Author: Chip Filson

Posted on

Asking Questions

According to Credit Union Magazine the top 1982 news story was the Penn Square Bank failure that involved more than 130 credit unions. (March 1983, pg 19)

The FDIC closing was over the 4th of July weekend.  NCUA had planned its second on-the-road board meeting for Chicago the following week.  The open board meeting was to coincide with NAFCU’s Annual convention.  For Ed, Bucky and me it was also a homecoming as Illinois was where we had been responsible for regulation of state credit union activity from 1977 until going to NCUA in late 1981.

As NCUA Chair, Ed had always held a post board meeting news conference.

This time the three of us were at the table.  The first question from a reporter was to me,  I think from Larry Blanchard. “With  all the CD exposure from investments over the $100,000 FDIC insurance, would NCUA now propose a rule limiting investments to the insured  amount?”

I had prepared for lots of “what-are-you-doing now?” kinds of questions, but not his one.  I instinctively said no.  Bucky and Ed were quick to describe how the agency would respond with both examiner on site reviews plus the CLF’s lending capacity.

Questions and Democracy

For anyone in authority, whether public or private positions, answering unscripted questions is part of the job.   It is how shareholders, the press, and interested stakeholders hold leaders accountable.

Questions are not always comfortable for the recipient.  They often challenge current happenings.  But the give and take is necessary.  They are part of a leader’s responsibility to a constituency. They help make democracy possible.

Many leaders, not in a public setting (press conference), will ignore these voices, hoping they will go away or grow tired.  Meanwhile the organization’s PR machine fills the airwaves with success stories, announcements and social media posts of positive activity.  Leaders will seek a friendly setting to put out their point of view rather than engage in a public dialogue.

Just Asking

Since February of this year, Jim Blaine the former CEO of State Employees NC has published a daily website challenging the leadership and direction of country’s second largest credit union.

Six initial questions about the credit union’s direction were posed at the 2022 Annual Meeting under new business.   The three motions requesting action  were passed by voice vote of all members.  Jim started his blog when the responses became increasingly different from the reality he was hearing from current and former employees, directors and members.

The Monday, June 26th  post describes his slow conversion to action after six years of retirement growing daffodils and chickens.  He describes his awakening as a matter of trust.

I know of no current CEO or credit union professional who openly supports Jim’s return to the fray.  Their criticisms come down to one principle:  he had his turn, now it is other’s responsibility.  Or specific defenses for the changes underway.

But this is not the Navy where when the officer of the deck takes the con, he alone is in control, unless relieved by the Captain.

Democracy is not just the careful selection of new leadership until they fill out their term and move on.  It is also a system of checks and balances on the exercise of power.   In credit unions, these checks and balances supposedly reside primarily in the board, elected by the members at every annual meeting.

However today most boards are in practice unelected.  The nomination process is controlled by incumbents.   So if a Chairman, as Jim asserts, is trying to implant a new strategic direction for the credit union, how is this plan to be presented to members for their support?

Credit union boards are not places comfortable for minority points of view.   I recall when the chair of the supervisory committee opposed the board’s vote to merge their $350 million firm, she resigned rather than make her position public. When the Chair of Cornerstone FCU overseeing the CEO selection committee nominated himself, no one objected.  Within the year this former chair, now CEO, was seeking a merger of this iconic credit union.

Credit union boards are more and more like country club elections-directors choose their friends and acquaintances to what should be a position of accountability. Marketplace competition while present, is not limiting as it is for a stock traded financial firms where performance affects price.

So when the democratic process is lacking, the one option is revolt, the public raising of questions that challenge both individual actions and direction.  For example Jim in his June 19th post asked about a $6,568,261 payment to Andrews FCU when their former CEO Jim Hayes was selected to run SECU.

The Almost 200 Credit Union Failures

NCUA’s first quarter 2023 data shows 191 fewer charters than one year earlier.   These are charter failures.  But not from the safety and soundness events most frequently believed to be the cause.  These are failures of morale.  Leaders are putting their comfort and well being ahead of responsibility to members.   One need only look at the list of mergers of sound well run credit unions with capital in double digits.

SECU’s situation is an example of leadership shortcomings, not yet a financial problem. It is a situation where democratic accountability was set aside and is now being resurrected in response.

Cooperative democracy is both a process for accountability and respect for member-owners. This public challenge  isn’t the first time this has occurred; it won’t be the last.

 

 

 

 

 

 

 

 

 

 

 

 

Posted on

Ukraine Update From the Weekend

On Sunday I heard two presentations by Dr. Ivan Rusyn, President, Ukrainian Evangelical Theological Seminary in Bucha.  The seminary sends help throughout the front lines.  Over 20 military chaplains have been killed in the war.

