Author: Chip Filson

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What Does Your Banner Say?

I took this picture in Bethesda yesterday.  Where do you think this banner is hanging?  The local primary school, our town hall, outside a car dealership, a grocery store, a CVS drug store, or maybe a bank?

It is in the front yard of St. John’s Norwood Episcopal church.  You probably guessed this from the picture.

St. John’s has an active community presence.  My wife has volunteered at their Opportunity Shop for two decades.  A group within the congregation holds regular fund raising efforts for Ukraine in partnership with nearby St. Andrew Ukrainian  Orthodox Cathedral.

Last week the two churches held an Easter bake sale that raised $8,600.  The week before there was an appeal for 200 civilian tourniquets at $100 each.  In three days they collected over $4,000.

Welcoming the stranger,  you might say, is what churches are supposed to do. Right?

A Shared Value

That welcome is also one of the foundations of America as a land of hope and opportunity.  For at one time in our family histories, we were all strangers to this land.

Americans by and large take pride in their roots elsewhere.  In our family the kids trace their heritage back to the Scots-Irish, China, Africa and Missouri.  Why Missouri?  That’s where my Mom and Dad went to get married after Pearl Harbor because there was no required waiting period as in Illinois.

American businesses, such as Ancestry.com and 23 and Me, were created to help us trace our many heritages.  Families sometimes refer to their Mayflower or Daughters of the American Revolution relatives.   We are all immigrants for one reason or another.

However national daily events  are undermining this core American ideal and strength.

Transactions Versus Values

Would your credit union put the above sign outside your main office? Some have sought to serve recent arrivals even using alternative identification numbers.

But credit unions compete in a capitalist society in which dominance and control are sought and celebrated.  The deal maker is now as honored or more so than the entrepreneur.

Credit unions were designed as an alternative to this drive for power.  The industry’s top public policy priority at the moment is to protect their tax exempt status.  This was granted to reflect the non-profit purpose of serving those whose needs were unmet or taken advantage of by profit driven firms.

Values were core to this purpose.  Individuals could find personal economic opportunity through a cooperative structure they owned and directed.

But market realities and personal ambitions have a siren allure that is hard to ignore.  Here is the latest press release of this cooperative drive for market dominance headlined with the words:  A Powerful Partnership

San Diego, Calif., (April 11, 2025) – In a move that would change the financial landscape of Southern California, California Coast Credit Union (Cal Coast) and San Diego County Credit Union (SDCCU) have announced plans to merge, pending regulatory approval and a Cal Coast membership vote.

Upon approval, the combined credit union will boast a powerhouse organization with assets totaling nearly $13.5 billion, 65 branch locations, and more than 1,400 employees serving members in Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo, Santa Barbara, and Ventura counties. The organization will remain the fourth largest credit union in the state and become the 16th largest in the nation.  (emphasis added)

Size, power,  dominance, strength, resilience are all elements of a transaction versus a value motivation.

Both institutions are financially strong, viable, creative and successful.   However the cooperative merger math is that 1 + 1= 1.   No longer are their two boards, two management teams and business strategies seeking to better serve their longtime member-owners.   Not a single benefit is listed that is not already available for a person choosing to join either credit union.  The industry has in fact reduced not expanded its reach.

The Stones Will Cry Out

One would hope that the long standing service of these credit union directors would have given them some insight into what makes credit unions different and successful.  It is not size, ranking within their state or nation, or even the number of branches or ATM’s.

Values inform purpose.  Together they can make credit unions a force to serve where for-profits will not.  Without these integrated in the institution, the cooperative difference is lost.

Values are talked about at funerals.  I attended performances of Brahms German Requiem this weekend.

Two English translations summarize the realities we all face:

“All flesh is as the grass, and all the glory of mankind is as the flower of grass.  For the grass withereth and the flower thereof is fallen.”

And in case we miss the point, “Verily mankind walketh in a vain show, even his best state is vanity.”

The sign above has a little noticed two words in the lawer left hand corner.   It says “Faithful America.”

The Brahms Requiem and two words on the banner remind us of our transient and transcendent opportunities. If we are silent in these moments of responsibility, one  prophecy  says the “rocks will cry out” the truth of our behavior.  What sign will you put outside your credit union?

 

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Our Moral Moments

When Jim Blaine was CEO of SECU(NC) he was sceptical of his peer’s elaborate strategic plans.   Instead he offered his mimalist version as follows:

Vision:  Send us your Moma.

Mission: Do the right thing.

