Author: Chip Filson

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Buffett’s Wisdom For Credit Unions: The Casino in the Cathedral

On Saturday CEO Warren Buffett’s four-hour, open-ended Q&A with Berkshire shareholders was a lesson in leadership.  In life’s wisdom. And in human values.   It was his last time as CEO.

If you read one of many excerpts or listen to a recording, you will be rewarded with a superb public discourse.

One observation is especially relevant to an issue confronting today’s credit union system leaders. That is the radically different approaches to assure future cooperative resilience.

The Casino within the Cathedral

Buffett stated in one response:  “Capitalism in the United States has succeeded like nothing you’ve ever seen, but it has what it is, a combination of this magnificent cathedral, which is produced on the economy like nothing… the world’s ever seen. And then it’s got this massive casino attached.”

The casino describes the speculative, short-term, and potentially risky side of capitalism, where quick gains and money changing hands are the primary focus. The allure and rapid growth of the “casino” can lead to the neglect or overshadowing of the “cathedral.”

Responding to a question about hedge funds entering the insurance business, Buffett pointed out that these firms, which specialize in buying and selling businesses, follow different “fiduciary  feelings” than Berkshire.  Berkshire’s goal is to acquire a business for the long term (forever), not turn around and resell for short term gain.  He believes his approach is the best way to create longterm value for his owners whom he wants to retain as well.

The Credit Union Analogy

Today there are two broad business approaches followed by credit union CEO’s. Driving these are two different “fiduciary feelings” about where one’s duty is directed.

On the one hand are those who believe the CEO’s primary goal is to maximize institutional growth and size however that is done the quickest.  In some instances, this is through mergers or purchasing external assets or even whole firms (banks).

The primary motivation is maximizing the rewards of leadership.  Sometimes this is while employed; or if not then, cashing out by handing the firm over to another credit union for the right personal compensation from a merger.

A growing current example is the increase in “mega-mergers.”  These multi-billion combinations offer the owners nothing that the individual firms cannot deliver.  Sometimes they are an effort to eliminate a local competitor; in others, it is to gain a larger space and personal reward in the credit union Cathedral.

This Casino approach to leadership is described by writer David Simon in the composition Privilege.  It ends with the words, I’ll play by  those rules:

It’s almost like a casino

You’re looking at the guy winning

You’re looking at the guy who pulled the lever

And all the bells go off

And all the coins are coming

Out of the one-armed bandit

And you’re thinking that could be me.

I’ll play by those rules.

A Composition for the “Cathedral”

The purpose which built the credit union Cathedral is captured in this 1850’s folk song by Stephen Foster,  Hard Times Come Again No More.

The first verse sets the scene:

Let us pause in life’s pleasures and count its many tears
While we all sup sorrow with the poor:
There’s a song that will linger forever in our ears;
Oh! Hard Times, come again no more.

Followed immediately by the rending chorus:

Tis the song the sigh of the weary; Hard Times, Hard Times, come again no more; Many days you have lingered around my cabin door, Oh! Hard Times, come again no more.

“It’s a song about poverty–financial poverty first and foremost, but it also hints at a poverty of spirit, of general misery.

“What’s refreshing about it, what makes it stick in our craw, is its honesty. It doesn’t flinch or pull back from showing real human suffering, bringing it to the very entrance to the drawing room: “Let us pause in life’s pleasures.”  (Source)

This 2010 recording is one of numerous current arrangements.  It uses pictures of the Depression to reinforce this 170-year old challenge for the American economy.  It could be a National Anthem for the credit union movement.

This second arrangement is how a credit union leader like  Doug Fecher (former CEO of Wright-Patt CU) might have recorded with his group when presenting his vision.

How credit union CEO’s make this business choice , will determine whether the movement can maintain its Cathedral.  Or become just another group playing in the casinos of capitalism.

 

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Harper’s Brookings Interview

I attended former NCUA board member Todd Harper’s interview with Aaron Kline of Brookings yesterday.  Thes session lasted an hour, was recorded and can be accessed here.

Notes from the Conversation

When asked why the administration removed the two members, Harper thought the firings were part of a broader strategy to eventually change the Federal Reserve Board before those terms expire.

In the February closed board meetings, he had voted for the staff downsizings that were  agenda items on the public April board meeting–which was cancelled.