The country has adopted a policy that the men will not wear ties until the war is over-no politicians, no businessmen, no diplomats.   So he began wearing a priest’s collar so his vocation can be immediately identified.  “Our role is not just spiritual but to serve the whole person.”

Assistance-medical, meals, transportation- is extended to all persons regardless of any religious affiliation, a ministry he calls responding to the “unfamiliar neighbor.”

“Democracy is now a global affair.  It is tested everywhere if it fails anywhere.”

Meanwhile In Russia

Uneasy lies the head of an authoritarian government.  The Putin and Yevgeny Prigozhin relationship changes quickly.

Putin’s Fixer:

Posted on

A Big Deal: The 990’s Are Here for State Charters

Candid, the company which publishes the 990 IRS returns for non-profits, announced that it has loaded over one million returns for the filing years 2020, 2021 and 2022.  Candid includes the previous service provided by Guidestar.

Because state chartered credit unions receive their federal tax exemption from an IRS ruling, they must file this report annually with the IRS. The form is due  on the 15th day of the 5th month following the end of the organization’s taxable year. For most credit unions whose fiscal year ends in December, the Form 990 is required by May 15th of the following year.

Credit unions and other nonprofits with gross revenue  of less than $50,00 or total assets of smaller than $500,000 are not required to file.  A firm failing to file for three consecutive tax years will automatically lose its tax-exempt status.

In addition to the balance sheet and income statement, the report also contains details of financial, governance/compensation, business relationships and donations available nowhere else.  For credit unions some of this new information includes:

  • Officers and directors total compensation. All current and former key employees who earned over $100,000 must be listed in Part VII with the total number who were paid more than $100,000. Schedule J Parts I and II gives much more detail of compensation policies and benefits including first class travel, club fees and gross up to cover tax expenses.  Compensation is shown in multiple categories of benefits.
  • Political contributions and lobbying expenditures in Schedule C.
  • Statements with the number of directors, affirmations of policy oversight and questions of family relationships in Part VI.
  • Section C sets out how the 990 filing will be publicly disclosed.
  • Section B of Part VII lists the names of the five highest independent contractors paid $100,000. Examples would be PSCU, MasterCard, Fiserv, and Microsoft along with the total number of all firms paid more than $100,000.
  • Part IX shows expense details, not in the 5300 report, such as compensation by category of employee, travel and conference expenses, even taxes paid.
  • Schedule I provides a listing of grants to individuals, organizations and the total number of all such grants.

Transparency and Accountability

The 990 information is much more comprehensive than the financial data NCUA collects primarily for safety and soundness monitoring.   It tries to pull back the covers on a nonprofit’s use of funds both internally and with external parties.

The form runs almost 40 pages.   The additional schedules listed above provide greater details for the summary  information first shown.

Every member would be much better informed about their credit union’s operations and use of funds from this report versus the 5300.

There are two areas where the current process could be improved.

  1. The 990 filing is almost a year and a half old by the time the form is published. At the moment the latest filings are for the year ending 2021.
  2. There is only one form per year, so that multiple years are necessary to see trends, rather than just a single point in time disclosure.

Why This is a Big Deal

The following is from the June 15 Candid press release about the availability of this recent data:

Before the COVID-19 pandemic, Candid received comprehensive IRS 990 data about 1.5–2 years after the end of a given calendar year. But IRS extensions, process changes, and delays during the pandemic slowed this timeline to a frustrating crawl. We’ve dubbed this the data/crisis catch-22—the fact that the pandemic made up-to-date data more critical to access and yet also more difficult to come by.   

In fact, between August 2022 and April 2023, the IRS released very little 990 data at all. Because of this, we have been considering 990 data for fiscal years 2020 onward “incomplete”i; research leveraging 990 data for years 2020 and on required the caveat that data collection was ongoing.

Between May 5–18, 2023, the IRS released around a million 990 files. To put these numbers into perspective, in April 2023, Candid could only account for about 60k 990 filings for fiscal years 2021 and 2022 combined. 

Here is one link to either login or subscribe to look up information.  The basic look up is free.

Posted on

A Baby’s Cry

The following is a lightly edited story from the Imaginative Conservative on June 15, by John Horvat.

This is a shared  experience of hearing a baby’s non stop crying during the frantic period while boarding an airplane.   It shows how one person’s voice can change the outcome of an unsettling event.

Bringing out the Humanity in US

“Air travel today might be considered the triumph of individualism. It involves people in their own bubbles rushing to destinations with little human contact. . .

