Author: Chip Filson

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Volume 1, No. 1 — The Bridge and Credit Union Democracy

This week I explore the integral role credit unions expected to play supporting democracy in America.  Yesterday’s post presented ten principles of cooperative action during WW II when democracies united to fight fascist dictatorships.

Today I describe how this role is framed in the first  credit union publication, The Bridge.

In the Beginning

The first national credit union journal appeared in June 1924.  Called The Bridge, the lead articles included:  Postal Employees Take to Cooperative Banking and New Jersey Credit Union Law Enacted.

But most importantly in this initial edition was the Announcement box centered on the front page.  This column gave the rationale for The Bridge’s name.  It was a metaphor referring to credit union’s fundamental  purpose to promote democracy.

Below is a copy of that front page.  After the photo  is a retyped, clearer version, of this statement of credit union’s role in America’s democratic development.

                   

 

 

 

 

 

 

 

The Paramount Function

Announcement!

May we present “The Bridge!”

Other issues will appear from time to time as the development of cooperative people’s banks throughout the United States warrants.  In seventeen states—from New Hampshire in the north to Mississippi in the south and west to Oregon—there are now credit union laws.  It is the mission of the “The Bridge” to recount further credit union progress as it develops period.

Why the name “The Bridge”? Alphonse Desjardins, great disciple of Raiffeisen and pioneer in the development of cooperative banking in North America, said in his book:  “Success for the young democracies of this continent depends upon the prosperity and worth of life to the millions of working men who compose them.” 

The paramount function of any democracy is to equalize the opportunity of those people who constitute it.  The credit union is in very fact—a bridge; it may be the bridge over which the tenant farmer travels the wide gap that separates him from ownership of the soil; it may be the way that opens the great land of Opportunity to the wage worker who finds his savings the “open sesame” to broader possibilities for himself and his family.

If credit unions, when logically developed on the broadest scale, educate great numbers of our people in the management and control of money; if they result in a better citizenship; if they serve as a great practical Americanization process—the credit union system will prove to be a bridge—over which, as a people, we may travel to a more perfect, a sound and a permanent  democracy. 

Casting around for a name for this record of credit union progress–why not—“The Bridge”

June 1924, Vol. L  No. 1

 

 

 

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The Credit Union Committment to Democracy

On a visit to Seattle a week ago, I found two credit union traces.   The first was a street level branch for BECU near the Pike Street Market on 1st Avenue.

The second  was a listing of books referencing credit unions from the business and industrial section of the Seattle Public Library.  One of the books was The Fight for Economic Democracyin North America 1921-1945 by Roy Bergengren.

Published in 1952 by this co-founder (with Edward Filene) of America’s credit union system, the book tells the founding story  describing those efforts as a crusade for economic demcracy.

As the title suggests, democracy is a key theme for this post WW II cooperative history.  It is more than a movement. Credit unions are integral to America’s  democratic aspirations for equal opportunity.

A Statement of Principles

Bergengren included an example of credit union support for war bond savings drives that proclaims this larger purpose for the cooperative system.  Here is the V for victory poster with the credit union logo and the statements of purpose.

Here are the ten principles retyped for readability.  Some are war related, but others much broader for credit union’s role with members and their communities (emphasis added).

THIS CREDIT UNION HAS ENLISTED FOR DEMOCRACY

  1. Our first objective is to win the war.
  2. We will encourage and promote thrift and the saving of money as a basic personal war service.
  3. We will encourage and promote regular saving by our members and families for security and the future.
  4. We will make loans to foster the growth of stability in our community.
  5. We will urge members to buy war savings stamps and bonds regularly.
  6. We will keep faith with the requirements of the community, state and nation in all our practices and policies.
  7. We will supply our members immediately savings that otherwise might go into channels that would drain the war effort.
  8. We will keep our members mindful that saving, with wise use of the resulting credit, will help shorten the war.
  9. We will keep the records of our progress clear, complete and available.

10.We will maintain the existing democratic character of our credit union and apply the lessons we are learning daily to our postwar democracy.

