Author: Chip Filson

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Can Credit Unions Buy Their Way to Success?.

For the first 75 years of credit union history, member, share and asset growth was from internal, “organic “ business efforts versus external acquisitions.

Some of the factors requiring this approach were regulation, field of membership limits, the absence of external capital or liquidity, and the cooperative design’s  “local” advantage.

After deregulation of financial services became government policy in the 1980’s, many of these constraints were modified.  Growth options expanded. FOM regulations were broadened.  New membership strategies such as indirect lending were introduced.  Credit union leaders expanded their market ambitions.

Purchasing New Accounts

Today many credit union strategies involve both organic and external acquisition growth tactics.

This market bidding for new members is illustrated by financial institutions’ multiple offers for new checking accounts. Here are some recent cash bounties sent to me:

From an airline credit card issuer:

 As a valued  Chase customer we’re thanking you with an up to $900 offer.  Open a new Chase total Checking account and the new Chase Savings account with qualifying business activities. 

One of my credit unions emailed this offer:

Dear Charles,  

You can still earn up to $100 when you open a new Patelco Checking and Money Market account.  Here’s how.

USAA’s post card appeal had this headline; $400 Cash Bonus.  The offer:  When you apply for and open your first USAA Classic Checking account and receive a qualifying direct deposit.  Offer is nontransferable.

A new local bank, Atlantic Union, promised  a $400 welcome bonus in three easy steps.

  1. Open a checking account.
  2. Set up direct deposit.
  3. Collect you $400 bonus.

Not to be outdone, PenFed offers up to $300 for opening a new checking account with  a qualified deposit.  To receive the full $300  requires an initial $20,000  deposit.  The average daily balance must remain above this amount for five months to receive the $300.

Can Credit Unions Win These Bidding Battles?

Indirect auto loans illustrate the ultimate challenge of external asset purchases. Can these new customers  be converted to loyal members.  Or is the transacton a one and done event?

Before deregulation the credit union option was itself compelling.  Word of mouth was the most common marketing effort.  Credit union membership was thought to be a valuable benefit.

One proof of this belief is the many times members moved away from a job or their community, but chose to retain their credit union affiliation-just in case I need it.

In what some CEO’s  view as a commoditized financial services arena, the quickest way to grow is to go buy it.  These efforts include third party loan originations, purchasing individual participations, acquiring whole banks and the ever present offers to merge facilitated by golden parachutes for the selling CEO.

Is offering a better price sustainable?

Will these “bonus” pricing strategies result in long term  loyalty?

What is the Coop Competitive Advantage?

Buying growth seems easy at first.  The costs and immediate increases in size are seen.  The longer term question of whether these relationships last, is down the road.

The tactics of purchasing initial market success raises important  questions:

  • Does cooperative design, other than the federal tax exemption, give the credit unions a competitive advantage in these price/bonus competitions?
  • Does acquisition of new accounts via third parties result in new member relationships, or a temporary lift?
  • If growth via acquisition becomes an important strategic effort, does a cooperative’s internal capability for organic market efforts atrophy?

Buying growth is not a unique market capability.   It is very visible and easy.  Just call up a broker or other third party originator. The real work of relationship building just begins with the booking.

Purchasing growth is constrained by internal resources and market competition. Is attracting new members with a better price the best way to present the cooperative value advantage?

Learning from the Past

The capabilities and reputation that created a $2.3 trillion ciiperative financial system today were built on a foundation of multiple factors.  These included convenience, personal service, local familiarity and a fair price. All wrapped in values centered on collective community care.

The challenge of creating real organizational value is ever present.  The answers are not simple and often unique to a credit union’s situation and leadership skills.

The response is not to go back to a prior era or model. Rather it is a simple lesson from generations of coop success.  If an organization wants to be a credit union, then it must decide to be one.  Not perfect, but at least good.  America has plenty of banks.

P.S.  Here is a case study published by CUDaily of a credit union expansion effort based on credit union advanages:  (https://thecudaily.com/why-a-california-cu-introd-a-new-digital-brand-in-georgia-the-advice-it-has-to-share/)

 

 

 

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What Are Credit Union Schools Teaching?

One of the important collaborative efforts is the system of credit union professional courses.  These multi-year commitments are preparing junior staff members for leadership roles in their careers.