“This inward self-absorption turns airports and planes into sensitive places where delays can cause outbursts. The slightest disruption can give rise to nasty incidents that add to the stress of air travel.

Rare Moments of Relief

“However, something extraordinary occasionally breaks the isolation, and people come out of their worlds and communicate with others. Such rare moments give a glimpse into how interesting people can be.

“The particular incident related here is hardly extraordinary. It involved a normal boarding process with its mad rush to secure seats and overhead bin space. Each person was absorbed in finding a bubble inside the crowded economy section of the plane.

“During this routine process, something human happened that lifted everyone out of their self-concern.

A Desperate Situation

“The main character in this drama was an unassuming baby at the back of the plane. For a full ten minutes during the boarding process, the poor terrified infant could not stop crying at the top of his lungs despite the mother’s desperate attempts to calm him.

“As the time came to close the cabin door, the flight attendant in charge was worried. He had seen situations like this degenerate into unruly incidents with loud, complaining passengers. He had to make a call quickly. If the crying did not stop, the mother and child would have to leave the aircraft.

“He discussed this option openly with another flight attendant. She tried to convince him that perhaps the baby would eventually stop and asked for some time to try to calm him down. Her motherly efforts failed miserably; the baby only cried louder.

“As the two flight attendants discussed the matter, those in the section front heard the dramatic debate unfold. The passengers were silent in their isolation, wondering what would happen. Yet none dared intervene. Meanwhile, tension mounted inside the cabin as the crying and schedule clashed.

An Unlikely Rescue

“It seemed all but certain that the mother and child would be expelled as the minutes ticked by when something unexpected happened.

“About a dozen rows from the front, a voice rang out.

“Miss, give the poor baby a break! We can take it! It’s no problem.”

“That first lone voice unleashed a chorus of support from all over the plane. The cabin erupted in cries to let the baby stay. Everyone offered to put up with the crying. There was a certain joy in their offers of sacrifice.

“We can take it, don’t expel them,” said one. “If there are those in the back with problems, let them come up here where there are empty seats.”

Humanity Triumphs

“Even the most introverted person seemed to awaken and get involved in the rescue mission. . . For five short minutes, the plane was abuzz with interaction. It became interesting.

“The outpouring of support for the small child ended all vacillation. The flight attendant perceived he had the backing of the passengers. If anyone caused an incident, the unruly traveler, not the baby, would be the target of hostility.

“The cabin door was closed, and the plane pushed away from the terminal. As the aircraft positioned itself on the runway, the baby stopped crying. Peace returned to the cabin, and all returned to the isolation of their bubbles. Humanity had triumphed over the rigid mechanical rules.

Self-Interest Destroys Human Solutions

“There is a lesson in all this. The disappearance of the human element in daily interactions makes life sterile. Everything is designed to minimize human contact and lock people into mechanical processes. No one is disposed to sacrifice.

“The self-service mania ensures that people stay in their self-imposed bubbles. This isolation creates a mentality that tends to disregard and resent anyone who interferes with one’s life. It does not allow the human element to act . .” (End)

My take: A baby’s cry.  One voice spoke up.  The community’s goodwill is awakened.  That is how I understand the credit union spirit–offering “human solutions” to everyday needs.  “We can take it! It’s no problem.”

 

 

Posted on

Powerful Member Stories Show a Credit Union’s Heart and Soul

Translating the credit union difference into an effective message is hard.  When done with stories of members serving their communities, the messages can be inspiring.

Whitefish Credit Union in Whitefish, MT has created a series of imaginative, colorful, “hometown” videos of their members’ special efforts.

These personal examples would cause almost any viewer to consider  1. moving to Montana and 2. joining the credit union.

The first example features skateboarding enthusiasts in Whitefish and the people who use and support it.  A story for younger members and those forever young.

https://www.whitefishcu.com/Members-like-Whitefish-Skatepark-Association

(https://www.whitefishcu.com/Members-like-Whitefish-Skatepark-Association)

This second video is how a veteran with a military injury found his meaning in life in Plains, MT. “Life doesn’t always go in the direction we think it will go.”

(https://www.whitefishcu.com/Members-Like-David)

https://www.whitefishcu.com/Members-Like-David

This is the cooperative difference portrayed as a form of art.  The theme: What we do, pays dividends. 

Enjoy.

Posted on

Two NCUA Chairmen Report to Congress on the State of the Credit Union Industry

Following are excerpts from two NCUA chairmen on the state of the credit union system.

Both presentations came following severe economic disruption.  In one case the events included double digit inflation and unemployment levels, plus the highest short term Fed Funds rate ever-in the mid teens.

