Going for the Green at USC

A source of federal funding in the Inflation Reduction Act will soon be making grants to accelerate solar energy investments.

The example of a credit union’s preparation to access these funds is from Next City an online reporting blog.

The case study by Bianca Gonzalez was posted this week and is  edited for brevity.

A More Equitable Approach to Financing Our Green Future 

The USC Credit Union, a certified CDCU and CDFI, recently developed several green lending products that make emission-reducing energy upgrades more equitable for communities near the University of Southern California campus in South Los Angeles and East Los Angeles.

In the 2021 Inflation Reduction Act (IRA), the Greenhouse Gas Reduction Fund creates the opportunity for CDCUs and CDFIs to take on more risk and bring emission-reducing and cost-effective energy products to communities that need them most.

The Act provided the Environmental Protection Agency with $27 billion for the Greenhouse Gas Reduction Fund. Through competitive grants, the fund will support financing clean energy and climate projects that reduce greenhouse gas emissions. This program will also meet the requirements of the Justice40 Initiative that 40% of the benefits are for federal investments to disadvantaged communities.

For example a 2021 study on US solar adopter patterns  shows that solar adopters tend to be higher income. In 2019, the annual median solar adopter income was about $113,000, while the overall U.S. median income was $64,000. The difference in annual income between solar adopters and the general population demonstrate that lower-income communities need equitable solar upgrade solutions.

Many USC Credit Union members have been left behind by traditional financial institutions, disproportionately impacted by climate change, and underserved due to a lack of accessibility for Hispanic and immigrant populations. These  factors highlight the need for green lending in low-income Hispanic communities.

USC Credit Union’s Preparation

“South Los Angeles in East Los Angeles are now primarily Latino communities,” says Gary Perez, CEO of USC Credit Union. “Several decades ago, the South Los Angeles area was primarily African American. So as the racial makeup changed, we had to understand more about the needs of the Latino community. We turned to Juntos Avanzamos for counsel.”

Juntos Avanzamos is a designation for credit unions committed to serving Hispanic and immigrant consumers. USC Credit Union became a designated Juntos Avanzamos CDCU  by Inclusiv, a CDCU membership organization and CDFI intermediary.

“We had to understand more about the first and second Latino generation members,” Perez says. Despite how convenient remote banking tools are, “the consensus is that these individuals prefer to bank in person. Why would these people prefer to commute to a bank? One hurdle is that they can’t access the same tools that English preferred or English native people can. So we’ve developed a new bilingual mobile banking system.”

With accessibility tailored to the Latino community and grants from the Greenhouse Gas Reduction Fund, USC Credit Union could  take more risk and loan to  members with a wider variety of financial circumstances.

The grant funding “will be used as loan loss reserves and allow us to lend to credit-challenged or income-challenged individuals who may have nontraditional sources of revenue,” Perez says. “We believe this use of IRA funds will do more for the inner city community.”

 Neda Arabshahi, Vice President of Inclusiv observed that more than financial products are necessary. “They need to be paired with technical assistance, training in how to vet contractors, build partnerships with  clean energy services and education of consumers,” Arabshahi says.

Perez and his USC Credit Union team completed the Virtual Solar Lending Professional Training and Certificate Program.  The course was developed by Inclusiv and the University of New Hampshire (UNH) Carsey School of Public Policy.

“Those who benefit most from lowering their cost of energy are those  struggling with the high cost of housing here in Southern California,” Perez says. “By providing accessible solar financing, we can  lower the energy costs for those individuals and allow them to maintain households in this expensive L.A. market.”

The Power of the Spoken Word

Words matter.  It is how we connect with each other.

Whether by blog post or biblical story,  words are how we navigate every aspect of life.

They can get stale, “decay with imprecision, will not stay in place,/Will not stay still,” as T.S. Eliot writes.

They get worn from overuse until reality brings us back to their core meaning.