He had not met with he DOGE people and was not aware of their role in the agency.  NCUA legal staff had not provided any advice versus the board removals.   Only Inclusiv had backed his suit so far. He expressed disappointment that America’s Credit Unions had taken a “wait and see” approach.

Data Referenced in Questions

In responding to two questions Harper used prepared data. One topic was the initial findings from NCUA’s call report collection of OD/NSF fees from credit unions over $1 billion.  The second was the number of CAMELS code 3, 4, and 5 ratings.  In both cases the data was used to support his previous positions.  He was critical of fees and asserted staff cuts could increase risk to the NCUSIF.  Therefore the need for a higher NOL cap.

In terms of future policy he listed three areas:  disclosure of executive pay for FCU’s, paying volunteer board members for dependent care, and revisiting the NCUSIF’s NOL cap.

When asked about taxation of credit unions he said it could impact safety and soundness by slowing the growth of retained earnings/capital.  But that Congress wlll decide the issue while noting the Washington state legislature’s proposal to tax state charters which buy banks.

My reaction.  The Harper one saw at NCUA, his priorities, selective use of data, and policy justifications were the focus.  This may have been due to the interviewer’s questions on areas such as naming rights for stadiums, bank purchases and OD fees.

Harper’s attention was his NCUA policy preferences, not the future of credit unions. There was no rallying cry to fight back on the firings. He is not turning the page either.  As he said in response to a question from a reporter, he is not  “going off Broadway.”

 

 

 

 

 

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May 1: Time for a MayDay Call for Rule of Law and a Popular Uprising

America is not living in a normal period of federal governmental conduct.  Trump’s largest campaign donor ($275  million) Elon Musk was given a non-legislative, non-elected temporary position. Thus informally  empowered,  his DOGE teams have gone into every federal government and some non-governmental organizations to mandate staff and program cuts.

These cuts and program closures are of Congressionally authorized programs and spending.  This is a pure power play with no oversight, accountability or  any formal authority.

It is total power without limits. In a democracy those who are appointed or elected to positions of power are called leaders.  In an authoritarian government, these individuals are called rulers.

A Fight for the Cooperative System’s Integrity

On April 16 President Trump removed the two Senate confirmed democratic members of the NCUA board. Only Chairman Hauptman, a republican whose term ends this August, remains.  There was no reason given in the firing email. Sue me if you don’t like it.  And both fired members have filed suit in federal court.

The power of both law and precedent suggest this action is illegal.  It raises substantive questions about NCUA’s authority and future.  The bottom line is credit unions are in a fight for the financial and legal integrity of their system.

Some credit unions will want to wait and see what happens before acting.  Others will delegate the burden and pay someone else to chart the way forward.  Many will just go on with business as usual.  With all the uncertainties in DC the assumption is that NCUA is at best pre-occupied, or at worst NCUA won’t dare buck Trump’s deregulation stance and stand up to credit unions.

One long-time reader suggested another approach: There is no reason to stand by this board, or jeopardize your voice by association.  They were neither effective as administrators nor wise enough to see the fog of the last administration. .  .

Why not push for the quick organization of a new board and the forward progress it might bring.  In the very least be ready to work with this administration and keep the CU agenda clear of the fall out that will follow.

That presumes a democratic, participatory system.  That is not what we have as illustrataed by yesterday’s announcement of the larest credit union liquidation in at least six years.

The Unilever FCU  Liquidation

Here are the facts last published by NCUA about this sudden $47 million credit union liquidation announced by NCUA on April 30.

At December 30, 2024, Unilever’s total assets were $ 46.7 million; net worth, $4.1 million (8.95%), virtually no delinquency on a portfolio of which 90% is real estate loans.  There are five employees, a single office, and very high average share balances ($29,400) and loans ($58,502), while serving just 1,448 members.

No conservatorship was announced. Instead an immediate takeover with no announced effort to find a merger solution.  No facts or explanation for the los was provided except to say the credit union was insolvent. What caused this sudden loss discovery? Why the instant liquidation?

The absence of any facts or reasons for acting suggests another regulatory-supervisory failure that is just being expensed away with insurance funds.

It reminds one of the situation last July when NCUA suddenly discovered that Creighton FCU had lost 20% of its value in the days right after filing its March 2024 call report.  The newly discovered loss was approximately $13 million in a $67 million FCU.  The credit union was merged with Cobalt FCU. There was no NCUSIF expense.  And no explanation of where the money went.