These were guiding principles for how to serve members as well as evaluate tactical business options.

I was reminded of this simple guidance when reading the following “bettter deal” story from a CEO’s update for the staff and board:

Another member, Jessie, was set on purchasing a vehicle from Carvana for $19,880, even though its actual value was $15,300. While he was still willing to proceed, I wanted to ensure he got the best deal.

After a quick search, I found the same vehicle, in the same color and trim, but two years newer at a local franchise dealer for the same price. The vehicle was priced at its actual value, making it a far better investment. Jessie ended up purchasing the newer vehicle and closing through CUDL, securing a much smarter deal.

These are Not Normal Times

Yesterday another administration error was corrected by the Supreme Court which ordered that a migrant mistakenly sent to El Salvador be returned to the US.  The administration denied it had the power to do so.

Senator Cory Booker recently spoke:

“These are not normal times in America, and they should not be treated as such. This is our moral moment. This is when the most precious ideas of our country are being tested….”

As DOGE has now moved into NCUA, it is important to remember Booker’s assertion that,  “In this democracy the power of people is greater than the people in power.”

The Wrong Part

While resignations on principle, the dismissal of career federal employess and wholesale demolition of federal government departments may  seem remote or even necessary to some, the continued destruction of government services will ultimately negatively affect every American.

But we need look no further than credit unions to see how hard it is to follow Jim Blaine’s simple maxim to do the right thing.

CUDaily founder Frank Diekmann recently wrote an opinion piece Lots of Questions About Mergers. He .summarizing the multiple motives given members including examples of questionable accuracy:

The vague claims about “more products and services” and “better rates.” The big payouts for some management teams and nothing for the members. Whopping amounts of net worth just being transferred to the acquiring CU. And relatedly, a question that is never answered: if you’re lamenting you just couldn’t offer certain products and services, why didn’t you tap into some of your deep pile of capital? 

Also related, and a question I wish I could ask of many CUs: where in the world has the board been over the last few years or decade?

Our Moral Moments

What we are seeing in our public and professional lives show the inevitable challenge every person encounters at some point.  Perhaps more than once as we grow through stages of increased responsibility and accountability.

We all believe in our hearts we will do the right thing when necessary.  Unfortunately many others rely on a reality that “everyone has a price” with which they can be induced to go along.

Author and spiritual leader Richard Rohr described this human circumstance as follows:

It may not be in our power to determine how things will unfold, but it is in our power to decide how we respond. It is in our power to hold on to the practices that nourish us, inform us, and give us courage. It is in our power to remain in integrity, to choose nonviolence and noncooperation in the face of all the wrongs we are seeing. 

The beginning of a way out is to honestly see what we are doing. The price we’ll pay is that we will no longer comfortably fit in the dominant group!

Doing the Right Thing may not put you in the dominant group.  Remember that your ability to resist is because others gave you the personal wherewithal to both see and chose another way forward.  That is the individual foundation which all institutions require to survive.   We call that personal responsibility democracy.  It is how we achieved the freedom we share today.

 

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Democracy Without Votes in Credit Unions

This is the season for annual meetings in credit unions and stockholder owned companies of all sizes.

Make Your Voice Heard

Because I inest In Vanguard  mutual funds I sometimes receive the above email subject line followed by this message;

Be the vote that counts

Dear Vanguard Investor,

As an investor in these securities, you have the right to vote on important matters. This is your opportunity to make a direct impact on your investments. Your vote counts!

A Credit Union Example

For over three decades I have had a CD in a credit union of approximately $20,000.   It is paying  .25% interest.

The credit union recently sent all members this email announcing their annual meeting for member-owners:

Credit Union 2025 list of candidates nominated

Upon sending in my interest in attending, I received this response:

Thank you for your interest in the 2025 Annual Meeting. We have received your request for registration and will be sending out a confirmation with the meeting access information prior to the meeting on April 25, 2025.

Democracy In Practice ?

The required annual meeting and election of board members is the single most important element of member-owner governance.   In many credit unions today converting the meeting into an administrative formality with no actual member involvement is par for the course.

Let’s be clear.  This is not democracy in any sense of the word.  Instead of seeking member participation and celebrating the cooperative model, it is an exercise in perpetuating power, or  the using current term oligarchy.

While I assume these volunteers are experienced and committed, they are missing the most critical element of leadership:  acknowledging their accountability to the member-owners.   That is the foundation of trust that undergirds every financial institution.