Today’s Credit Unions

Seventy-five years on, are credit unions living up to the legacy described by Bergengren and passed forward to today’s member-owners?  Is democratic practice described in this statement still a guiding principle?   Most critically, if not, what governance process has replaced it?

As demonstrated this past weekend, many believe America’s political future is at risk.  Can credit unions in their cooperative way show their commitment to maintain the existing democratic character of our credit union and apply the lessons we are learning daily to our  democracy?  

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Americans Celebrate their Democarcy

Seeing and participating publicly  in community creates hope, especially around shared values.

Common purpose was on full display this past weekend. Nationwide people  exercised their rights of self-expression and assembly supporting democracy.

These principles  are also the foundation for cooperative credit unions.  The movement claims over 100 million members and democratic governance.  Are these assertions still true?  Would members show their support as in these weekend scenes from the DC area?

The Young

And old

Not his first rodeo

Humor

And costumes

No sign, just noise

Brevity

Fpr all Americans

Real conerns

A candidate for 2028 whose appeal is truth

A democratic harvest festival for fall.

How does your credit union celebrate its democratic foundation?

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What to Do with Good Advice or Research?

“I think that God in creating Man somewhat overestimated his ability.” And,  “The only thing to do with good advice is pass it on. It is never any use to oneself.”  Oscar Wilde

With these caveats, I pass along some excerpts from a study of crypto summarized in a Banking Dive article this week:

  • Even as cryptocurrencies repeatedly make headlines and lawmakers debate bills intended to spur the use of the digital assets, the use of crypto for payments appears to have been on a decline over the past three years, according to a survey last month from the Federal Reserve Bank of Kansas City.
  • A vanishingly small proportion of U.S. consumers (1.9%) used crypto to pay for something in 2024, and that small figure is lower than it was three years ago, the Kansas City Fed found.
  • Additionally, merchants who accept payments, rather than consumers, seem to be driving even that limited use of the digital assets, according to the survey.

The full Kansas Fed analysis, dated September 24, 2025,  can be read here. (link)

Several conclusions pointed out in the Banking Dive summary:

The share of U.S. consumers who report using cryptocurrency for payments—purchases,  money transfers, or both—has been very small and has declined slightly in recent years.[1] The light blue line in Chart 1 shows that this share declined from nearly 3 percent in 2021 and 2022 to less than 2 percent in 2023 and 2024.[

There  is much consumer data about who uses crypto in the Fed study. The authors’ observation on  crypto’s future as a source for payments:

Moreover, consumers’ main reason for paying with cryptocurrency has shifted from the benefits of cryptocurrency relative to alternative payment methods (such as privacy, speed, cost, and safety) to the payee’s preference for receiving money with cryptocurrency, suggesting consumers’ use of cryptocurrency for payments has become more passive in recent years. Whether and how the evolving regulatory landscape around crypto assets in general and stablecoins in particular could facilitate consumer adoption of stablecoins for payments remains to be seen.

 

 

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Two Democratic Movement Events

Yesterday I spent several hours in two exercises with organizations founded on democratic principles.  The first was virtual, watching the Annual Meeting of State Employees NC. The second was in person, a participatory exercise for a much larger political event this weekend.

The Coop’s Annual Meeting

The theme. I believe,  of the two-hour credit union event was The SECU Difference.  The first speaker was the parliamentarian who announced authoritatively that the meeting would be under the latest version of Robert’s Rules of Order.

This was followed by the Chairman’s speech, a SECU foundation report and video and CEO Leigh Brady’s summary of the credit union’s performance for the fiscal year ending June 30.   All presentations were shown in a single, stationary camera frame, with no views of the audience or other members on stage.  Brady’s speech used a split screen when she showing slides to highlight numbers and goals.

The nominating committee chair reported that the number of candidates approved for the members’ vote just equaled the number of vacancies.  Therefore no action by members was necessary.  This prior board selection was approved by acclamation in contrast to the previous two years where there had been contests for all  open board positions.