In the second,  the economy had emerged from a post covid shut down with inflation rising to 9% and a Fed once again tightening.

The two updates were in May before Congressional banking committees, but 40 years apart: 1983 and 2023.

One statement expressed confidence in credit unions, with sufficient agency capabilities and a pragmatic approach for the future.  The primary concern was including credit unions in any potential banking regulation.

The second statement suggests inevitable failures, insufficient agency resources and the desire for “parity” with any  changes to banking oversight.

The question for readers:   Two assessments 40 years apart: Which understanding of NCUA’s relationship with credit unions is most likely to enhance the movement’s future?

We know the answer to the first approach.  What will be the outcome of the second?

From May, 1983: Chairman Callahan’s testimony before the Senate Banking Committee:

The overall condition of FCU’s is “quite good” thanks to the grassroots strength of the CU movement and to the freedom CUs have been given to adjust to local market conditions, NCUA Board Chairman told the Senate Banking Committee.

The committee which is conducting oversight hearings into the conditions of the financial system was told by Callahan that “few if any changes should be made in the existing  CU operational and regulatory environment.”

Reporting on 1982 financial performance Callahan said that savings at FCUs grew by 17.2% and assets rose by 16%.  As a result, CUs increased their share of the overall consumer savings market from 4.25% to 4.5%.

“I’m pleased to report that deregulation really works,” Callahan said.  “It’s time to leave the credit union system as it is for a while and observe the results.”

The committee is considering  potential changes in the financial industry and Callahan warned against the tendency to apply these changes to CUs.   “CUs, he said, “come from a different mold.  The biggest threat to the movement is not competition, but homogenization to the financial services industry.”

(Source:  Credit Union Magazine,  June 1983, pgs 19-20)

Excerpts From: Chairman Harper’s Written Statement to the House Banking Committee, May 16, 2023:

Legislative Requests

The recent failures of Silicon Valley, Signature, and First Republic banks are a reminder of the dangers of concentration risk and the need for effective risk-management policies and practices to manage capital, interest rate risk, and liquidity risk. These fundamentals have remained true throughout all economic and regulatory cycles and have recently been areas of supervisory focus for the NCUA. Credit unions that fail to manage these core issues can and will continue to fail. . .

Accordingly, to better manage such liquidations in the future, the NCUA requests amendments to the Federal Credit Union Act to provide more flexibility to the NCUA Board to manage the Share Insurance Fund, bringing the fund’s operations more in line with those of the Deposit Insurance Fund administered by the Federal Deposit Insurance Corporation (FDIC). Likewise, as Congress considers amending federal deposit insurance requirements, the NCUA supports maintaining parity between the Share Insurance Fund and the Deposit Insurance Fund. . .

Specifically, the NCUA requests amending the Federal Credit Union Act to remove the 1.50-percent ceiling from the current statutory definition of “normal operating level,” which limits the ability of the Board to establish a higher normal operating level for the Share Insurance Fund. Congress should also remove the limitations on assessing Share Insurance Fund premiums when the equity ratio of the Share Insurance Fund is greater than 1.30 percent and if the premium charged exceeds the amount necessary to restore the equity ratio to 1.30 percent.

 

 

Posted on

A Perspective on Juneteenth

This past  week Joan and I shared varied experiences tied together by our new National Holiday, just two years old.

The events were not coordinated.  Rather they showed some of the many gifts of black Americans in our country’s ever evolving quest for democratic freedom.

A New Cantata

On Tuesday we participated in a summer sing of Adolphus Hailstork’s cantata I Will Lift Up Mine Eyes.  The third movement is based on the 23rd psalm.

A New Book

We attended a Thursday evening interview at the National Cathedral of author Jonathan Eig’s book King:  A Life.

The author believes that we have made King’s basic message too sanguine.  A gentle, romanticized  vision of  “I have dream.” Rather King sought a restructuring of America’s political and economic system.

He described King’s insights:  we can’t do everything, but we can all do something.  . .we don’t have to be perfect to make a difference. . . Progress will create a backlash . . . America does not have a deficit of resources, but of imagination. .. human progress is not inevitable; it requires the discipline of hope over cynicism. . .

Eig believes we have hallowed King and thus hollowed his message  of the fundamental change he sought.  To rediscover his vision we must  read his words, especially the last sermon he preached before his death: Remaining Awake Through a Great Revolution.

The failure to achieve his goals in his lifetime, does not diminish King’s heroism in America’s long line  of citizens fighting for human freedom.