According to NCUA data, between 95% to 97% of all credit unions are rated camel codes 1 and 2.  This is not about financial oversight, but rather responding to the needs of members and communities with presence and engagement.

The future of credit unions may depend on members seeing their involvement as something more than a customer. To achieve that, they must be respected as owners.

Right now our votes do not count because there is no voting.  Credit unions lacking this member participation are missing their most important advantage versus all other options.

 

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Should Credit Unions Worry About US Tariff Policy?

As domestic financial service providers with little or no imports or exports, should credit unions be concerned about Trump’s tariff policy?   Will it have any impact on their members and communities?

I believe the answer to both questions is yes.  In almost universal critiques, the approach is lacking any economic sense.

From the Center for Strategic and International Studies (CSIS) on April 8, 2026, Trump Scores Own Goal:

In the trade world, early indications are that Trump has just committed one of the greatest own goals in history, and, what’s more, it was deliberate. The immediate market reaction was sharply negative, but it will take time to determine how bad things will be.

And here’s why:

•
Through his actions and the way the tariffs were rolled out, Trump has signaled that the United States is an unreliable friend and partner. That will come back to bite future administrations because once the bonds of trust and confidence are broken, they are exceptionally difficult to restore.
• Globalization may be on life support, but it’s not going away, except maybe in the United States. Its enabling tools—digitization and enormous cost reductions in transportation and communication—are still here, and businesses will continue to use them. Creative companies will find new paths and create a new equilibrium without us. That will hurt our growth, but also our ability to innovate and create as we isolate ourselves.
•
Tariffs are a regressive tax. They impose the greatest burden on low-income people who spend most of their money on necessities such as food and clothing—the very things most likely to see price increases as a result of the tariffs. Ironically, the revenue generated by the tariffs, which CSIS estimates at $600 billion per year, will be used to finance the extension of Trump’s tax cuts, which primarily benefit the rich.

The consensus is that the current approach will damage the economy, raise prices and slow  growth.  Not to mention increase US isolation in the existing global world of trade and alliances.

Implications for credit unions

  1. Indentify members and firms in your community most at risk.
  2. Develop prgrams to help them navigate the economic uncertainties.  This  usually means extending lines of credit.
  3. Enhance core market opportunities.  Avoid undertaking new risk as members who face growing uncertainty will seek the security of established and trusted relationships.

Your thoughts?

 

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With Whom Do You Share Your Brand?

One of the truisms about branding is that grreat companies create great brands.  Brands do not build great companies.

Tim Calkins is a markeing professor at The Kellogg School of Northwestern University.  He publishes a monthly newsletter, Strong Brands,  providing contemporary  examples from his classroom.

The latest edition includes an update on Tesla, a brand he has written about before.

Tesla
In my last post I wrote about Tesla’s brand repositioning. Things seem to only be getting worse and sales were sharply down in the first quarter. News that the Proud Boys are now showing up at Tesla dealers to show their support will only further polarize the brand.

Driving a Tesla has always been about making a statement. I suspect supporting the Proud Boys wasn’t the statement most Tesla buyers were trying to make. 

Credit unions have both individual identities as well as the generic reputation of being a different kind of financial institution.   What one credit union does well or becomes a front page story,  affects the cooperative system’s brand.

Just as important the individuals and organizations a credit union decides to work with or to support affects their reputation with their members and the communities they serve.

As credit unions decide their NIL relationships, the business partners they seek to serve, and the community events they support, they are creating a reputation much greater than a financial service option.

As boards consider whether to facilitate digital currency options, the sale of marijuana or vape products, or finance options such as interval vacation  ownership, consider the impact on the “brand” the credit union is presenting  members.

When a credit union offers  a special financial product or specific business loans, it endorses that activity.

For example is now the moment to promote a special financing option for the purchase of Teslas?

As in life, what credit unions do with members; money always speak louder than the latest PR or messaging  campaign.

 

 

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Trump’s Tariffs Affect Cherry Blossom Run

The annual Credit Union sponsored  Cherry Blossom 10 mile run on Sunday April 6  in DC had a last minute adjustment.

Runners Learning about a Course Change

On the day before the race, Saturday, April 5, President Trump’s 10% tariff on all imports to the US took effect.  The tariff covers all products, services and intellectual property from any country, regardless of that country’s tariffs on the US exports to them.

Race organizers were told by the US International Trade Commission that the mile, as a concept for measuring distance, was an English “intellectual property” import.

Therefore the race must be expanded to 11 miles, or 10% further, or face a last minute cancellation for the over 20,000 registered runners.  The race committee agreed to the request and moved the finish line by an additional mile.