Poetic usage has the potential to change how we understand meaning, transience versus transformative experience.   Here is  English writer Joesph Pearce describing poetry’s potential:

Poetry is the still, small voice of calm in a world gone mad with distraction. It finds us space to breathe. It allows us time to think. It takes us out of time and space into the realm of metaphysics. It takes us from the transient things to the permanent things, from the things of time to the things of eternity. It takes us to goodness, truth and beauty. Poetry takes us from the five physical senses to the five metaphysical senses: humility, gratitude, wonder, contemplation and dilation.

The Power of Voice

When I saw this poetry video “musical”  the power of poetry became even more dramatic.

“The forgotten dialect of the heart”






Affinity Credit Union Sues Apple, Inc.-the largest Consumer Tech Company in the World

In August 2023 Apple reported its June quarter sales of $81.8 billion and profit of $19.88 billion.  It has a market capitalization of almost $3 trillion and a price earnings ratio over 31 times.  It is the world’s largest and most powerful consumer-focused tech company.

Why would a small midwestern credit union sue over the fees Apple takes when its members use the iPhone’s pay-on-contact solution?

Jim Dean is the CEO of the 14,000 member, $147 million Des, IA Affinity Credit Union. It was chartered in 1948 to serve the workers at the local Firestone tire factory.   The credit union’s main office and plant are still within sight of each other.  The credit union is the first plaintiff on the suit.

Dean is a lifelong credit union professional and believer. He states, “This is not frivolous.   There are many reasons to feel optimistic about the outcome.  Either a win or loss will have a significant financial impact.”

Affinity was the initial, lead litigant.  Last October the complaint was amended to add GreenState, IA  and Consumers Cooperative, ILL credit unions.   “When I searched for support, many CEO’s were unaware that this pricing situation and Apple Pay exclusive to iOs devices even exists.”

Dean continues: “I learned their apathy comes from a lack of transparency from the largest EFT processors. If we don’t see this growing expense defined at the contactless transaction level, how would we know?”

The Case in Summary

The 54-page Amended Complaint was filed in October 2022 in the United States District Court for the Northern District of California against Apple, Inc.

The central issue is that Apple refuses to allow competing mobile wallets from using the iPhone contactless payment system. This allows Apple to charge fees for a service that other tap-to-pay alternatives do not charge for.

The fee applies to banks, credit unions, and other payment card issuers for use of the tap-to-pay function on the Apple Pay app.

The cost is 15 basis points on each credit card transaction and a flat fee of 0.5 cents on debit card transactions. These fees come out of the fees that merchants pay to card issuers. Apple prohibits issuers from charging them back to their customers.

By contrast, when customers use similar tap-to-pay apps (such as Google Pay, Samsung Pay and a variety of bank sponsored apps) on Android mobile devices, issuers are not charged any fees at all. In 2019, Apple charged issuers $1 billion, and those fees are predicted to reach $4 billion in 2023.

The lawsuit contends that Apple can charge those fees because it improperly does not let other payment apps (again, such as Google Pay, Samsung Pay and a variety of bank sponsored apps) have access to the Near Field Communications chip, or “NFC chip”, on its mobile devices.  This prevents other payment apps from offering a tap-to-pay service on Apple devices that would compete with Apple Pay.

The suit alleges that this violates the antitrust law.   The credit unions are seeking both damages for their class and an injunction against future anti-competitive behavior.

The goal in addition to damages is to force Apple to change its policy of prohibiting other mobile wallets from having access to the NFC chip contained in its products.

Going Forward

Apple’s motion to dismiss is still pending.  If it proceeds, there would be discovery and the drawn out legal process.  In all probability the case will go on long after Dean retires.

Apple expects to sell more than 200 million more iPhones worldwide this year and is increasing its total market share versus its rivals.

Dean believes, “Most credit unions are up in arms about Durbin, part 2 ; but these  leaders are completely in the dark about this growing expense.”

This is why starting now matters: “We are doing this because some day, people are going to wake up and realize that we have a really serious, expensive problem on our collective hands. I’m not looking for headlines, but simply trying to change what will become a massive concern when people understand the gravity of this.”