The Legacy of Birmingham

A CSPAN recorded talk by  Paul Kix reading from his book:  You have to Be Prepared to Die before You Can Begin to Live:  Ten weeks in Birmingham, That Changed America.  It is a detailed account of the SCLC’s Project Confrontation. He provides a five point  summary of  this incredible story of the courage required to break, once and for all, the city’s segregation in 1963.  The story  is both frightening in its cruelty and uplifting in the young people’s commitment to make historical change

Excerpts: Birmingham, in those days, wasn’t so much a city as a site of domestic terror. The Klan castrated Black men. The cops raped Black women. The city’s public safety commissioner, Bull Connor, gleefully and often publicly referred to Birmingham as Bombimgham, for all the Black businesses and residences that were dynamited. CBS’s Edward R Murrow reported from Birmingham prior to King’s arrival and told his producer he hadn’t seen anything like this place since Nazi Germany. . .

In early May 1963, Bevel (SCLC’s operations head) led a campaign within the Birmingham Campaign which he called, D-Day. It was thousands of children skipping school on May 2nd and 3rd and descending on Kelly Ingram Park, across from the 16th Street Baptist Church. The objective was to get to the white-owned and white-run downtown and stage massive protests for civil rights there.

But on May 2nd and 3rd, Bull Connor and the Birmingham Police Department stood with guns and German Shepherds and fire-hoses that could tear mortar from bricks or dislodge bark from trees at a distance of 100 feet. Bevel had children march right into those guns and dogs and firehoses anyway.

The result was savage, apocalyptic, the worst thing war photographers present that day had ever seen. Children were mauled by dogs, as if the dogs were feasting on them. Children backflipped in the air from the firehoses, their clothes just disintegrating on their bodies, their hair scalped as the firehoses hissed across their skulls.

The children knew this might happen. Bevel had prepared them for it. And because they had known they would likely suffer, they did not turn their suffering into victimhood. They did not stop marching. By the dozens and then hundreds and ultimately thousands the children continued to march in early May.

A Play of America’s Conflicting Ideals

The play is August Wilson’s, Radio Golf.   The two protagonists are both successful black leaders.  One is running for mayor of Pittsburg and the other, his partner in a redevelopment in which the goal is to revitalize a worn down section of the city.  And in doing so lift himself up to a spectacular level of financial success.

Both men have a vision for their community and lives.   The drama comes is the conflict of these competing views.  This is a story of every American trying to balance economic success and social equity in  their lives.

A Sunday Sermon

Senator Raphael Warnock’s sermon at the National Cathedral drew upon the familiar words from Isiah Chapter 40.4 we all know from Handel’s Messiah:

Every valley shall be exalted, and every mountain and hill shall be made low: and the crooked shall be made straight, and the rough places plain.

He used this familiar promise to describe what he called the moral topography for America.

Equity—the leveling of the hills  and valleys to have the same playing field for all.  Equity built on  integrity- the crooked shall be made straight.   Warnock said: We cannot have a criminal justice system with the rich and guilty alongside the poor and innocent.

Democracy is the necessary check and balance on the human capacity for injustice.    His vision is one where we will be  a country where “all people shall see it together.”

The  meaning of this  June Day  is that freedom is a blessing for all. . . no matter a person’s faith, gender, race, economic status, or lived heritage.  This gift can happen when all can see it together.

A Sunday Prayer

Lest we get too narrow on the history of emancipation, the prayer of confession reminds that evil corrupts  in other forms of personal bondage.  (See Radio Golf’s message of conflicting ambitions)

A Prayer for Juneteenth from the National Cathedral:

God of freedom, you have made your faithfulness known from generation to generation.  We celebrate Juneteenth which commemorates the announcement in Texas on June 19, 1865, of the end of the Civil War and the abolition of slavery, two and a half years after the Emancipation Proclamation. 

Let us reflect on the jubilation that filled the hearts of women and men of African descent as they learned of their deliverance from the bondage of slavery, even as we mourn that the true promise of freedom has yet to be fulfilled.  We pray now for all whose lives have been traumatized  and remained threatened by the legacy of slavery and institutional racism in our country.

As people of hope, we know that the arc of history is long and that it bends towards justice.  Help us to commit to the work and ending racism by building he beloved community where all are judged not the color of their skin but by the content of their character, in Christ’s name. 

Amen

An American Spiritual Sung in the Current Quest for Freedom

From the Kiev National symphony and Chorus-Down by the Riverside.

(https://www.youtube.com/watch?v=qJCI22_GDjI&list=RDGMEMMib4QpREwENw3_jAc0YgNw&start_radio=1&rv=OxnH8hrfnJE)

 

Posted on

A Milestone, or Turning Point, from the Past

The Lead: Almost all CU savings are now insured

“More than 99% of the total savings at CUs are now insured by either NCUA or a state share insurance fund, according to the 1983 State Share Insurance Yearbook.  That translates into about $75.5 billion.