Credit Union Runners React

While some participants felt that politics should not be a part of this effort to support the  Children’s Miracle Nework, most were stoic about the additional distance added right as the runners were assembling.

One runner, Alix,  who has competed for many years, commented that the added length was no worry.  That’s “because credit unions are always willing to go the extra mile for their members,” she said.

 

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The Power of Questions. . . and Answers

This past week Senator Cory Booker stood in the chamber for over 25 hours delivering a powerful call for the  people to challenge the Trump administration’s threats to democracy.

It was an heroic physical commitment to ignite awareness of the critical political tests facing the country.

He described this time as our moral moment with America’s fundamental values on the line.  It was a call to the conscience of a nation.

Our democratic capability for change he summarized  as the power of the people is greater than the people in power.  

Our Moral Moments

 People may or may not agree with Booker’s impassioned call.  But his basic questions are ones every person will encounter in their own experiences.  He asked:

What will define our greatness in the moral moments we face?

What is the role of character?

What would we view as threats to our bedrock commitments?

Individuals will craft their personal responses as to what they want to uphold for the communities and society in which all live.

One person who analyzes the special role of credit unions and its abundance of business examples is Ancin Cooley, a credit union consultant. I believe his observation about credit union’s current political circumstances draws us back to Booker’s questions.

Tigers with Amnesia

In reflecting on the history of the credit union movement, one fact stands out: our strength has always been rooted in our members and communities—not in politics.

From its inception through its adolescence, the cooperative model thrived without relying on the president or Congress to dictate how we serve our members.

Today, many credit unions manage capital budgets that rival those of local governments, underscoring a powerful truth: real power resides within the community we live. Credit Union are tigers with amnesia.

While political wins and advocacy play a role, we must never lose sight of our true source of strength. The idea that credit unions must depend on politics is, in many ways, contrived. Instead, our focus should be on empowering our members and meeting their needs, regardless of which political party is in power.

After all, the cooperative movement challenges both traditional capitalism and political centralization by proving that community-driven finance is a force to be reckoned with.

Senator Booker and Cooley are both asking we carefully consider what we believe in.  What are we willing to stand up for? The actions we take when moral moments arise, will test who we will become.

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Tired

Artist Elizabeth Catlett (1915-2012) was born in D.C.  She went to the segregated Dunbar High School and graduated from Howard University.

Last night I attended a National Gallery of Art reception celebrating the opening of an exhibit of her work called, A Black Woman Revolutionary Artist and All that It Implies.

Her skill as an artist in all mediums is exceptional.  Sculptures large and small are done in stone, bronze, terra cotta and wood.  The drawings, prints, oils and pastels are equally expert.

But just as important was the constant purpose for her art.  She believed art should be for the public and address the hopes and lives of the people she portrayed.

When she saw the Mexican mural artists on a trip to San Francisco, her work focused on portraying the lives and political struggles of America’s  black communities.

The NGA’s hundreds of works are immediately accessible upon viewing, whether literal portraits or abstract sculpture.  They communicate feeling and meaning at once.

The terra cotta sculpture below, Tired, captures a woman at rest, her plain clothing suggesting a day of labor.  Her long neck and uplifted chin suggest pride.  Her folded hands, rest.

This is a very small, even understated, example of some very dramatic sculptures and portraits of hundreds of Catlett’s creations.

It communicates because it is universal in its expression.  When have we all not at some point felt this way.  Especially those who, like the artist,  commit their skills to change the lives, futures and understanding of those society leaves behind, ignores, or persecutes.

Struggle for change in any country is never easy or finished.  It is simpler to move on to more traditional roles.

But this exhibit of a lifetime dedicated to a revolution demonstrates a constancy of purpose that enhances every  single work.

Elizabeth Catlett is an example of an artistic leader whose life was dedicated to change how we see and remember our country’s past.

If in D.C. visit the National Gallery East Wing for an experience that will be enlightening both for the art and example of a person who never tired fighting for change.

While there will be few who will ever create such a  leadership legacy, we all leave examples of our ambitions and passions.  Sometimes that  motivates persons to spend their professional lives with credit unions.  How would you like that work to be remembered?

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Why I Love My Job

From the field. The following examples are from a CEO’s monthly report to staff.  He documents their business strategy to “out-local” the competition.

Serving One Member at a Time

A member called in about his credit card. He stated he falls short on funds every month and has to use his credit card and can’t get out from behind it. He was asking if there is a way to change the payment date.