In the Unilever case, Hauptman, a one-person NCUA board, approved the outcome.  There is no evidence in support of this action.  Zero transparency for the members and the public.  This is what one person rule creates.  Is Unilever just the first of a series of unilateral decisions by Hauptman?

NCUA’s Defense of a One Person Board

On April 18, 2025 two days after the two board firings, the agency published an internal staff memo on the current state of the NCUA Board.  The memo was unattributed and contained no statements by any NCUA person.  It was just an anonymous assertion with these points:

Please be assured that the NCUA has precedent and standing delegations of authority in place to continue performing all operational and statutory requirements under the authority of a single Board Member. No statutory authority, internal legal opinion or other objective fact was provided to support this “assurance.”

In support of this undocumented position, the agency referenced a purported past event:

“During the Bush Administration (2001–2002), Chairman Dennis Dollar acted as a sole Board Member. He held a Board meeting, voted, and took several actions, both administrative and operational. Chairman Dollar recently stated in an article  in CU Today, “The records are in place at NCUA from 2002 that clearly establish the precedent that the Chairman can act as the Board.”

This statement is the most problematic of all.  Immediately after the board firings, Dennis Dollar called them “unprecedented.”  But a day later he claims that his prior tenure is now the precedent to follow this unprecedented event (see same article).

However NCUA presents none of the “records” that Dollar says are in place and certainly references no legal opinion.

What is even more curious is that the official NCUA 2002 Annual Report page 13 states:

Board members confirmed

The highlight of NCUA’s legislative year occurred March 22, 2002, when the U.S. Senate confirmed JoAnn Johnson and Deborah Matz, both serving as interim appointees, to join Chairman Dennis Dollar to complete the three-member NCUA Board.  

According to NCUA’s public account, Dollar’s two colleagues were indeed present, serving as interim appointees. There is no mention of his taking any action to set a precedent for one person rule to be followed in the future.

Following NCUA’s circular reasoning in citing a former board member and then that person confirming it is OK to do so, NCUA closes its staff update saying:

“It is the NCUA’s long-held view that a single Board Member constitutes a quorum when there are no other Board Members. Chairman Hauptman and NCUA’s leadership are equipped with the required authorities to continue implementing the Administration’s priorities. . . 

The memo asserts an  anonymous long-held view with zero factual, no legal reference nor any public prior event where this opinion was expressed.  The long held view is  an argument made of whole cloth.

One could just have easily asserted that in any organization’s bylaws or chartering authority where a  quorum is required, the term presumes more than a single board member is necessary to conduct business.  That is a more reasonable understanding of the quorum requirement.

So instead of clarifying Hauptman’s authority as Chairman, Vice Chairman and board member, the three-in-one board situation now, the agency presents a shallow, undocumented explanation to the staff and the public.

What’s at Stake this May Day

The rule of law is at stake.  NCUA has become a basterdized agency with no apparent legal grounding.  Fire the board and turn the agency into  one person rule,

This is the reason for the Unilever FCU unexplained liquidation is so important.  For the most consequential action the regulator can take versus a credit union is to put it out of business with no due process or public accountability.

The action was intended to demonstrate we’re really in charge now.  It is the largest liquidation in six years or longer.  A first example of how  the agency now “will ensure America’s credit unions are safe and sound.”   And if this arbitrary assertion of power can happen to Unilever FCU, it can happen to any credit union.

Credit unions today are confronting a situation where the entity charged with overseeing the legislation and regulation protecting the system, is itself acting extra-legal, unable or unwilling to even defend its current board status.   In other words the agency which enforces the law cannot defend its own legal standing.

Where are the agency’s lawyers so quick to explain the agency’s legislative interpretations?  Did they challenge the firings?  Brief Hauptman?  Were there resignations on principle if there was an obection?

Every NCUA employee took an oath to support the constitution, not a specific person in power.  Where are those individuals of courage and character in the agency?  Silence is consent.  Consent is capitulation.  That is the end of the credit union democratic experiment, unless there is a MayDay uprising starting now.

 

 

 

 

 

 

 

 

 

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An Annual Meeting that Owners Stand in LIne to Attend

Would your members take time to attend your annual meeting?  Is it an occasion the owners look forward to?  Will they learn something new?  Have a chance to meet board and senior staff?  What would the local newspaper or the credit union press write about the event?

