (90;s), financial crisis (00’s).
There are fundamental issues about the future of cooperatives including the role of the NCUA board (or even a separate coop federal regulatory system), the rights of members, the purchase of banks, the dearth of new charters etc.
With a knowledge of the past we know there will be an opportunity for major legislative change to further coop purpose and effectiveness. But is anyone even thinking about that plan?
Could that effort be a topic for students in the final year of their credit union educational experience? After all, it’s their professional future they would be shaping.