The  President’s Q&A

The final hour was CEO Brady answering questions submitted in advance and read by an employee.  Up to this point every speech and action was fully scripted and  presented as done events with no member input.

So one would hope the members’ queries might be a bit more spontaneous and informative about The SECU Difference.   In short an opportunity for a CEO to show her “chops” that is the grasp of her role and understanding of  issues on members’ minds.

And the member concerns were plentiful and seemed candid even as grouped into common issues.

  • What is the credit union doing to help members feeling financial pressure?
  • Why are you so hard on loan aoolications?
  • Any changes planned to the Field of Membership?
  • Will SECU seek mergers?
  • When will small business loans be available?
  • Will fixed rate mortgages be offered, not just variable?
  • What is her outlook for interest rates?
  • How will the changes at the federal level affect credit unions?
  • When will the problems with the outsourcing vendor managing excrow accounts be fixed? etc.

The questions expressed real member concerns and experiences.  However every question received a written response of three to four sentences, prepared in advance, with little insight or empathy expressed about the topic.  Most replies referenced a process the member should follow if they had a problem, eg. contact your . . .

My take away: this was a 100% scripted event to conduct a required legal activity with no substance or owber interaction wanted.  And especially no live member involvement as in recent meetings.

The emerging SECU Difference is that the credit union is striving to be just like every other large credit union in both performance and example.   Some of the CEO’s accomplishments  include the replacement of over 1,000 ATMs, the installation of digital signage n the branches and the introduction of two new credit card options: a reward and a cash- back choice.  There will be a core conversion but that will take at least three years to complete.

The prior offerings that SECU created within the credit union structure including the life insurance company, the investment broker license, the real estate management company and the trust services were mentioned, but no performance details provided.   It is unclear if SECU still offers its ATMs without surcharges for non-members.  It has stopped the income tax service and ended the operational support ties with both Latino and Civic credit unions.

SECU’s financial performance is stable and it reiterated its commitment to operate branches in all 100 NC counties and focus the foundation’s resources on non profits throughout the state.  So the credit union may have refocused on its roots versus more expansive ambitions contemplated several years earlier.

What is different now is that SECU sounds and looks like virtually every other large credit union.  That’s neither good nor bad, unless you believe  focusing on creating member value options not readily available  elsewhere was the purpose of a coop.

North Carolina is one of the most attractive  states for new bank investment and branch expansion (after Texas and Florida).   Will not having a strategic difference, other than a tax exemption, be a sufficient strategy?  Time will tell.

Preparing to Participate in Democracy

The second two-hour event was a group meeting to discuss how individuals can become more engaged in influencing current political issues. It was followed by a sign-making, pizza-fueled party at a local church’s social hall. About 25 people gathered to learn and prepared to participate in the coming Saturday’s No Kings rallies around the country.

Seeing the Difference in Democratic Practice.

 

Our Legacies

What will our children and their children inherit from our democratic organizations’ efforts today?

 

 

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A Unique Beginning, But Is Now the End?

In March 1985 CUNA filed a friend of the court brief to support the newly chartered Local Government Employees FCU.   The charter date May 23, 1983.  The North Carolina Bankers Association filed suit in 1984 saying the FOM violated the FCU Act.

As reported in March 1985 issue of Credit Union Magazine (page 25) the suit was filed after the state Supreme Court ruled that State Employees CU (SECU) could not expand its FOM to county and municipal governments.

CUNA argued that “NCUA has statutory authority under the FCU Act to interpret the common bond provisions of the Act, that its interpretation is consistent with the legislative history and legal precedent and that the State Supreme Court ruling against SECU is inapplicable in this case.” 

Local Government FCU won.  It became an operational partner with SECU providing back office and branch support.  The two grew side by side for over four decades.  Local Government had its own board and began to diversify from total integration with SECU, ultimately founding a digital only charter, Civic FCU , to expand its virtual presence and business options.