Every  credit union that has issued news releases or been in the press this past year knows the value of public coverage.  The annual meeting is an opportunity to celebrate results, profile the leadership and show respect for the owners who make it all happen.

The “Woodstock for Capitalists”

This weekend in Omaha, NE Warren Buffet will lead Berkshire’s annual meeting.  It is a multi-day event for shareholders who travel from across the country and even foreign countries to attend. The excitement and preparations are described in the WSJ article from April 29.  The company has sent tickets to over 138,000 shareholders and another 6,000 to non-owners who want to attend the event and pay $5.

The actual meeting is so popular that CNBC will broadcast the event live-in Mandarin and English.  The high point will be the initial open-ended Q&A with Buffet and deputies answering questions from viewers and attendees—for hours on end.

This public dialogue always makes headlines as the annual report has been released months earlier.  Not just owners, but the general public is interestedd in Buffett’s observations on tariff’s impact, economic uncertainty, the role of America in the world. Viewers will want to know what the company might have in mind with its $350 billion in cash.

Buffett’s annual conclave for individual owners is a long standing show of respect to those millions of small shareholders versus the billions owned by investment companies such as Vanguard or Fidelity.  He rewards their loyalty by being with them, talking openly and sharing his leadership approach including succession.

The spirit is that “we are all in this together” and “I work for you.”  His approach is an example of a leader accountable to owners and creating a community of shared purpose.

A Buffet without Buffett

What credit union wouldn’t want this same spirited outcome?  But few even try even though the cooperative model presumes this same common interest among member-owners.

One credit union that has attempted to create is own sense of shared accomplishment and celebration is the $160 million Affinity CU in Omaha, NE.

At the annual meeting I attended two years ago there were talks by the state regulator, the President of the Iowa Foodbank as well as the required  CEO and Chair reports.  Scholarship winners were recognized, there was a free buffet dinner for entire families, prize giveaways and even video of one of the members telling his story.

The meeting included the election.  After which all board members, new and old, took their oath of office, in front of the owners.

This was an occasion combining all the elements that make Berkshire’s effort a national news event. It is not an organization’s size and resources that creates owner excitement for this required  meeting.  Rather it is the measure of leadership’s respect for the owners for whom they work.

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Fired NCUA Board Member Harper to Speak at Brookings

The Brookings Institution, a Washington DC think tank, has announced the following event this Thursday:

“Credit union regulation at a crossroads: A conversation with former NCUA Board Member Todd M. Harper.” 

Event Details:

Date: Thursday, May 1, 2025

Time: 11:00 a.m. – 12:00 p.m. EDT

Location: The Brookings Institution, Saul Auditorium, 1775 Massachusetts Ave. NW, Washington, D.C. 20036

This is the link to the online broadcast.

Two NCUA Board Members File Suit to Regain their Positions

On Monday, as reported in CU Today, Otsuka and Harper filed suit in federal court to regain their NCUA board seats.

The full 12-page suit can be found here.  One paragraph is especially important right now.  This is a statement about the quorum needed to conduct Board business.  It reads:

  1. The President’s removal of Mr. Harper and Ms. Otsuka has left the NCUA Board without a quorum, rendering it unable to implement Congress’s mandate in full. Only one Board Member, Defendant Kyle S. Hauptman, remains as both the agency’s sole Board Member and its Chairman.

But the Federal Credit Union Act vests the powers of the agency in “the Board,” not in any one individual, with a quorum requiring a majority of the Board. 12 U.S.C. § 1752a(d). And the “agreement of at least two of the three Board members is required for any action by the Board.” 12 C.F.R. § 791.2.

With only a single Member purporting to exercise authority, the NCUA cannot Case 1:25-cv-01294 Document 1 Filed 04/28/25 Page 7 of 12 7 continue carrying out the supervisory, regulatory, and institutional functions that Congress intended to be exercised by a Board composed of at least a majority of its Members.

Despite some agency and other comments, the lawyers assert that a single board member is not a legal quorum to conduct board meetings or other official business.

Questions for Harper’s Conversation at Brookings

The lawsuit is clear in its arguments that Trump’s actions are unlawful.  But it will take time to see how this legal process plays out, and lots can happen in the meantime.

