Category: Co-ops in Capitalism

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The Tragedy of the Commons

In business and political analysis the term “tragedy of the commons” is used to describe situations where there is no private, only general public use, of a natural or shared resource.  The most common examples are public lands such as national parks or rivers or ocean beachfronts.  Even the air or access to sunlight in a dense city are considered open resources available to all, until someone tries to convert them for private use or control.

The following is a private-public use model that has not fared well because the public benefit, acknowledged by a  license, is overtaken by individual abuse, even theft:

Where Have Honolulu’s Bikes Gone?
Just 60% of bikes remain in Honolulu’s bike-share system, Biki. That means people often can’t find a bike, making it harder to generate revenue and trapping the system in a sort of doom spiral.

Other examples are easy to find.  Individuals with access to a shared resource act in their own short-term self-interest and ultimately deplete or take private control of a resource previously freely open to all.

The Tragedy at Work in Credit Unions

As credit unions’ “ownership” equity is held in common by all  members,  there is no individual interest  assigned.  Rather, it is a common resource that benefits all.  And like the original “commons” open grazing areas n England, this collective resource is intended for  ongoing use by future generations.

The expectation is that through civic stewardship, elected or selected for oversight, the financial and other benefits would be preserved and protected from individual taking or private control.

But when this governance or operational norms fail, then  outside private interests will seek to assert control over what was a previous public or community shared resource. The new  “owners” may even assert they will enhance the resource and its benefit for all because of their better management skills or greater resources.

A Credit Union Example

I recently read the Member Merger Meeting Notice for a credit union that urged its member-owners approve the transfer  all their individual and corporate financial resources to a credit union in another state.

The board’s recommendation described greater future capabilities and benefits if the members would approve this complete change of leadership to this credit union with no compensation or specific agreement as to what those benefits might be.  This credit union was approaching $400 million created by the loyalty and support of their local community for almost 90 years .

The members were not informed they were giving up their ability to influence their new political and regulatory circumstances.  For the surviving entity was chartered under a completely different legal jurisdiction. Or that the new leadership team’s main office was  over 150 miles away.

The Notice said the reason for not returning the member-owners their common wealth, except for future promises, was that they still had the same financial stake in the new combination.  That is, before and after the merger, the member share value would be $1.09.

Misleading the Member-Owners

So the merger Notice suggests the members-owners are not giving up any real financial value.  Except the future of  this local independent community resource of $400 million is no longer belongs to them.  The entire investment of members’ local savings and equity are now controlled by an organization which openly promotes its ambition to be a multi-state operation built on a uniform set of products and services.

The ambition to consolidate for greater scale is presented to members as in their “enlightened self-interest” instead of blatant commercialism.  The credit union model has been hijacked by those who are skillful at presenting their institutional accumulations as necessary to better serve member-owners.

The fact that the merging credit union’s leadership and board would send members such a vacuous, non-factual, open ended statement about future benefits suggests a very shallow understanding  of their duty as directors.  There was no evidence of any fiduciary review, other options considered, or due diligence of the surviving credit union, The directors just requested members approve their decision for the free transfer of ten decades of locally created wealth to a distant, unknown and unfamiliar organization.

A Doom Spiral

The tragedy of the commons has infected credit unions on multiple levels.  However, the wholesale transfer of a valuable cooperative franchise to the control of outsiders who have no history, no presence, and at most, vague intentions, is destructive for the entire system.

It undermines the faithful loyalty and support by members who shared generation’s of resources for community benefit. And it destroys the reputation of credit unions for those now at the mercy of leaders  whose institutional ambitions have no alignment with their history or local circumstances.

These events may seem benign at first.  But they are creating example after example  where the movement has allowed its own  leaders to betray their core constituents.  Selling out members is a tragic example of destroying common wealth.  More critically, it  is an example that undermines the member-owners’ trust in the movement’s democratic leadership model of accountability.

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A Special Credit Union Advantage

What makes a credit union relationship special?  Is it being a member and saying “I own it”?  Is it some aspect of value which a may be important to a member?

Many organiations use the term member when seeking consumer business. But why do members often continue to carry their  credit union’s credit card or keep an account open when they move away and take the bulk of their business elsewhere?

Sometimes it is easier to understand what matters in a relationship from seeing another life situation.

Leaving the Country

Last Sunday I received an email from an Ukrainian working for an American-Ukraine support group. The real name and city have been changed.  It read in part:

I’m back from Ukraine. . .