“By mid-1983, the yearbook says, only about 200 CU’s in the entire U.S. will be without share insurance.  Only 319 of the almost 20,000 CUs in operation at the end of last year were not insured.  That number will decline this year as share insurance becomes mandatory in Indiana, Nebraska, and New Jersey.   Insurance  is now required of state CUs in 44 states and Puerto Rico. 

“NCUA insurance covered  all FCUs in 1982 (11,631 active charters)  and 5,036 state CUs, while 17 state insurance plans were provided for 3,121 state CUs  in 21 states and Puerto Rico.” (Total all insured credit unions 19,788)

Source:  Credit Union Magazine, June 1983, pg. 18.

An advertisement for one of the 17 state-chartered insurance funds.

Milestone or Turning Point?

Today, the NCUSIF is an insurance monopoly for all but a few state chartered credit unions.

The  insurer has become the regulator.   NCUA leaders routinely pronounce  their number one priority-“North Star”- is to protect the fund.

The NCUSIF approval is now the biggest entry barrier for new charters.

This prioritization of insurance  has changed the focus of many credit union leaders.   Instead of a social movement designing alternatives for members’ financial needs, credit unions have become me-too financial providers.

Credit unions are now fully entitled members of America’s financial system with access to governmental and market options similar to most banks.

Some continue to prioritize member well-being and their challenges of financial equity.   Others embrace the open-ended opportunities to pursue the market ambitions of their competitors.

A number of credit union leaders and academics have interpreted the insurance requirement (primarily NCUA) as the most important factor in the evolution of the cooperative financial system-for good or otherwise.

I will look at these assessments in later blogs.

Posted on

The Fruits of the Spirit: A Credit Union’s 74th Anniversary Celebration

The cooperative spirit is a financial super-power.  It is a passion that enables even small firms to have enormous impact.  Affinity Credit Union in Des Moines, IA is example of this capability  in action.

Chartered in 1949, its annual meeting is a celebration with members even as the required business items are covered.

This year’s meeting highlighted three vital Affinity success factors enabled by this spirit:

  • Respect for the member-owner;
  • Pride in the Affinity’s legacy and mission;
  • Exceptional leadership in the board and senior management.

All Are Invited

The credit union made special efforts to draw members to their annual meeting:

  • A reminder email was sent to all on the day of the meeting: “The 2023 Affinity annual meeting is tonight. We look forward to seeing you there!”
  • The announcement in the Members’ May Newsletter by the CEO: “Thank you to all who registered to attend our Annual Membership Meeting on May 9th at the Top of the Tower Ballroom. . .you can still register to attend.”
  • The sign taped to the front door of the main office when members came to be served:

When members arrived at the meeting they were given a 10-page Annual Report that included a 14 item agenda; the board’s “promises” and biographies; committee reports; financials for 2022: and pictures describing Affinity’s role in the community.

Each Report included two raffle tickets for the post- meeting drawing for cash prizes.  To kick off the event there was a free, full buffet meal for attendees before the speeches and business began.

I talked with members who had joined as far back as 1963 and an older couple, retired from state government, who joined just two years ago.   Several families brought their children.  One member brought a date, even though she was not yet a member.

The Speakers’ Messages

Outside speakers offered different aspects of Affinity’s impact.  Michelle Bock, President of the Food Bank of Iowa, presented the challenge of food insecurity that  10% of Iowans face each year.  Affinity’s CEO Jim Dean sits on the Bank’s board.

Katie Averill, Superintendent of Iowa Credit Unions, affirmed  the strength of the Iowa system in the wake of recent, large bank failures.  Of the 80 Iowa credit unions and $33 billion in assets, 72 are state charters holding 97% of the state’s total.  The system has grown by double digits over the past five years.

Five Iowa charters are over a billion dollars in assets.  Affinity at $145 million ranks number 22.  Averill summarized Affinity’s evolution since its 1949 chartering as  USW Local 301. Her listing of regulatory actions including FOM expansions, name changes, and mergers was a tribute to the credit union’s longterm standing in the community.

The respect for owners was shown when the Chair opened the meeting, under new business, for comments from members.  Multiple questions were raised from the floor.  Some were minor–will free movie tickets be restarted?  A number were substantive about the financials–unrealized losses on investments and loss reserves for loans shown in the  Report each attendee received.  All were answered openly.