I received the following note from a person attending one of the oldest and largest of these programs:

I am in my third and final year at Western Credit Union Management school.  In working on my final project, I came across a past high honors project that I wanted to share with you. 
It details one larger credit union’s growth strategy through mergers and acquisitions. What is particularly interesting is how they view the Small Credit Union category, which they define as $500 million and less.
“A very desirable new market or a significant new strategic capability would need to be evident for our cedit union to consider a merger with a small credit union. Otherwise, the operational disruption would not be worth it.”
 
She attached the full project of almost 200 pages.  It is very professionally done.  Well organized, lots of data, tables and clear presentation strucure. The student’s own credit union is analyzed with a SWOT framework.  Various consultant views are offered and footnoted. 
Mergers and acquisitions are just one of five goals to try to restart the credit union’s slowing member growth.
I did not thoroughly read the entire thesis.  My question would be who is providing feedback on these major academic efforts?
For the work is filled with data and other documentation,  current in its references, and  logical in the recommendations.
I did not study all the points. It is written from an institutional perspective.  I did not see any reference to two areas: credit union system’s future as a unique alternative for members, and what parts of the consumer market are in most in need of cooperative solutions.  Growth was the goal.
The thesis is a well written document that should be used as a starting point, not a final plan of what this credit union aspires to be.  Who are the readers and evaluators for these academic exercises?
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When Music Transforms Words

The folk singer Jesse Welles and retired credit union CEO Jim Blaine are separated by two generations of lived experience.  Yet they share a vision and common mission for the country.

Each person has their own professional “lane” for implementing their commitment.  Side by side they illuminate each other’s core values.

Most credit union people of a certain era know about Jim Blaine’s career at SECU (NC).  Over five decades he built the country’s second largest credit union by not following conventional industry practice.

His two guiding principles to staff were simple:  Do the right thing and Bring us your Momma.  Folksy, yet profound.

No risk-based pricing–a member either qualified or not for the loan. No indirect lending allowing a third party to set the rate.  No frills credit cards.  Focus on real estate as the surest means to enhance member long term well-being.

He created a Warren Buffet like organization with centralized funding but local decision making and implementation,  SECU built a statewide network of ATM’s  and over 200 branches. He chartered a unique member-funded foundation supporting education, health and other community needs throughout his home market, the Tar Heel state.

He was outspoken about his approach to cooperative purpose, often challenging peers’ priorities.

“A prophet is not without honor, except in his hometown” is a biblical phrase that summarizes Jim Blaine’s most recent efforts.

For the past four years he has spoken his mind about the direction SECU’s board and senior management have taken.  His blog, SECU just Asking is plain spoken, factual, and sometimes personal when publicly challenging the credit union’s change of philosophy.

Over five decades Jim built one of the most successful cooperative financial charters in America by following one simple rule: “What’s good for the least of us, is good for all of us.”   A phrase with multiple meanings. 

The purpose of the tax exempt cooperative system is to serve a vital  segment of America’s consumers.  He described that group as: Those who have the least or know he least pay the most for financial services in America today.”  

Many peers misunderstood this approach, believing his business model was archaic, lacking innovation and missing the most important market, the A credits and well-to-do.

Enter Jesse Welles

I was listening to recent protest songs from community sings in Minneapolis, now under federal armed siege. My algorithm offered a  Woody Guthrie, Pete Seeger-style activist folk singer.

Born in 1992 in Arkansas, Jesse Welles has, over the last ten years, written hundreds of single ballads about life, politics and those left out of America’s promise.

One commentator describes his voice as sounding like burnt toast.  To which he replied, but you can still eat it.

One ballad that caught my ear was called The Poor.  The chorus has these ironical lines to support the common view that the poor just need to work a little harder: “It ain’t the banks / And it ain’t the taxes / It ain’t the payday loans and high-rent homes / And predatory fees and practices”. 

(https://www.youtube.com/watch?v=I6vjaimSK4E)

Jim Blaine is the counter example to Jesse’s satirical critique of those who blame the poor for being poor.

A Common Mission

Both men are outspoken, but grounded in the belief that change can happen. They are unconventional in their approach to their professions so are unlikely to be honored by the establishment.

Both believe in protecting the vulnerable, standing up for justice and caring for “the least of these” in our communities.   For them economic justice is moral justice.  We cannot remain silent when individuals and families are preyed upon by a system that celebrates profit as its highest priority.

These two voices illuminate a shared vision. Together they  challenge us to live into our better selves.

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A Post Every Credit Union Employee Should Read

This is a CEO’s statement  from the monthly staff update:

Our credit union is in a very commoditized business of financial services, most of our products and services can be purchased elsewhere. So our difference is you, how we treat each other and our members to truly change lives one person at a time in our community.