Next Thursday, I’m bringing my sister and niece from Ukraine to stay with us for six weeks so they can have a much-needed break from the reality they have been living in.

I also just learned that the Melynks (name changed)  did not receive the final paperwork needed to extend their humanitarian parole. Since their current status expires on July 22, they have decided that Nadia  and their three youngest children will return to Ukraine, while  Denys and their oldest son will remain here for a while to wrap up a few projects and take care of practical matters, including their house rental, car, and other commitments.

It is heartbreaking, but they do not want to remain in the United States without legal status.

Two years ago my wife and I along with a local church helped the Melnyks family settle into an apartment in Baltimore   The family had three children and a fourth on the way.  The father worked in construction in Ukraine, a skill much in demand here.  The mother was a music teacher.

Their relocation  was sponsored by a local family. Several other US  families, the  DC church and a number of Ukrainians living here helped to support their move as refugees to America.

Why Did the Family Leave?

The family could have filed appeals.  Their 18 month old is an American citizen.  I do not know how they made their decision and all the factors they considered.

But as an outsider looking at the news about America today, our national leaders attitude to immigrants, and the ever-threatening presence of ICE even with legal migrants, I suspect one factor may have been a simple human emotion.  They did not feel they belonged here.

Belonging is a sense of comfort,  a place of welcome  where we are known and an aspect  of our identity.   It is like ownership, but more deeply personal and individual.   The emotion cannot be generated via creative marketing appeals.   It is the result of experiences that cause one to feel part of an organization.

The Consequences of Belonging

When we do not feel we “belong,” we no longer attend meetings, revisit past places of residence, go to church, or even follow organizations that were once important parts of our lives.  For example schools or colleges where we invested years in learning, or with organizations where we worked for decades and may have made meaningful contributions.

Some organizations do try to retain and honor prior affiliation and relationships.  The event can be as simple as invitation to the organization’s annual meeting or holiday celebration. Sometimes this is  through reunions, newsletters to keep alumni informed or even recognizing former members for prior service.  Even when done for practical purpose such as alumni contributions, the result will depend on whether there is a sense of an enduring relationship.

But more often it is to recognize that a sense of belonging ensures the past, present and future are all vital to a community, an organization, or even a family’s sense of identity and meaning

In his many leadership roles, and especially on the national stage at NCUA, Ed Callahan make a continuing very public effort to recognize and honor those who came before him.  Sometimes in public events such as the celebration of the Federal Credit Union Act’s 50th Anniversary.  Or the simple act of attending the funeral of a nun in Youngstown, Ohio who had been a teacher while he was a student.

February 19, 1984, NCUA Chairman Ed Callahan and fellow board members welcome Catherine Filene Shouse, niece of Edward Filene, on the first day of issue for the credit union stamp. Salem, MA.

June 1984, Washington DC.  Current NCUA board members welcome back prior NCUA administrators, General Counsels and senior staff to celebrate the 50th Anniversary of the passage of the Federal Credit Union Act.  NCUA headoffice 1776 “G” Street.

Whether People Go the Extra Mile, or Leave

A sense of. belonging creates loyalty and the willingness to go the extra mile whether this be in one’s relationship with others, a volunteer commitment,  with an employer, a community or even one’s home country.

It is a vital skill that defines effective leadership, especially in a democracy.  It creates trust and mutual respect.  It is not a transactional relation that can be bought.  It is an earned outcome.

And when push comes to shove sooner or later in all our decisions about where we invest our time and resources, it will be in those situations where we feel we belong.  For this Ukrainian family at this time, America was not going to be their future homeland.

This loss is America’s. It should remind us of the many and often much less consequential  life situations where we are responsible for others feeling  that they belong.  Like being part of your credit union.

 

 

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A Most Essential Leadership Skill

In a market.full of AI, fintech and virtual innovations clamoring for testing, how does an organization cope with all the calls for these future “necessities”? What is hype?  What could be an essential component to add to a credit union’s platform?

Several years ago I taked with a successful CEO about his recent offering of crypto (bitcoin) to  members.  He said the members were asking for it.  He owned some himself.  Integrating with third party providers was straight forward. There was no risk to the credit union,  The transaction fees added another source of revenue.

The CEO was very open about his reasons.  He was one of fewer than ten credit unions then offering this member option.  Now was the time to just let the members decide.

