Author: Chip Filson

What lesson does the oldest continually operating restaurant in Bethesda have for credit unions?  Especially those who believe they need size and scale to succeed?

In 1935 in the middle of the Depression,  the Tastee Diner began operations serving twenty-four hours a day.  (Note: the Federal Credit Union Act was passed the year before) The diner would close only  42 hours  a year from noon on Christmas eve until 6:00 AM the day after Christmas. However,  it reduced its hours from 5:00 AM to 10:00 PM after reopening from the covid epidemic.

Its long narrow layout is just like the typical  diner:  wooden booths or single seats at the counter where you can watch as the cooks prepare your meal at the open grill.

The menu specializes in “comfort food” such as a full  breakfast anytime.  Daily specials are offered– spaghetti or fish on Fridays, meatloaf and mashed potatoes , with two sides; and every familiar  sandwich option including grilled cheese and  hot dogs.  The menu has daily specials and senior selections at reduced prices.  Its real milkshakes are served in the metal mixer can which contains at least two full soda glasses of my favorite food.

The owner sits on a counter stool opposite the cash register to welcome you.  Sit anywhere.  Waitresses welcome you back.  You know their names.  Montgomery County  police on duty stop by for takeouts. High school students gather after football games. Families have birthday celebrations with young kids and floating balloons;.  “Seniors” like my wife and I, go to have an outing in a familiar setting.   The tunes on the jukebox at each table still cost just a quarter to hear Johnny Cash Walk the Line or other 1960’s Rock and Roll favorites.

A New Neighbor

In September 2022 a new neighbor opened its doors.   Marriott International cut the ribbon on its new headquarters, a 21 story building built using all the vacant land around the diner.

The chairman of this Fortune 500 firm (ranking at # 173) is David Marriott.  In the September 21, 2022 Washington Post article celebrating the opening, he presented the company’s history and how it chose DC as the base for this Utah raised family.

In short, David’s grandfather opened a root beer business in Washington after completing his two year Mormon mission assignment on the East Coast.  Ice ooid root beer from his first stand was not in great demand in winter cold, so the business expanded to hot food such as  the Teen Twist Ham Sandwiches, Mighty Mo  Burgers.  The business’ new name: Hot Shoppes.

Today, there are no Hot Shoppes. Marriott long ago diversified  into the airline catering and then lodging businesses. Now it operates 8,100 hotels with brands from Aloft to the Ritz -Carlton.

The New Building’s Notch

But what does this international food  and  hospitality conglomerate have to do with   Bethesda’s Tastee Diner?

In the 2022 interview with Chairman David Marriott the oldest, longest operating Bethesda restaurant came up this way:

The views are great from atop the glassy new headquarters, designed by the firm Glensler.  David pointed out the Sugarloaf Mountain in the distance. We were standing near a notch in the Building.  Twenty floors below was the reason for the notch:  the Tastee Diner building ,whose owners had declined to sell.

“When my parents were away, the woman who watched used take me there” he said. 

Not to Hot Shoppes?   “She liked “Tastee Diner,” David said.

The Priceless Moral of the Story

Want to know how to counter the threat and buyout temptations of even the most aggressive credit unions?

Have loyal customers who seek your product, especially those who care for the children of the founder of a restaurant chain or even a credit union executive.  Such loyalty is a variation of SECU’s mission statement: Send us your Moma! And also, keep local ownership of the business.

Following the Post story, the next time we went to Tastee I asked the owner sitting at the counter why he didn’t just sell out.   He said he owned the land and they “wouldn’t offer me what I though it was worth.”

In the recent decade all of the chains and restaurants our family visited growing up have closed:  Roy Rogers, McDonalds, Dominos and Pizza Hut plus other locally managed eateries.  Today I know of no restaurant in Bethesda that has been in business for over ten years. Most new entrants create new concepts to appeal to a well to do clientele.  These primary locations seem to change business brands about every 3-5 years. Their “newness” gets old fast.

Local matters, especially when you “own the land.”   So the next time some glib acquisition broker or salesman comes calling to buy your credit union, just remember a child’s babysitter who brought the future leader of Marriott International to the Tastee Diner because  “She liked the place.”

A loyalty so special that the “child” recalls  the experience four decades later.  Local loyalty is priceless.

The strategic advantage that is the foundation of every credit union is its local roots.   Local does is not just a geographic focus.   It includes connections,  relationships, reputation and knowledge that extends back years, or even generations.

This advantage allows members to see the coop as part of their community.  It is a financial and physical presence that helps define the character and economic opportunities for their neighbors.

Unfortunately some actions can compromise this long standing presence, especially mergers which often eliminate any vestiges of a credit union’s roots.  No more local employment, direction, or participation in community life and leadership remains.   Only a virtual connection is left, which may serve some well, but others not at all.

An Example of Why Community Matters

Sometimes it is easier to see this critical role from another industry’s perspective.  The following is the story of both the demise and the resilience of local newspapers.   This editorial is from the October 23, 2024 Falls Church News Press.

This week is an especially sad one in the hometown of our editor.   Following the termination last year of the publication of the Santa Barbara News Press, after over 100 years, this week its remains were being sold off in an online auction, bit by bit, pennies for the dollar.

Meanwhile, the old Spanish Days-styled News-Press building downtown is gutted, like mugged stabbed and left for dead behind a dumpster where so much activity and discourse on the direction of the community took place daily for so many years.

A supporter of this News-Press for which this Falls Church one was named, and where our editor began writing while in high school, made the point last week talking about the importance of community newspapers:

It’s not just about news, per se, but about the dialogue on the interests and future of the community that is a local newspaper’s essential component. It isn’t about whether or not a newspaper’s slant or editorial content is agreed to or not, but it is the way in which the newspaper enters the homes of residents, by way of being gathered off the roof or out of a rose bush as tossed by a wayward delivery boy, and read and discussed for its contents in the  midst of the daily life  of the community which makes it so essential. 

It is the entry point for a community-wide dialogue involving everyone. It is a proxy for the community itself, as it were, its agora, or public meeting space as per the ancient Greek city-states, delivered ito every home where matters are fleshed out and elevated to everyone’s common interest and concern. 

This is what a newspaper is, and to be its best, it has to be in print form in full physical, sensual and tactile presence, to function most adequately and widely where no element of an entire community can be neglected or dismissed.  Also, at best it is the product of a member of that wider community, a citizen exercising a calling to provide the service in question according to the highest of principles, and not the government, to most effectively trigger that community engagement.

The Credit Union Parallels “When At Their Best”

While the functions of a local newspaper and financial institution are very different their contribution to a sense of community is similar.

The daily role and public need for local community financial institutions mirror many of the same contributions of a local newspaper.   The credit union’s presence is seen, it is locally directed by those who view their roles as volunteers or employees as a “calling.”  It is the collective for borrowing and savings by individuals and organizations to better their futures. Finance, like news, is an essential service.

Decisions made locally for the welfare of all give cooperatives a special function alongside the many other institutions vital for living and working together in common purpose.  By design they pay their success forward to benefit future generations.

(Note:  For a current example see press release, 717 Credit Union Launches “Forever Youngstown” Initiative)

These coop business virtues sustain both large and small credit unions.  They contribute to a sense of shared identity that is more than just geographic boundaries.  Financial services is a critical part of the fabric of any  community in which individuals choose to establish their identify and live their lives.

When credit unions make this contribution they are showing their”best selves.” Unfortunately other motivations and temptations can come along that  negate these cooperative advantages. That situation will be the subject of a future case study.