And then a reminder of two guiding principles:  Every person has a story-do the right thing.

Recently consultant Ancin Cooley in a LinkedIn post described why doing the right thing happens rarely to employees in a merged credit union.

His  recent blog should be posted in the employee lounge of every credit union office.  Mergers of well- run credit unions not only eliminate a local grounded financial institution.  They also end employees’ investment in their professional future.   Following is his analysis of the impact of mergers on the most important “difference makers” in every credit union.

How Credit Union Mergers Rob the Next Generation  of What Was Freely Given to the Last (Attention!!! Millennials and GenZ)

The consolidation cheerleaders talk about member impact, technology investments, and competitive positioning.

The executives advocating loudest for mergers  built careers in an industry that had room for them. They were given opportunities for CEO, CFO, and CLO roles at shops, and VP positions at institutions that no longer exist because they’ve since been absorbed. Those jobs paid mortgages, put kids through college, and built retirements.

The Ladder They Climbed Is Being Pulled Up Behind Them

Every merger eliminates leadership positions—CEO, CFO, CLO, and VPs. Two credit unions become one, and half the top roles vanish.For early-career workers, this means fewer rungs up the corporate ladder to reach for. The CEO role at that $350 million credit union that could have been theirs in fifteen years? Absorbed into a $1 billion merger. Gone. “Good luck bud…”

For mid-career professionals who’ve spent a decade building expertise, the chair they were positioning for no longer exists. They did everything right.

The “Efficiencies” Folks Celebrate Are Your Career and Your Money.

When merger advocates toast economies of scale and eliminated redundancies, translate that: they’re toasting eliminated people.
Early-career workers lose the broad exposure that builds future executives. The young professional at a $200 million credit union who might touch lending, compliance, member service, and strategy? At the merged $3 billion institution, they’re a specialist in a silo, building narrow skills with no line of sight to leadership.

Mid-career professionals find their expertise deemed “redundant” when two departments become one. One compliance officer survives. One lending director. One marketing lead. Senior professionals get offered early retirement packages or the dignity of reporting to someone who was their peer last quarter.

The Mission Is Being Sold Off by People It Already Paid

Many younger workers chose credit unions over banks because they wanted work that meant something. The idea that finance could serve people rather than extract from them. Now they watch executives who built wealth and reputation on cooperative principles abandon those principles for scale and extraction. The same leaders who gave conference speeches about “people helping people” or “Main Street Values” now give conference speeches about “competitive positioning” and “Market Forces.”

To the Millennials, Gen Z, and future Gen Alpha workers in this movement: the path is narrower than it should be. And they owe you more than a picture with a politician and the ability to “crash” an event. But the mission that drew you here is still worth fighting for, and you might be the generation that reclaims and rebuilds it.

Every Person’s Chance to Act

Every proposed merger of a sound credit union depends on the overt support or quiet acceptance of staff.  In these situations, they are the first line of defense for “doing the right thing” for members and their communities.

Remaining  obedient or quiescent as leaders plan the demise of their institutions’ integrity and future will compromise the values underpinning both personal and corporate purpose.

Speaking up is never easy.  But that is what makes a democracy work in a credit union or a country.

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Today The People are the Press

Yesterday’s scripture reading was from the Sermon on the Mount. The lesson includes Jesus’s multiple teachings (Beatitudes) beginning with Blessed are the meek. . . Blessed  are the poor in spirit….

On the sign in front of the church, the  sermon title was Blessed are Those Blowing Whistles.

Individuals are doing more than making noise. People are recording and publishing videos, interviews and pictures of federal troop immigration occupations-and the resulting abuses and cruelties -in towns and cities across the country.

Citizen Journalists

The people have become the press, taking their first amendment rights of freedom of speech seriously.  They have used virtual channels and networks to post their stories and pictures.   It reminds one of the pamphleteers during the Revolutionary War.

But citizen journalism is not limited to tracking immigration abuses. Individuals are finding ways to raise concerns about their credit unions.

I am a three decade member of XYZ Credit Union. I was shocked by the proposed merger with YYY which was sprung on our community and membership without warning or advance notice.

I attended the annual membership meeting and there was zero mention of this. The Board of Directors has acted in secrecy and this sellout is now presented as a done deal.

 These kinds of deep worry are sent to my blog address two or three times per month.   Sometimes the opening will begin: As a former employee and long-time member of XXX I am deeply concerned about . . .

These members want to know how to amplify their voice.  And that is the first goal of the member-journalist, to make their concerns public and bring transparency to situations.