From crypto to financing cannabis banking to marketing partnerships that save members money by spending more, the opportunities are endless for the latest game changing service or product enhancement.  Sometimes there is some member interest.  Sometimes the change is a third party rollout, wanting to test launch an offering with a known market to establish a proof of concept.

What CEO wouldn’t  want to be seen as a insightful leader versus a fast follower by peers?  Besides a lot of the traditional service culture strategies can take time, can be hard to measure and at times boring.

The Crypto Example

Paul Krugman is a Nobel Prize–winning economist recognized worldwide for his work on international trade and hisopinionson the economic issues of the day, often from a progressive point of view.

An excerpt from his cJuly 10 onversation with Dennis Kelleher:

There is no legitimate use case for crypto. They’ve had 18 years to come up with one. They keep throwing things up like “an inflation hedge” or “source of stability.” Every one of them has turned out to be baseless.

The only real use for crypto is tax evasion, money laundering, and crime. It’s the preferred mechanism of choice for global terrorists, sex traffickers, and rogue nations like North Korea and Iran.

You have to ask yourself why crypto has basically hijacked the political agenda of Washington. It’s because they followed the Sam Bankman-Fried model of buying bipartisan support by spending hundreds of millions of dollars in campaigns. And this is the astonishing thing, Paul, that people don’t know. . . .

The Critical Faculty

So how does a coop or any leader decide what to test in a era of mixed messages and uncertainty about the future?  It is a challenge as old as the parable of the seeds and the sower.

Where ever there is fertile ground both weeds and seeds will take root.  Some may try to take out the weeds, but that can be hard especially early on when the plants are just sprouting, and later when mature growth is all mixed together.  The story suggests the choice is not strictly binary– that is the proof of a plant, a new product or even an idea can be clearly  projected as either a weed or the fruit of a seed.

What is required by  a reader of the parable, or a CEO in real life is discernment.  Some appeals by  entrepreneurs  or political leadership seeking support for their agenda will be compelling and relevant. Others, not so.

The ability to distinguish the important and lasting from the temporary and unproven comes from experience.  This is the ongoing learning about one’s prior decisions and the people and process that were used.

Discernment is a lifelong challenge both for CEO’s and in life.  Because change is inevitable, it is a skill that ultimately determines one’s ability to choose not just as a CEO  but more importantly the right in one’s personal life choices.

And if the parable is representative, at times we will grow from  seeds, and at other times perhaps weeds.  The test is whether we can see  the difference.

 

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Credit Unions Using History to Prepare the Future

Following is an introduction to a video lecture by historian Timothy Snyder  titled “What is history?”  (link) 

We speak often about history, but we are careless with the past. When we choose not to know what has happened before, we are also choosing not to influence what will happen after.

If we don’t care about history, we find ourselves in an eternal present, denied any sort of imagination about the future, and nurtured on lies about a past in which we were innocent.

History does not mean these misleading tales; it means a search for knowledge, using a certain set of tools; it means a process that enriches and humanizes, one that allows us to name things by their proper names.

Implications for Credit Unions

Whether you are a student at Western CUNA Management School or elsewhere, one purpose of education  is to understand the road to the present.

These stories are vital for both individual credit union success and for creating system-wide priorities.

For example, beyond the founding stories of committed credit union organizers keeping records in a drawer at the work site, how were future decisions on FOM expansion and leadership changes made in different eras?   What part of the legacy did the credit union preserve and what no longer applied?

Understanding an organization’s past events, both successes and disappointments, provides a perspective for future options. Most major decisions involve assumptions about options-those considered and others overlooked.

How Are National System Priorities Set?

The same benefits are available at the national level for system issues such as regulatory oversight, legislative changes in statutory authority or enhancing the cooperative purpose in American society.

Rarely do we look back to learn from the past.  Regulators do not  conduct postmortems of failures preferring to move on versus evaluate where change might be needed.  For example think of  instances when NCUA has described credit union failure as due to “fraud” or “lack of board oversight” instead of asking why these multi-year deficiencies went undiscovered in exams.  Using fraud or other credit union failure excuse deflects from  regulatory accountability.

How are national legislative priorities determined?  For example, the recently branded Credit Union Board Modernization Act included  in the 21st Century Road to Housing bill, implemented without the President’s signature?

The legislation transitioned federal credit unions to a “risk-based board meeting schedule” giving well-managed institutions the flexibility to meet just six times a year (with at least one meeting per fiscal quarter) instead of the previous blanket monthly requirement.