But there is also Dean’s spirit of standing up for the common member.  “Big firms pick on the weak.  And can become economic bullies in the “free market.” That’s why we have coops.”

Labor Day from Ukraine

The first day of school.  Pupils of the first grade attend a lesson in a classroom set up in a subway station in Kharkiv, on September 4, 2023. Children in Kharkiv attend classes in subway stations due to the threat of Russian shelling.

The road ahead.


“Tell all the Truth but tell it slant —”

Tell all the Truth but tell it slant —
Success in Circuit lies
Too bright for our infirm Delight
The Truth’s superb surprise

As Lightning to the Children eased
With explanation kind
The Truth must dazzle gradually
Or every man be blind —

What “People-Helping-People” Means—A Cooperative Labor Day Story

Many credit union practitioners describe their employment satisfaction by citing the credit union slogan of People Helping People.   This explanation is contrasted with the traditional business priorities of profit, market share, growth and personal financial rewards.

There are definitely credit unions whose culture and employee interactions exemplify this aspiration.  In practice however, many member interactions are straight forward: opening accounts, making loans and other service assists that mirror those of many other community financial institutions.

When a consumer or member really needs “help” the circumstances are often not pretty.   There are financial problems frequently aggravated by other issues of health, job loss or family misfortune.   “Helping” in these situations means the credit union and its staff are now becoming more involved with a member’s circumstances.  They learn about personal difficulties and must often become part of a solution.

“Helping” Starts at the Top

In a recent CEO’s monthly report to staff there is a case study of how the credit union tries to implement this oft quoted standard.

The CEO reminded staff that he puts his email address in the member’s monthly newsletter and invites them to “talk with him.” He wants to recognize their role as owners.  This also demonstrates the credit union’s vision of being their “members most trusted financial partner.”

On August 15, 2023 a member wrote to the CEO as follows (names omitted for privacy):

Dear Mr. (CEO):

I was a previous member of the credit union a few years ago and I am a current member as of 11/2019.  I’ve had some life circumstance and made some mistakes as many of us have.  I tried and I’m still working really hard to do better and to be better financially.

I’ve tried to get a loan to consolidate my debt but the only answer I get told is no.  Which is discouraging.  After adopting my niece and nephew at 19 months, who just happen to be twins, like me, I’m just trying to make ends meet.  They are now 15 years old, and like any other teenager, have their share of troubles.   I just want to be able to pay off all my bills, including the debt I owe to you, so that I can spend more family time with them without struggling. 

Thank you for taking the time to read this. God bless!

The CEO asked two staff to call the member, learn about her situation, and see what the credit union might do. Could she pay us back?  Is this where we might make a difference “one person at a time?”

On August 22, 2023, just seven days later,  the member wrote back to the CEO as follows:

Good afternoon Mr. (CEO’s name).

I just want to say thank you for trusting me.   There are no words to describe how grateful I am to you and your staff for giving me a second chance. I can breathe and enjoy my family with peace of mind. 

I failed to mention my sister is in the late stages of dementia.  I can now possibly visit before she succumbs to her illness.   Thank you again, from the bottom of my heart for lightening the financial burden I’ve been carrying.  I hope to do more business with the credit union in the future as I pay down my second chance finance with you all. 

God is good!  Have a Blessed Day.  Thank you.

A Labor of Service and Peace of Mind

The CEO explained the restructure saved the member over $450 per month in payments.  It may be years before the credit union knows the outcome of the story.   The two credit union employees did the “hard work” by investing their time and experience to find a better way for the member.  They went beyond the credit score and payment history to see who she was and her commitment to learn from prior mistakes.

All members have choices of financial services, even those in difficult situations where predator’s options are close at hand.

This credit union has almost 65,000 members, but believes in serving each member individually, one at a time. 

This is why this cooperative team and millions of others are proud to be part of organizations fulfilling the at times difficult jobs of People-Really-Helping-People.  

As this member might say this holiday weekend, may your labors in coops continue to bless for years to come.