Pride in the Cooperative’s Contributions

At the check-in desk for the meeting, the credit union’s founding story was shown in a display case. A lunch pail used in the early years to collect funds and make loans during shifts at the Firestone tire plant was included with the founding story:  “Here is a resource created by workers for workers that feeds families, futures and trust.”

A brief  video testimonial of long-time member James Reasoner was shown. His financial journey recovering from near bankruptcy two decades earlier was highlighted. He was also one of four  members elected to the board that evening.

Pride  is evident in the credit union’s physical presence.  The main office is still less than a half mile from the Firestone plant.  Photos of the Firestone facility are mounted throughout offices that have been remodeled surrounded by careful landscaping.

The board’s “promises” start with employee education. Wednesday mornings are late openings to accommodate training.  Three employees who had worked over 25 years for the credit union were recognized at the meeting.  Misty is the person who helped new board member James Reasoner in the video twenty years ago.

“Enrich our communities” is another board promise. Six seniors from different high schools were awarded  scholarships to further their eduction. Here’s one.

The program included multiple examples of Affinity volunteers in action.

Leadership by the Board and CEO

Few organizations can thrive, let alone survive, without dedicated leadership.

The four board members elected this meeting have  leadership responsibilities in their professional lives.  James Reasoner’s story is told in the video link above.  Bridget Neely is the CEO of Big Brothers, Big Sisters of Central Iowa.  Cara Harris is the Administrative Coordinator of Cortiva Agriscience in Johnston, Iowa.

Webster Kranto is a small business owner who was born in Liberia. It took three years as a refugee to gain immigration to the US where he graduated from Iowa State University.  In 2019 he was appointed by the governor to a 4-year term on the Iowa Board of Corrections.

Two continuing board members have worked at the Firestone plant for 22 and 23 years.  Both are members of USW Local 301L.  The board chair Cindi Summers is the Chief HR Officer at Baker Group. She earned  a Master’s Degree in Business Leadership, as well as a B.A. in Management and A.S. for Paralegal Studies.

Christian Quijano, Vice Chair, works  in Environmental Risk Management and was board President for the Environmental Professionals of Iowa from 2012-2018.

Their leadership terms begin with an oath administered to all directors at the annual meeting.  Standing and facing the members, they commit  to “faithfully, honestly and impartially perform the duties imposed upon me. . .”

The board’s most critical role is selecting the CEO.   Jim Dean came to the credit union after a long career in multiple leadership responsibilities in Illinois.   He has implemented the credit union’s vision of “building better lives” by demonstrating that small can have a big impact: “small but mighty.” He initiated a suit against Apple Pay’s  restrictions and joined in a program to lend $10 billion to facilitate  home ownership for  minorities in Iowa.

He asked that I come to the meeting to learn about the credit union.  I saw a genuine dedication to resolving  members’ financial challenges from those still in high school to retirees.  Over 50% of the 13,786 members live in low income areas. The credit union teaches the basics of savings and borrowing so members have skills to manage in any economy.

Jim’s view of success is more than increasing the volume of financial transactions. He  united the credit union’s financial capabilities with partners to support the  community’s overall health and well being. The Iowa Food Bank is just one example of this outreach.

With the board he has instilled a timeless evolution of values and principles.  This special coop spirit can extend success forever, beyond generations lived and to be lived.  He honors the traditions that created the credit union.  He gave renewed meaning to the founders’ goal of an organization that “feeds families, futures and trust.”

Jim believes that the strongest credit union advantage is member loyalty.   This is not contingent on size, but service.  The only size criteria is to be big enough to care about members.

When a decision was made to end Saturday branch hours  because of low transaction volume, Jim called each of the members who used this service the most, to let them know of the change and other transaction options.

My Message

When speaking  to the annual meeting, I said the most precious gift each  has is our time.  This evening members gave several hours to learn about the credit union and participate in another anniversary.

My hope was that every member-attendee would expand their involvement to become owner-volunteers, sharing in the promotion, service and financial support of their credit union’s mission.

Affinity’s stability  is rooted in and led by community leaders.  These volunteers and professional staff demonstrate the potential from democratic  member ownership.  The Coop spirit enables members to serve the financial needs of others, not just one’s own.

The Importance of Leadership

Affinity is an example of what numerous other credit union leaders do to help members become who they aspire to be. Their coops invest time, energy, and resources supporting members’ ambitions and enabling personal opportunities.

Leaders take risks with decisions when they make members’ needs and dreams their own. The impact of their support and dedication is immeasurable.  For it is the members’ who are the foundation of every credit union’s resilience.

Affinity’s leaders love what they do, who they do it with and who they do it for.   Is there any higher standard for a life or a profession?