The legislation also targeted requirements for newer/lower-rated credit unions as follows: New (“de novo”) credit unions and those with lower supervisory soundness ratings (composite or management capability ratings of 3, 4, or 5) must continue to meet at least monthly to ensure proper risk oversight. (AI)

This is modernization?   Allowing boards to meet just six times per year is based on an NCUA process that reduces examination frequency for higher rated credit unions!   How do either regulators or boards  understand the state of risk by less frequent contacts?  And when something untoward happens, the solution is to meet more often?

Do either the volunteers or the regulators believe less frequent contacts are a “modernization” step?   Looking  at the recent and past failures (Jefferson Financial, Creighton, Unilever, etc.) and the two year plus NCUA exam cycle heading into the 1980 financial crisis, suggest the real problems do not arise from too many meetings.  It is just the opposite..

This “modernization” feels like a  PR effort to  convey legislative activity rather than addressing substantive  issues of volunteer and regulatory effectiveness.  Regulatory and board oversight are management and leadership issues, not a regulatory burden to be remediated.

History suggests the potential for real congressional change happens about once a decade.  The three person board (70’s), deregulation (80’s), Member Access Act (90’s),  and the financial crisis (00’s).

There are fundamental issues about the future of cooperatives including the role of the NCUA board (or even a separate coop federal regulatory system), the rights of members, the purchase of banks, the dearth of new charters and the merger payoffs schemes fueling consolidation.

With a knowledge of the past we know there will be an opportunity for major legislative change to further coop purpose and effectiveness.  But is anyone even thinking about that plan?

Could that effort be a topic for students in the final year of their credit union educational experience?  After all, it’s their professional future they would be shaping.

 

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Do Credit Unions Have Values?

At the Western CUNA Management Scoool, students are discussing the future of credit unions.  Is the cooperative system just another financial option for Americans or does it have a different public priority from its founding  and subsequent tax exemption?

Some assert what makes credit unions different is that the system is based on values.  Some would point to the seven or eight cooperative principles as one indicator of the difference from for-profits.

But can institutions have values?   America was founded on values, especially the freedoms and rights founders asserted were enabled  by democratic rule, that is the consent of he governed.

Are Organizations People?

The Supreme Court has repeatedly ruled that organizations (such as corporations and unions) are “legal persons” and possess First Amendment free speech rights. Landmark cases like First National Bank of Boston v. Bellotti (1978) and Citizens United v. FEC (2010) established that political spending and advocacy by organizations are protected forms of free speech.

But institutional design, or legal character,  do not guarantee virtuous conduct.  Individuals are the source for corporate decision making.   All organizations need individuals to participate and in some instance, to get their future back on track.  Even credit unions.

The Challenge of Power

Calling credit unions financial service providers is not incorrect, but the issue is why we believe that is credit unions’ defining characteristic.  The challenge is not that the description is wrong, but why is it the primary focus.

People can lead credit unions but may have their outcomes  set on the wrong things.  Some believe and act as if it the size of the balance sheet along with the supposed advantages of scale are the critical factors in credit union success.   Size denotes market power and can lead to market and financial dominance.

But credit unions succeed not with conventional approaches to market conquest, but with relational power.   That is the trust and service that promotes members’ financial well being.   Trust does not come in big or small packages.  It is present or not in an organization’s action.  A lesson Rudy Hanley used to guide his tenure at Schools First for almost 30 years.

Institutions don’t have values.  People do.  The responsibility for ethics and justice lie not in some abstract organizational concept, but  directly with the individuals who design, participate in, and regulate that system.

The democratic credit union governance can be an advantage in achieving this relationship power.  For democratic participation  should  enable constant debate to restate what ethical boundaries and values should be embedded in the financial rules of the game.   Is this how your credit union acts?

Discuss with your fellow students.

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Credit Union Strategy: Back to the Future with a Live Case Study

What is credit union’s most important strategic advantage?

Is it the tax exemption?  Their superior volunteer and professional ledership? The democratic member-owner design?  Their origins and long standing member relationships?   Is it superior size and scale?  The ability to buy out their for-profit competitors in private?  Or, the classic non-answer, It depends?

At this summer”s Western CUNA Management School, there will be discussions of strategy and the advantages credit unions bring to market competition.

Here is one perspective, not directly about credit unions, but which would certainly align with  many successful credit unions’ approaches.  As you read, ask what is the prevailing narrative for credit union strategy?  Does that approach fit your credit union?