The Greatest Credit Union Market Opportunity

I subscribe to a resource called Visual Capitalist +. The firm transforms data into  pictures and graphs that present the meaning from the numbers.

Below is an example of income distribution in the US using information from 2010.  I suspect the outcome would not be much different today.

I believe this visual illustrates where credit unions have their largest market opportunity.   If the cooperative’s goal is to serve the greatest number of members, versus the members with the greatest wealth, then 80% of Americans owning less than 7% of the country’s financial wealth should be the primary target.

This distribution  is one reason Congress created cooperative credit unions founded on self-help.

Why I’m Writing a Book

No, not me, but a kindred spirit.

Oscar Perry Abello  is the Senior Economic Justice Correspondent for Next City.  I have reprinted excerpts of his stories about startup credit unions and other community financial firms, especially CDFI’s. To find these just fill this blog’s search function with “Oscar Abello.”

In the following post he writes about withdrawing from his reporting job to write a book.

As you read his reasons, think about credit unions whenever he mentions “community banks” and their declining role in communities.  Ask whether cooperatives, in a similar manner,  are moving away from their core strengths?

His goal is to document the need for community focused financial institutions which he describes as “local fountains of money.”  Here is his “mission’ statement.


“The rumors are true.

“I’m going on book leave for the next few months. I’ll be working on a book, under contract with nonprofit publishing house Island Press, that makes a case to take back the banking system for communities. It will build on a lot of the reporting I’ve done right here for Next City’s newsletter The Bottom Line, especially over the past three years or so — quite an eventful period for the banking system, especially this year. . .

The Vital Issues or Just a Broken Record?

“Over the next few months, I’m looking forward to diving more deeply into questions like: What exactly is so different or special about a more locally-owned and locally-controlled banking system? What examples reveal how a renewed local banking system can avoid mistakes of the past and present? And what policy reforms or other changes help tilt the playing field back in favor of community banks or credit unions?

“As readers of this newsletter, you may recall one of the increasingly frequent occasions I’ve taken to mention in my reporting that there were 15,000 community banks holding 37% of banking industry assets in 1985, the year I was born.  Today there are just 4,200 community banks holding 11% of banking industry assets. If we’ve had the great fortune of sharing a conversation in person or during a webinar over these past few years, I’ve probably brought it up somehow. Sometimes I worry I’m starting to sound like a broken record about it. 

“I just haven’t been able to stop thinking about this set of facts — that there were so many community banks across this country within my own lifetime, and that we allowed so many of them to get swallowed up by bigger banks. A few years back, I came across this stunning graphic from the FDIC, showing how the four largest banks as of 2011 gobbled up a bunch of smaller banks over the decades leading up to that point.

“Maybe it’s a journalist thing. Follow the money, as they say. 

“Most of us, including most bankers, think of banking as taking deposits and lending them back out to borrowers. In some ways there is some truth to that idea, but it turns out if you follow the money all the way to its original source, 92% of money comes into existence as the result of a bank making a loan. So says a recent working paper co-authored by an economist at the Federal Reserve Bank of Philadelphia. Here’s the International Monetary Fund saying the same thing in 2016the Bank of England in 2014members of U.S. Congress in 1964, and economist Joseph Schumpeter (posthumously) in 1954.

Local “Fountains of Money”

“So think about it this way: In 1985, there were 15,000 money-creating local institutions. They were — and still are — often deeply flawed. Nearly all of them were guilty of redlining at some point in their history if not still at the time. Remember, women couldn’t open a bank account or get a loan without a husband or male relative’s signature until 1974. But even with those flaws, each community bank functioned as a local fountain of money. 

“Is today’s consolidated banking system an effective substitute for the 11,000 community banks that no longer exist? The Paycheck Protection Program debacle powerfully demonstrated the shortcomings of today’s banking system, as big banks initially struggled to reach the smaller businesses that were most urgently in need at the start of the pandemic. 