Here are several areas  I hope Harper will address in this week’s public conversation:

  1. Circumstances at NCUA prior to the removals. The action was just prior to a scheduled board meeting in which the downsizing was on the agenda.  What was the proposed action?  Was there consensus among the board?  What internal work did DOGE representatives do?  Why are Hauptman and Fasio included in the suit?  What was their role in this action?  Did you ask NCUA legal staff for their position or to challenge this action?  What is your current understanding of the state of the agency’s staffing-how many are leaving and what critical areas do you see uncovered?
  2. In addition to following the lawsuit and Brookings conversation, what other public actions might credit unions or their representatives undertake to support this lawsuit? Amicus briefs?  How are your legal expenses being covered?
  3. Your role as Chairman at NCUA. Several significant trends emerged during your NCUA tenure in the cooperative system.  Two major ones were the accelerating pace of credit union whole bank purchases for cash.  The second was mergers of strong, long serving and increasingly large credit unions in which  the departing CEO’s and staffs gained significant personal compensation for setting up the merger.  In one case the CEO and Chair transferred $12 million in member equity to their personal control.  You did not address these topics while on the board.  What is your position on events like this?
  4. Your position on potential future regulatory changes. During your tenure as an NCUA board member you frequently cited the FDIC model to recommend multiple changes in the legislation governing the NCUSIF, the cooperative credit union insurance fund.  Would you support merging the NCUSIF and FDIC if that were to be proposed?  A second issue is potential federal taxation of credit unions in some format.  What is your position on such an initiative?

Finally, how might credit unions and the public get in touch with your and Otsuka now that your official emails and contacts have ended?

I intend is to attend the event in person this Thursday.

 

 

 

 

 

 

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An Annual Meeting Experience

The formal invitation came by mail and read as follows:

TowneBank

Cordially invites you to attend the:

Annual Meeting of Shareholders

Wednesday May 14, 2025  at 9:30 AM

The address for the meeting was the Richmond Convention Center. The invite closed:

Lunch will be served immediately after the meeting

Kindly reply by returning the enclosed card only if you plan to attend

The reply card asked if the attendees would stay for the luncheon.   The only required information was first and last name of those attending.  There was an addressed stamped envelope to mail the response.

TowneBank is $17 billion in assets with  2,800 employees in 51 branches throughout the greater Richmond, VA area.   TowneBank  converted from a mutual charter several decades earlier.  In that process depositors could buy  newly issued shares if interested.   My wife converted her  savings to stock.

TowneBank’s mission is:

Serving Our Community

Throughout our growth, we’ve never lost sight of our true mission: to continue to be a community asset by serving others and enriching lives.

Respect for the Owners

As a shareholder-owned financial institution, their board’s  goal is to provide its owners an acceptable return and ensure trust and confidence in the firm’s leadership.   Its invitation is gracious, formal in style and intended to encourage owner participation.  It feels welcoming.

A Credit Union’s Annual Meeting

The annual meeting of many credit unions conveys just the opposite impression.  Member-owners must register in advance to attend the meeting.  The event is often virtual only, with no member attendance permitted. The agenda may state as mine did: 

Matters requiring a vote

Please note that there is no new business to discuss. The only matter requiring a vote of the members in attendance is approval of the 2024 Annual Meeting minutes.

There is no voting for directors as the board nominated candidates equal the vacancies. No new items or old business will be permitted. There will be a Q & A for questions submitted in advance, and sometimes those added during the meeting.

This was the setup for Patelco’s 2025 virtual annual meeting last Friday.  There was much material a member-owner might download at this site.   The State of the Credit Union included 46 slides with much information both financial and operational efforts. The 2024 Annual Report is 18 pages of high level summaries, a financial statement (unaudited) and pictures of staff and board.

Patelco’s annual report and CEO meeting update met the letter of the law, but the Friday event lacked any hint of spirit. No celebration, no thank yous to members and carefully scripted to create an impression of a required exercise versus a shared experience with member-owners.

The Q&A Portion

The only section not prepared and sent in advance were member questions. Some were submitted prior and some during the meeting.

The cyber ransom attack was a major disruption in 2024.  It was discussed in the CEO’s summary and in the Q & A.  New information included an estimated total cost of $64 million of which  $37 million was fraud losses caused by some 6,000  members during the outage.  Their accounts were subsequently closed.  The sale of Visa shares in January resulted in a $35 million gain which helped offset part of the cyber attack expense.