 

 

 

Posted on

Conversations: How the Best in a Good Person Lives On

Credit union stories remind us who we are and what we value.  Our shared history is sometimes best understood as a narrative strung together with anecdotes.

Joe Cugini (1930-2019) is one of the credit union community’s personal pillars on which we all stand today.  He was CEO of Westerly Community Credit union from 1959-2000.  In addition he  held leadership roles as President of the RI Credit Union League, Chair of CUNA, Presdent of the World Council and a member of the Federal Reserve’s Advisory Board.

His two-generation CEO tenure saw credit unions evolve from thousands of local startups to become the second largest depository system in the American financial marketplace.

Last week I called his wife Betty to see if there were any publications from his tenure as Chair of CUNA.  In that role he had introduced NCUA Chairman Ed Callahan at CUNA’s February GAC conference—were any records of that era left around, such as cassettes of GAC speeches?

The answer was no.  But she did share two stories that captured a time when credit unions were considered “family.”

A Dinner Before CUNA’s GAC

Betty was an active volunteer leader of the Girl Scouts of Rhode Island.  In that capacity she would attend the annual National Girl Scout Convention.  She believes the February 1982 meeting took place in Texas.

In the middle of the conference, she got a call from Joe, asking her to catch the next plane to Washington D.C. The event was an evening dinner with the new NCUA Chair Ed Callahan.  Wives were invited.  Sara Barr, wife of CUNA’s DC political affairs director Jim Barr, would meet her at the airport and take her directly to dinner-no time to change.

Betty arrived at the Iron Gate Restaurant, built within an old stable building in the heart of DC, in her Girl Scout leader’s uniform.  She only took off the sash with the scout badges.  She was seated next to Ed Callahan.

As they chatted, both learned they had been teachers–Betty in kindergarten, and Ed at  Boylan High School in Rockford, Illinois.  Ed remarked to Betty, “You welcomed them in and I said goodby to them.”

While sharing their  teaching careers, Ed related an event that occurred while principal at Boylan where his children attended. The shared concern among parents  was to make senior night a celebration that would avoid potential downsides-drinking, driving, out late after everything had closed and nowhere to go.

She said that Ed described how he approached the parents about this common worry and asked them to donate money to create a special “senior night out.”  From the donated funds he rented school buses to take all the seniors for the entire evening  to a local camp ground (it may have been a Y).  The location had food, basketball courts, a pool, and plenty of recreational options plus cabins for sleeping–just bring a sleeping bag.  Ed said all the kids were so tired by morning that  all they could do was go home and sleep.  Problems avoided-through a collaborative undertaking.

Joe’s Personal Legacy

As Betty told of her conversation with  Ed, she related one of Joe’s proudest initiatives.  During a post-Christmas holiday their children had exhausted all the local entertainment options (films, concerts, shopping for presents) and were looking for something to do the rest of the vacation.

In high school Joe had twice won the Rhode Island high school basketball championship.  As CEO of Westerly CU, he offered to sponsor a local Holiday Basketball Tournament to be a center of activity to fill this vacation activity gap.  Today the WCCU Holiday Tournament is ongoing.  Here is a current  description of the event:

This tournament was created in 1984 as a way to bring together local school communities in a competitive way to collaboratively raise funds for their sports boosters. This event has become and continues to be a community tradition. This year, WCCU welcomes back the teams from Chariho, South Kingstown, Stonington, and Westerly High Schools.

As the sole sponsor since its inception, Westerly Community Credit Union underwrites all expenses of the Holiday Basketball Tournament and as always, donates every dollar of the gate proceeds directly to the participating schools’ sports boosters. Last year each of the four participating schools received $2,000.00! To date, this tournament has raised over $258,577!

How important was this event in Joe’s mind?  The following is from his obituary: In lieu of flowers, donations in Joe’s memory may be made to the Joseph N. Cugini WCCU Holiday Basketball Tournament Fund c/o Westerly Community Credit Union – 122 Granite Street, Westerly, RI 0289.

The “Best” Lives On As  Stories Are Told

The dinner conversation and Holiday Basketball tournament are events which occurred four decades ago.  The tournament continues.   The details of Betty’s evening dialogue with Ed are recalled today, almost verbatim.

This story about Ed illustrates his special ability to create a “comfort zone” when meeting others.  Credit union events often had this feeling of “family get togethers.”

Betty and Sara still remember the evening today. As the lead actors leave the stage, these women’s stories remind us what we value in human character.

The  “best” in each of us continues through relationships.  Not just relationships dependent on professional roles, but the more special moments such as an evening meal with coop “family.”