The Ongoing Need

“I don’t intend to wax too nostalgic about the community banks we’ve lost. Taking back the banking system must not look exactly as it did before. Lately there’s been another set of facts that grows larger and larger in my mind every day: Even after decades of consolidation, there are still 4,200 community banks out there. But how many community banks are also minority depository institutions, or MDIs, meaning they are owned or led by people of one or more racial minorities and primarily serve those communities? Just 122.

“Simply put, across the entire country there are 4,078 community banks serving primarily white communities, while just 122 community banks serve primarily communities of color. Of course, it’s much more likely today than it was in decades past for white-owned community banks to do business with people of color, but recent research has revealed the continued starkness of the divide.

“Banks still tend to locate their branches in neighborhoods whose residents look like their leadership or ownership, according to a joint analysisby researchers at Johns Hopkins University and the National Bankers Association, a national trade association for MDIs.

“Any effort to take back the banking system for communities has to take it back for the country we are becoming, not the country we were.

“So how many community banks do we need? I’m not sure that me or some policymaker or expert should be the one answering that question. Maybe it should be up to each community that feels ignored or frustrated with larger, distant financial institutions to take some of that money creation power for themselves and see how they do with it.

“I’ve been reporting on recent examples of communities taking that power for themselves. My hope is for this book to help the people in those and future examples to feel connected and properly informed about what’s at stake and why efforts like these are so important to the future of our cities, this country, and the planet. Look out for it in your local bookstore (tentatively) in Fall 2024.”

Oscar Perry Abello


An Opportunity for the Combined Trade Group: America’s Credit Unions.

The merger of CUNA and NAFCU proceeds apace.   The 60-day voting period by members began yesterday. Already scheduled NAFCU educational and network meetings continue. CUNA President Nussle will attend NAFCU’s Congressional Caucus in September to show a united Washington effort.

Joint transition committees have been appointed.  One initial product was a proposed dues structure. As I read the announcement, members of both organizations are expected to continue  paying the same dues  to the new organization until 2027 (three more years) following the same fee structure in place at December 2023.  It seems illogical  to pay dues for a nonexistant organization three years past its demise.

If credit unions are members of both trade groups, “Dual members are encouraged to pay membership dues for both organizations” even though NAFCU nor longer exists.  Apparently, economic efficiency is not a current goal of the merger.

An Immediate Opportunity for a Unified Effort

The merger process has been focused on the political steps necessary for member approval and  less the potential offered from a “unified voice” in DC.  Even though the political agenda may emerge down the road, there is one immediate opportunity that could demonstrate the possibilities of a combined lobbying capability.

An NCUA board position is now open as Rodney Hood’s term expired this month.  This new member’s six-year tenure should outlast the two current members.  It could extend over two presidential election-administration cycles.

For many recent appointments the expectations, even needs, of the credit union community have not been seen as a factor in the Administration’s choices.   The result is that new board members are strangers to both the Agency and the credit union system.  Think Metsger, McWatters and Hauptman.  Having prior NCUA experience as a staff or board member (Harper and Hood) may be useful, but it still does not bring an industry or coop perspective.

One longtime, now retired, CUSO CEO Randy Karnes (CU*Answers) commented during an earlier appointment cycle: “Cooperative principles make us different. When the NCUA believes that and Washington believes that, we have a stronger system.  But when nobody believes that, then it’s simply about banking regulations. I think our system’s position is weaker, and NCUA is not even thinking about their own brand.”

“Congress didn’t create the credit union charter because the nation needed “nice banks.”

In that same appointment cycle, there was a public White House petition, CO-OPS 4 Change, asking that the administration,  “choose NCUA leaders who understand cooperatives.”  And, “who recognize the shared economic value for people and communities created by the Cooperative model from the seven cooperative principles.”

Jobs for the “Boys” or for Cooperative Leadership

All NCUA appointments result from political ambitions and relationships.   That need not be inconsistent with cooperative leadership.  Earlier NCUA appointments included candidates with credit union experience such as retired and active CEO’s, state coop regulators, CUSO executives and even some with trade association connections.