The Annual Meeting’s Intent

Is the Annual meeting a mere administrative formality to be closely controlled by the organizers?  Or, is it an opportunity to enhance member confidence and support for their cooperative?

The meeting ritual can be much more than publishing required data and information. It  communicates leadership’s attitude toward their member-owners. Patelco’s approach signals control not mutual responsibility.  There were two examples that illustrate this approach.

Democratic Governance

When asked about the closed election process Chairman Rivera read the formal steps. He said there were no limits to board terms. Two board members’ service began in 1996. As of the next meeting, five more will have served for over two decades. Longevity is certainly an attraction for those in power.

The Chairman carefully avoided addressing the issue of democratic governance for topics such as: When was the last meeting in which there was a contested vote?  Ever? Why does the board encourage members submit proxies, thus surrendering their right to vote in board elections?  Why are no members allowed to attend in person?  How meaningful is the member’s meeting  in which all business is conducted with only employees present?

At a time when every segment of the country’s democratic processes seem to be under direct or implied threat, why is Patelco shutting down the democratic practice meant to be the hallmark of cooperative design?

This was a missed opportunity to highlight  fundamental cooperative governance.

Questions About Threats from Without

The second reason for engaging members is that this is the source of the movement’s political power.  Credit unions cannot out spend political funds or have enough lobbyists to rely on traditional forms of political influence. It is members voting their self interest that will secure credit union success in DC.

Three questions touched on  national topics. One was whether Patelco was safe and sound at this moment, referring to bank problems. A second asked about possible threats from a government agency. The CEO’s response interpreted the question as referring to credit unions’ tax exemption.

And the last question of the evening: After President Trump fired two of the three NCUA board members—does this threaten our deposit insurance?  CEO’s answer paraphrased: Your deposit insurance is not threatened, the NCUA board is reduced from three to one member but can continue to take the actions it needs to;  your insurance is federally backed. 

These questions referencing the external environment (taxation, NCUA board firings, bank uncertainties) were an opportunity to educate and prepare members for their critical role in countering these threats.  It was the moment to rally the members with straight talk.  Instead general assurances that everything is OK were given.

To suggest taxation is a just another banker’s campaign is to overlook the entire current context.  True as always, but that is not what is going on that makes this a potential opening now. The response that the firing of two NCUA board members means “business as usual” at NCUA and the NCUSIF, is ill informed or naïve.

Both questions were an opportunity to remind members about credit union uniqueness and why there is a federal tax exemption—the purpose and role of cooperatives in a capitalistic market place.   More vital, this purpose is regulated by a unique dual chartering framework. That system includes insurance fund options that require 1 cent of every member’s savings dollar be sent to capitalize their special cooperative fund.

To blithely assure members their fund and NCUA  function like “business as usual” is to misstate the whole intent behind the board’s two removals.  Moreover, the question of NCUA’s single member board authority is anything but settled.

If this is indeed the view of Patelco’s leadership about DC events, they need to do some homework.  More importantly, their power to address these topics will rely on member awareness and the ability to rally their engagement when needed.

The Bottom Line

Credit unions are different by design until those who lead them cease to believe in that difference.

TowneBank believes in courting and encouraging shareholder engagement. They talk the same language as credit unions about community and customer support.  But they back that community spirit up with invitations and hospitality.

Patelco’s actions speak much louder than the many pages of charts, numbers and operational activity in prepared reports. The annual meeting is not a member’s final exam for the prior year. It should be a celebration of mutual progress.

There has never been a time when acting to support democratic values and practice has been more vital.  Credit unions should be leaders in this affirmation of member-ownership and governance.  Without this effort, credit unions will increasingly be perceived as just another example of self-perpetuating oligarchy at work.

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A Tree Planting for Future Growth

Yesterday I was invited to participate in a Yoshino cherry tree planting.   The occasion was to recognize Callahan & Associates’ 40th anniversary (founded April 1, 1985).

The site was on Haines Point a long stretch of land between the Potomac and Anacostia rivers in the District.

There were almost a score of Callahan employees there to celebrate this four decade milestone. The tree is  a symbol of the natural growth the firm projects for the future.

I was asked to turn the first shovel.

Then the staff all joined in.

A fun event, in a lovely park with people dedicated to keeping the credit union spirit alive.