I looked deeper into this as he is on a fixed income and struggles financially due to always falling short about $60 monthly. I asked him if he had any other debt, and he said he had a couple Affirm loans he got to buy shoes and clothes.

I know we are here for our members, so I told him let’s look at a home equity as he has plenty of equity on the home. Here is where we now stand.

Instead of this member falling short $60 monthly and having to use his credit card we are doing a home equity and consolidating his credit card and his Affirm loans. He will now have an extra $100 monthly to give him some wiggle room. We will also decrease his credit card limit down to $1K to prevent him having easy access to a large amount. This was actually his idea to decrease the card’s limit.

The best part is this member will now have a couple hundred dollars in his pocket out of the loan proceeds and he is getting out of his financial struggle.

Yesterday he called and asked if it was ok to use his credit card for gas considering we haven’t closed yet. He said it’s been tough as he had to use a lot of gas for a trip as he just found out his sister of 77 years old committed suicide.

We just got approval to close on this loan. I’m sending this member a sympathy note and also putting a $10 member appreciation card in it.

At maybe the toughest time in the member’s life we are able to help him and bring some light into this time for him. He is very grateful and says this is changing his life for the better. This is why I love my job!”

Assistance to Members & Non-members Facing Layoffs

Also this month the credit union reported initiatives for local federal and  university employees being laid off.

Messaging was sent to members employed by the federal government, identified through direct deposit data, offering assistance in the event they may face an upcoming layoff.

That assistance could run the gamut from loan restructuring and payment deferrals to budgeting advice and financial solutions based on unique circumstances.

We have 16 associates designated as a Certified Credit Union Financial Counselor (CCUFC) and stand ready to help any impacted member.

The University of Dayton announced the lay-off of 65 individuals and an offer was made to the UD Vice President of HR of similar assistance to those people affected.

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CDFI Helps Savers Choose How Their Funds Are Loaned

The top 25 banks in the US had total assets of $21.1 trillion at December 2024.   Number 25 was Ally Financial Inc. which is $192 billion in size.

The largest bank was JP Morgan Chase & Co. at $4.0 Trillion.

The largest credit union is Navy FCU which reported  $ 181 billion at year end. The total size of  the cooperative credit unions was $2. 3 trillion.

The bottom line is that credit unions will never win by trying to be bigger than the many options consumers have.  Rather, they have to be better.

Using Their Local Advantage

Last week I presented an internal change in Vanguard’s fund management that gave their investors the option to vote their individual share ownership as they wish. This change empowers each share owner to chose a voting option rather than follow Vanguard’s traditional policy.

Could credit unions give their shareholders the opportunity to invest their savings in specific credit union loan programs?

Now, a CDFI bank has a program to do just that.  A March 25, 2025 Next City article reports how Sunrise Banks’ new net zero banking program lets customers put their money where their mouth is.

It started because one employee, Laura Wildenborg, had spent “spent 10 years taking kids on field trips to go rock climbing or cross-country skiing across the region, all to inspire children to love and care for the environment.”  She is an avid outdoor enthusiast and concerned about the environment.

She pivoted to banking after receiving her MBA in 2020.  She wanted to bring her prior interests to her new career.  This was her approach:

Wildenborg serves as a project leader for Sunrise Banks’ net zero banking initiative, which launched in July 2024. Net zero banking refers to the investment in projects that will reduce or eliminate carbon emissions.

Customers of the bank can opt in and allow their deposits to be loaned out only to net zero projects. Since launching its net zero program, Sunrise Banks has received $5.5 million in deposits and has loaned out nearly $22 million.

The  article gives several examples of customers being surprised to know they can choose how their deposits are used.

Wildenborg says one customer shared that he never thought about what the money in his bank account was used for.

 “With this program at Sunrise, we put that money where our values are, which means in the projects that will reduce carbon emissions — in turn having a positive impact on our community and environment.”

It’s Not the Size That Makes a Difference

Sunrise Banks, headquartered in St. Paul, Minnesota, lends to residents and small businesses in underserved communities.  It has $2.3 billion in assets and $2.1 billion in deposits, making it the 15th-largest bank in the Twin Cities.

Here is a video that describes their approach to the community.  Their motto is our success depends on the success of the communities we serve. Note the use of the word “movement” in the video.

(https://www.youtube.com/watch?v=B5C14WIqmC8&t=68s)

This organization focuses on its local impact and connections, not its size.  That used to be the credit union advantage.  Is that still the thinking?