From: Next City on Economic Development Models

As journalists, we’re constantly thinking about narratives. At Next City, we’ve been grappling with the question of how narratives change, or how new ones emerge. Part of the answer is ultimately doing the work it takes to do things differently than the way they’re done in prevailing narratives.

In one prevailing narrative, economic development is about “attracting and retaining” large corporations to “create better, higher paying jobs.” Tax incentives emerge to support deals that fit the narrative. Commercial or mixed-use lots that fall into city-owned hands get placed into the hands of whichever developer can assemble the “highest and best use” business plan, meaning they can attract the highest possible paying tenants.

So much of what I’ve come across over the past 10 years at Next City has been about doing economic development differently. Community power over land, worker power over business, local power over finance. All of the different models for how those basic concepts manifest have emerged from conversations on the ground about how the prevailing economic development narrative doesn’t serve their communities. 

Talk may be cheap, but it plays a role, too. The prevailing narrative about economic development gets reinforced through regular nationwide convenings of economic development professionals, urban planners, developers, and investors where attendees are all caught up in that same narrative. And they all play a role in implementing and entrenching it further.

Last week in the Bronx, I witnessed something I’ve seen only a handful of times, though it’s becoming more frequent in recent years: More and more of the people behind these models, people who are trying to do economic development differently, are finding resources to connect and share notes across different local contexts, from coast to coast and everywhere in between. 

There’s even a term they’re using to start describing this network of hyper-local initiatives: “trans-local.”  (one credit union CEO calls these efforts networks)There’s a lot they have to learn from each other, even if they’re operating in different legals framework and funding ecosystems. Parallels are quick to emerge, like the role of certain buildings or spaces as a sort of community organizing anchor that draws community members in to start having conversations about how they can play a role in doing things differently.

 

A Case Study Illustrating the Topic of Local Economic Development vs. Transfer of Leadership?

The following are links to a current, ongoing example about two opposing credit union approaches to community economic resilience:  Stay local or transfer leadership and resources to distant, out of area organization?

Many relevant financial facts and future claims are outlined in this series of blog posts about the proposed merger of the 85 year. $4.5 billion , Sacramento SAFE Credit Union with the $29 billion BECU whose main office is in Tukwila, WA,   (links)

Read or listen to claims for the merger versus the facts of the two credit unions’ current financial performance.   Which option would you think is in the members’ best interests?   How does your decision influence your approach to strategy for your credit union?

You can post your oinion  in the comment section-or use in your final year’s class  project.

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Credit Union Schools: What Should Students Learn from History

Yesterday began the 2026 Western CUNA Management School (WCMS) two week summer session. 
WCMS is one of several industry sponsored professional education opportunities.  The curriculum is covered over three years with the two week sessions for in-person classes and social networking experiences.
The on-campus portion is on the Pomona College campus with students living in dorms.  Classes are led by college professors, industry veterans and outside experts. WCMS has evolved over its 60 years as the credit union system, financial services and the economy have all undergone significant transformation.
The purpose has remained constant as presented on its website.

Developing Leaders

Advancing
Credit Unions

WCMS’s immersive curriculum blends academic rigor with real-world application. Graduates return as strategic, confident leaders ready to innovate, solve challenges & drive results.

The Test of Education:Knowing the Right Questions to Ask

How does any organization, industry or community assess the quality of its educational programs?  Is it basic organizational  skills learned? Applying technology to recurring management issues?  Analyzing financials or applying  other business oriented courses and strategic theories to coops?

Education evolves.  Curriculum is never static.  However the strength of a credit union based course should be the ability to understand  more about the unique cooperative model.  And how its evolution for over 100 years has created the current $2.6 trillion depository based non-profit financial system.

Enhanced skills are beneficial but often insufficient to fully appreciate the cooperative legacy that has been paid forward by prior generations to today’s aspiring leaders.

For the next two weeks I will periodically pose questions or topics that I believe would stimulate important discussion about the state of the industry today.

History Matters Because Credit Union Design Is Perpetual

This month’s CUSO Magazine is presenting various aspects of credit union founding events.   A recent article in the series documents the loss of contemporary printed publications created by the leagues, industry newsletters and even regulators.  (link).  There appears to be no central repository for personal, organizational or public records for future research.

Without an examined knowledge of the movement’s several eras, it is more difficult to understand and present future cooperative contributions.  The default strategy can just become adopting  competitor’s tactics, a surefire way to lose cooperative purpose.