Several CEO’s even embrace these individual voices.  One publishes Net Promoter Score comments in the monthly staff update, but not just the 9 and 10 ratings, also the 4s and 5s which are often complaints about a service, policy or  member disappointment.

The credit union press primarily relies on the publicity releases of the industry.  Rare are the occasions for member comment except when picked up from a news story.  Or very occasionally from member comments opposing mergers.

Both credit union media as well as the public press rarely have the resources to pursue individual cases of self-dealing orworse.

Democracy Requires Speaking Out

In a democracy, and especially in organizations claiming to be governed by their members, they will find ways to speak out.  It is the American way.  And ultimately it will lead to organized opposition should their concerns be ignored.

With the emergence of local digital media, these stories are now receiving greater coverage. Here is an example from the Baltimore Banner, an online non-profit news source for the greater Baltimore community.

Project Salt Box: How citizen sleuths are monitoring ICE in Maryland

First they unearthed U.S. Immigration and Customs Enforcement contracts for 42,000 ready-to-eat meals coming to Maryland. 

Then they built a data map of how the federal Department of Homeland Security was distributing its funding.

Last week, two-month-old Project Salt Box and its seven-person team revealed what some say is a sign that an ICE surge could be coming to the state.

The group, which works to unearth and explain the public documents behind federal immigration enforcement, was the first to report on Tuesday that DHS had purchased a warehouse near Hagerstown. In correspondence with Washington County officials, federal officials described how they could retrofit the space to become an immigration detention facility. . . .

The American citizenry is finding its voice.   It will not wait for elections.  Rather it will seek to change leaders’ behaviors now.

Credit unions were nurtured in the grassroots of local activism.  They found sponsor support to create new collaborative options for their community.

This latent activism is just below the surface.  In the transfer of hundreds of millions of member equity and billions of assets to third party control, their voices will rise.  And they should.

Blessed are those cooperators who use whistles of words to rouse their fellow members to stand for economic justice for all. Future generations will honor them.

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Icy Snow Days

Last three nights the low temperature was in single digits: 6 degrees.  High during daytime is in mid 20’s.  No melt at all.

Schools still closed.  Roads open but too cold for kids to walk to school.

Potomac started to freeze.  So you want to be careful about using the phrase, “Until hell freezes over”-it could happen.

Ice on snow, hard as iron.  Only way in or out.  Even mailman missed two days.

A Japaese snow lantern in its true setting.

Roads open, but snow on sides will be there for weeks.  Solid ice.

A local ice fort.  Note how walls have been made like  stone slabs.

Cleaning walks and porches is a three person effort.  Snow blowers no good on ice packed snow.  Use dirt shovels. spades and even pick axes.  Normal snow shovels not strong enough, laying on ground.

Essential work.

No tennis today.  Have to go to Florida.

Plant covers could save some bushes and flowers.

But power is still on in area.  Just need more hot air.

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For This Weekend’s Snowmaggedon

  1. The Harvard Kennedy School just put out an online course, completely free, to help you understand the science and implications of AI, including video lectures, slides and case studies.

Here’s the link.

2. Explosion of new banking applications at OCC.

This BankingDive article says the eighteen new charter applications in 2025 exceeds the total of the prior four years.

Applicants include Nissan and PayPal for industrial bank charters, the license that Thrivent FCU converted to in 2025. (link)

Other applicants include fintechs such as checkout.com.  Six applicants have received conditional approval.

The article includes this quote from the OCC head:

Gould has said the influx is “a return to the norm” for the agency, and that it “signals healthy competition, a commitment to innovation, and should be encouraging to all of us.”

3. Tired of News about Greenland’s Future?

Here is an AI generated video about the Greenland’s territorial defense force that should put to rest  all US concerns.  Composed by some cheeky Irish balladeers.

(https://www.youtube.com/watch?v=KOpymCZ0PAU)

Have a productive weekend watching or shoveling the fluffy white stuff.

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Living in an Era of Golden Calves

The golden calf in biblical stories is a symbol of idolatry. In these tellings, the statue is worshipped by a people or nation that has forgotten the values they held together.  These idols include the temptations of earthly riches, political domination and worship of false gods.

Currently, Trump literally holds court with the public and press in a gilded Presidential office.

The credit union system also displays the appeal of glitter.  Every week there is a new PR release of a credit union climbing the never ending ladder of state or national asset rankings.  These steps upward are not from internal growth, but from a just  completed external acquisition.