After Maurice Smith retired as CEO of Local Governement, the new leadership began exploring other options.  SECU’s board may or may not have made a merger overture to the new LGEFCU CEO.  It depends on whom you ask. The upshot was the Local Government merged with its much smaller digital dopplinger June 1, 2025 , kept the Civic name and then proceeded to end its operational dependence on SECU.  No longer were Civic members being served through SECU branches after forty years of having access.

The Beginning of an End?

As the newly named Civic FCU began its independent existence, the transition has not been easy as noted in its July 24 website post. (link)

As it tries to build out its own delivery system the credit union has reported negative net income for the 2023 and 2024 yearends.   But the losses have begun to hemorrhage at June 30, 2025 post SECU separation.

In every critical financial and operational indicator, Civic is going backwards.  It reported a loss of $24.8 million versus a $9.2 million positive gain while working with SECU in  2024.  Compared to June 2024 balances, shares have declined by almost $600 million to $2.9 billion; members have gone from 407,926 to 380,898 with loan originations (-47.3%)and total loans both declining.

Civic has borrowed $320 million at June 2025 versus just $80 million one year earlier.  It is bolstering its net worth ratio with $52 million of subordinated debt.  Its total assets have declined from just over $4.0 billion to $3.66 in the first six months of this year.

The only increase has been in employee headcount going from 319 to 431 since 2024 yearend as the credit union opened at least ten new branches.

How will this story unfold– a new era or is it the beginning of the end?  Civic In its original incarnation was an example of operational, legal and cooperative ingenuity.   It succeeded in expanding credit union services by showing the power of dual chartering-a state charter in essence sponsoring  a de novo federal one.

Today that spirit has been lost.  Civic is struggling to just become another traditional credit union in a state with intense financial competition.  This strategy is using up the financial, reputational goodwill, and cooperative legacy that created a unique solution for serving their members.   Will the CEO and board find their way back to creating special value for their member-owners who seem increasingly skeptical of this independence turn?

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Clarifying Words

We live in a era of competing viewpoints and rhetorical advocacy.

Often logic, reason and especially facts are missing in the fire of verbal combat  or when issuing public relations statements supporting a position.

The more consequential the decision or a person’s position, the more elaborate the verbal bouquets.  These communications are not meant to persuade. Rather they entertain, advocate, sometimes threaten while shimmying past critical issues.

Examples this week include the speeches by the President and Secretary of War to hundreds of senior military  commanding officers, policy utterances by single NCUA board member Hauptman, or the rhetorical display announcing NCUA’s approval of the DCU merger with First Tech.

When Words Matter Most

So it was enlightening to read  someone  explaining at length what is at stake in our often charged and sometimes flippant public dialogues.  Here is an example:

In Boston yesterday Judge William G. Young answered an anonymous correspondent who trolled the judge on June 19 by writing a postcard that said: “TRUMP HAS PARDONS AND TANKS…. WHAT DO YOU HAVE?” Young reproduced the writing at the top of his decision finding that Trump’s attempted deportations of legal residents for their pro-Palestinian speech violated the First Amendment.

Then the judge answered: “Dear Mr. or Ms. Anonymous, Alone, I have nothing but my sense of duty. Together, We the People of the United States—you and me—have our magnificent Constitution.”

 “The United States is a great nation, not because any of us say so. It is great because we still practice our frontier tradition of selflessness for the good of us all. Strangers go out of their way to help strangers when they see a need. In times of fire, flood, and national disaster, everyone pitches in to help people we’ve never met and first responders selflessly risk their lives for others. Hundreds of firefighters rushed into the Twin Towers on 9/11 without hesitation desperate to find and save survivors. That’s who we are.

“And on distant battlefields our military ‘fought and died for the men [they] marched among.’ Each day, I recognize (to paraphrase Lincoln again) that the brave men and women, living and dead, who have struggled in our Nation’s service have hallowed our Constitutional freedom far above my (or anyone’s) poor power to add or detract. The only Constitutional rights upon which we can depend are those we extend to the weakest and most reviled among us.”

 “I fear President Trump believes the American people are so divided that today they will not stand up, fight for, and defend our most precious constitutional values so long as they are lulled into thinking their own personal interests are not affected.

“Is he correct?”