Knowledge of the evolution of the credit union system and its current status can make regulatory decisions more informed and relevant. The unique structure of the NCUSIF, the potential for a fully engaged CLF, the self-interested trends in mergers, the paucity of new charters, and the continuing use of members’ savings to pay off bank shareholders are critical industry topics.

Even with experienced senior advisors, appointees without credit union knowledge easily default to Agency staff perspectives.

As the combined America’s Credit Union marches forward under a single banner, this appointment is an immediate test of its potential role.  Will the promise of enhanced influence bring forth potential nominees who have cooperative experience? Or will the person be another unknown to credit unions? Can the industry hope members’ needs will  be paramount in a proposed board member’s regulatory views?

The appointment, whenever announced, could provide vital insight about potential benefits of a united credit union voice in DC.

The March on Washington and MLK’s Speech: The Financial Metaphor

On August 28, 1963, an estimated 250,000 people gathered in the nation’s capital for the March on Washington for Jobs and Freedom — the largest civil rights gathering of its time. Today, that landmark protest is remembered for Martin Luther King, Jr.’s famous “I Have a Dream” speech.

Many can recall almost verbatim parts of the content of his “dream.”  Politicians of all beliefs, for example, use his phrase, “that one day all people will be judged not by the color of their skin, but the content of their character” to support vastly different views on affirmative action.

To Cash a Check

The dream’s words are still aspirational and inspirational.   For credit unions however, his metaphor about justice and freedom is a reminder of why coops exist.   Here are his opening words with emphasis added:

Five score years ago, a great American, in whose symbolic shadow we stand today, signed the Emancipation Proclamation. This momentous decree came as a great beacon light of hope to millions of Negro slaves who had been seared in the flames of withering injustice. It came as a joyous daybreak to end the long night of their captivity.

But 100 years later, the Negro still is not free. One hundred years later, the life of the Negro is still sadly crippled by the manacles of segregation and the chains of discrimination. One hundred years later, the Negro lives on a lonely island of poverty in the midst of a vast ocean of material prosperity. One hundred years later the Negro is still languished in the corners of American society and finds himself in exile in his own land. And so we’ve come here today to dramatize a shameful condition. In a sense we’ve come to our nation’s capital to cash a check.

When the architects of our republic wrote the magnificent words of the Constitution and the Declaration of Independence, they were signing a promissory note to which every American was to fall heir. This note was a promise that all men — yes, Black men as well as white men — would be guaranteed the unalienable rights of life, liberty and the pursuit of happiness.

It is obvious today that America has defaulted on this promissory note insofar as her citizens of color are concerned. Instead of honoring this sacred obligation, America has given the Negro people a bad check, a check which has come back marked insufficient funds.

But we refuse to believe that the bank of justice is bankrupt.

We refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation. And so we’ve come to cash this check, a check that will give us upon demand the riches of freedom and the security of justice.

Why a Financial Metaphor?

America is the world’s leading capitalist society and its wealthiest.   For many the American dream is about becoming financially well off, even wealthy.   Everyone is financially accountable for important areas of their life.

He uses this metaphor because financial services are at the heart of the American enterprise.  People know what cashing a check means.  Checks  only work if people trust that there will be sufficient funds in their account.   In using this analogy, King says all Americans were given this promissory note of freedom and justice.

Credit unions, the cooperatives founded on democratic governance, self-help and common purpose, embody a critical means for this dream of individual equality to be realized.

Financial services as King presents the metaphor are built on trust, confidence and solvency.   I believe that whenever any credit union for whatever reasons compromises these fundamental principles, the integrity of the entire system is eroded.

Whenever any person’s freedom is limited,  the entire system of justice is compromised. Freedom is not an overnight event.  Its meaning, like financial opportunity, is constantly evolving.

Since 1909, credit unions were intended to be one of the important financial options for bringing  equity for all. Especially for those “who have the least or know the least, but today pay the most for financial services in America.”

On this 60th anniversary of the March on Washington, may it remind those of us who make a living from cooperative financial services, to once again acknowledge and embrace our role in bringing Martin Luther King’s dream to reality.