Concerns Being Raised

Credit unions’ exemption from state and federal income tax implies an obligation of public duty.  The cooperative option was not intended as just another financial choice. But instead, an alternative to the for-profit system driven by ever greater market share and superior financial returns.

Here is an AI generated Edward Filene critique of credit unions’ tendency to adopt  banking practices.  Created by a concerned coop CEO.  (link)

(https://www.youtube.com/watch?v=3lBPV3tx_WM&t=21s)

In this time of misplaced or lost public purpose, some feel called to be truth tellers.  They  seek to transform the priorities of wayward coop activities.  Some of these credit union believers are member-owners. They call out the abandonment of member value  being replaced by  institutional glory. And the frenzied search for  more golden calf acquisitions.

They speak the truth that credit unions were formed to provide consumers a financial home that would avoid the excesses  of the for-profit sector. Today,  some coop leaders believe that to beat the competition, a credit union must become the competition.

With coops, the owner-customer design can be an unmatchable competitive advantage.  That is, until members are treated like customers  whose  relationships are routinely bought from or sold to third parties.

Truth Renews  Hope

The American cultural anthropologist Margaret Mead said: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”

She emphasized that significant cultural and institutional shifts always begin with a few individuals who act as catalysts, demonstrating new behaviors and inspiring others.

Coop strength  is an example of  Mead’s observation.   A credit union’s viability is from roots planted by a small committed group and nurtured with generations of member loyalty.

Some of these member-owner voices are being raised to challenge their institution’s monopoly of corporate power, not subject to their governance.

They are raising alarms in their local press and sometimes in national media. Some concerned CEO’s are no longer willing to follow their industry’s call to be still about their objections with their predatory peers.

Standing up for Democracy

In multiple institutional pillars today (media, universities, military, business) democratic norms are under attack. Voices are reminding credit unions of their purpose– to offer each member a financial home where their “daily bread” is the priority versus an insatiable drive for growth.

Even  in the uncertainty of misdirected events these individuals are joining hands and linking arms to return the coop model to its counter-cultural economic responsibility.

Credit unions will once again be recognized as a safe place where people, even when on the edge, can find hope.

This cooperative public spirit has transformed lives and the well-being of millions. It is an option that has attracted over one hundred million Americans as member owners and billions of their savings dollars.

But will this effort to rekindle credit union purpose succeed?

Martin Luther King stated the challenge this way:  Truth when crushed to earth will rise again.  This is the credit union’s public promise, even as some bow their knee to the altars of gold.

 

 

 

 

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The Battle Hymn of the Republic

American democracy has a unique capacity for creating and then honoring martyrs for its freedoms.  This weekend we celebrate one person who gave his life for our professed ideals.

This vigil honors a current person’s sacrifice.  It is a community gathering to  remember a woman who also believed in America’s promise.

One of America’s most powerful patriotic anthems was written by a woman Julia Ward Howe in 1861.

For the persons gathering above, they will sing, as she died to make us holy, let us live to make all free. 

Renee Good’s truth will cause millions to march on.

A mother of three.

Went on a christian mission to another country.

Stood up for her neighbors with whistles.

Was shot three times by a federal government employee, gun in one hand, cell phone in the other.

She made herself vulnerable to protect the vulnerable.

A presbyterian who followed her conscience with faith.

In death, she  inspires hope and conviction in us.

Power cannot silence her witness.

Her name will call forth the best that America represents.

And the ideals that its citizens will sometimes die for. Unasked and never forgotten.

She was indeed good.

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The Gift That Matters

One of the joys of the holiday season is receiving cards and messages from friends near and far.

These life updates tell of the many family ups and downs of our generation.  Occasionally they include special words of insight.

The following is an annual poem created  by husband Joe for his wife Zuki.  It reflects on the traditional effort to find just the right Christmas present, which is the same theme in O Henry’s short story The Gift of the Magi.  

The final stanza honors the most important gift we have, which is each other.

I Gave  You a Walking Stick

by Joe McLaughlin

I gave you a walking stick

Like the one you used to own,

And you gave me two turtlenecks

Like the ones that I’ve outgrown.

 

And so our Christmas gifts this year

Were ones each knew the other needed

Not new additions to our store

But useful ones that we’ve repeated.

 

O’Henry’s lovers’ gifts were rare

 But useless, which was their surprise.

Though they were young, they learned that year

How foolish love confounds the wise.

 

Our useful gifts are small but add

To what we can’t have too much of,

 For years behind and years ahead,

Reminders of our life-long love.

 

            Christmas Day, 2025