 

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The Sounds of Silence

Cowardness is contagious.  So is courage.

Last week I received along with others on his distribution list, the following retirement announcement from Joe Adamoli, Office of External Affairs and Communications:

Hello, Chip.  Writing to let you know that I opted in to the NCUA’s deferred resignation program. If you need assistance from NCUA Communications after May 2, please contact Ben Hardaway (bhardaway@ncua.gov).

Fair enough.  Just transitioning responsibilities on his way out the door.

So I followed up with the following query:

Is it possible to set up an interview with anyone still around to get an update on events?

The response hours later from Adamoli was:

Hello, Chip. The NCUA declines the request.

I asked for any “press releases or other announcements about events at NCUA. For example have there been any new hires on Hauptman’s staff?”

No response.   So NCUA leadership is so fearful that they wish to say nothing; or so sure of their role, they are no longer accountable to public discussion.  Or perhaps a combination.

It should be obvious that this is not how a governemtn regulatory agency overseeing a $2.3 trilllion system of cooperative credit for 100 million or more citizens is supposed to behave.  Public dialogue is essential for responsive and accountable agency functioning in a democracy.

This is not primarily about the future of NCUA; rather it is about the future of the independent  member-owned financial system in America.

Some will just want to wait and see, hoping that some confluence of events will protect member’s interest in their institutions.

But if no push back is attempted, we know nothing will happen.  With a challenge, we may not know the outcome, but that is why we must try. Has anyone put forth an action plan on Trump’s takeover of NCUA eight days ago?   It’s time for one.

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Nature’s Ritual

O sweet spontaneous
earth how often have
the
doting

fingers of
prurient philosophers pinched
and
poked

thee
,has the naughty thumb
of science prodded
thy

beauty     how
often have religions taken
thee upon their scraggy knees
squeezing and

buffeting thee that thou mightest conceive
gods
(but
true

to the incomparable
couch of death thy
rhythmic
lover

thou answerest

them only with

spring)

Note from poet’s almanac:  Edward Estlin Cummings, born on October 14, 1894, in Cambridge, Massachusetts, was a poet known for his radical experimentation with form and syntax.

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“Take Action Now”

That was the request of O Bee Credit Union President Andrew Downin’s recent letter to his members.

Dated April 18, two days after the Trump administration fired the two democratic board members at NCUA, I thought this was fast action.

The immediacy of the situation was different however:

We need your help. 

A proposed change in Olympia (WA) could directly impact O Bee Credit Union and the services we provide to you and our community. A last-minute amendment was added to Senate Bill 5794 that would impose a new tax on not-for-profit, Member-owned credit unions like O Bee. This amendment was introduced without any public input and ignores the real value credit unions provide. 

This new tax would reduce our ability to offer affordable loans, low fees, and financial support to our Members. It’s not just a tax on O Bee – it’s a tax on you, our Member-owners.

The email closes with this request:

TAKE ACTION NOW*
* This link takes you to a trusted website from our partners at GoWest Credit Union Association.

The letter ends with: Thank you for being a part of O Bee Credit Union. Together, let’s stand up for what makes credit unions special.

What Makes Credit Unions Special?

In this event, the credit union threat is from a change in the state’s tax exempt status. There is direct parallel at the federal level.

But threats to credit unions are more than taxation. Last week the Trump administration took over NCUA.  With a single board member whose term expires in four months, the agency will either bow to Caesar or navigate to keep member-owners’ interest first.

If the latter course is followed, it will need the support and engagement of the members. This existential threat may be harder to rally for member action versus opposing taxation,  No one is for taxes.

But it is critical to point out the NCUSIF logo on the credit union’s marketing materials represents a uniquely credit union designed and dedicated cooperative fund.  Even this email includes the words:  Federally Insured by NCUA.

During the Silver State banking crisis in 2023, the credit union community promoted their separate insurance fund as well as the differences in institutional structure and risk versus banks.

Many factors make credit unions special.   For me the most important takeaway from this communication is not the issue of a tax change or  the current Agency takeover in DC, but rather the request for members to act.

It is member involvement that will separate the credit union issues from the transactional lobbying circus in Washington.   O Bee does an excellent job communicating their credit union’s uniqueness in their monthly messages.

This corporate discipline to stay connected with members is a potent power.  This was the first but not the last time members will be asked to take action in the months ahead.