The Final Exam Questions for WCMS Graduation

Because history can inform both present and future potential, the following would be my first questions for WCMS’s final exam.  It assess one’s knowledge of credit union history and its relevance for today in three brief essay answers.

  1. When Filene set out to form credit unions in the US having seen examples elsewhere,  what was his “theory of change” for American society?  Why did he believe a cooperative, credit union approach, was the best option among a number of new consumer focused financial experiments at the time?  

2. Why did Filene hire Roy Bergengren?  What did he feel the nascent movement needed in  Bergengren’s skill set?  Did the two founders  have  disagreements about how to proceed?  

3. Do these founding events have echoes in today’s credit union movement?  (Theory of change, strategies/tactic for movement success, leadership skills)

When History Changed a Critical  Understanding

These questions may appear to be more liberal arts versus business skill sets.  However this is the kind of discernment students will need when encountering practical challenges today and how simlar events were addressed in the past.

For example in 1982 when NCUA Chair Ed Callahan and Bucky Sebastian were seeking to understand the history of the field of membership in the Federal Credit UnionAct, they went to Massachusetts to learn about the movement’s founding practices.  They wanted to know the background of the concept. Was it about more than a legal interoperation of the word groups?

In Filene’s home state, a cradle for the early movement, they learned that most  initial state charters included local communities along with a sponsor.  The field of membership  was meant to fit individual circumstances not force prescribed boundaries or limits  on who could become a member.

That was the basis for their bringing greater regulatory flexibility to the FOM interpretation of the FCU Act.

More exam questions later this week.

 

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How Should Coops Measure Member Wealth: The Mean or the Median?

For over a year in their quarterly Trendwatch industry uupdates, Callahans has shown long term trends using both average ratios (the mean) as well as the median for industry level performance.

The mean is the weighted average outcome for all credit unions.  Obviously this approach gives more significance to larger institutions’ trends versus smaller.  The median shows the middle number where 50% are below and 50% are above the number being tracked. Here are two examples of these  analytical outcomes:

 

Callahan’s graphs illutrate these different  ways to present data.   While overall trend lines  may look similar, there is a real difference when interpreting individual circumstance  or peer comparisons.

The Impact for Credit Unions Member Analysis

Yesterday the web site Visual Capitalist published a chart that ranked the 30 Richest Countries in the World by average wealth per capita, that is total wealth divided by population.  The second ranking presented the mean or middle total for per capita wealth.

As one might expect America ranks second in average wealth at $695K per person, behind first place Switzerland at $910K.   America’s economy has long been one of the largest in the world in total and per capita. No surprise there.   On average Americans are well off.

The second column tells a different story.   When ranking by the median, the US number is  $69K per person.  That is 50% of population has less than that amount and the other 50% more.  That number places the US in 28th position out of the 30 countries, just above Greece and Germany.

No other country of the 30  in the UBS Glpbal Wealth Report ranking for 2026 had such a radical difference between the the mean and median average wealth per person.

The US reports the widest distribution in the  wealth ownership  gap between the very wealthy and the rest of the population.

The Credit Union Implications

This is not a new finding.  But it shows the extreme difference when placed in the context of other wealthy nations. Moreover, in America this wealth distribution disparity is growing.

In credit union analysis member participation is often calculated.  The result is frequently referred to as the 80:20 rule.  That is 20% or a small number of members contribute 80% or more of loans or deposits balances. These generally better off members are a much sought after class by all financial providers because of their impact on the firm.

But is an 80:20 outcome in member relationships where the credit union model is most effective?  Has your credit union looked at the mean and median income or net worth distribution of your members? Or in the market(s) you serve? Is the marketing priority to gain more profitable, higher balance  members or grow across all income levels?

The critical question is whether credit union business models and practices are contributing to and worsening the wealth gap, or trying to improve community equity?  Does a credit union’s fee structure, loan pricing policy and savings rates favor the well-to-do?  Do the less well off pay more for loans and earn less on their smaller savings balances?

One former credit union CEO who worked tirelessly to ensure there was not a wealth bias in the coop’s practice was Jim Blaine when he led SECU NC.  With his approach the credit union became the second largest in the country.  Pricing and fees were equitable for every member.

Measuring mean and median member income could be one of the most important indicators of credit unions fulfillling the movement’s public duty justifying its tax exempt status.  Or it might indicate the constant pull and siren appeal of the greater market’s for-profit forces.

How credit union’s respond to America’s growing disparity in its  distribution  ever increasing wealth could determine the movement’s future, that is either profit or non-profit.

 

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A Story that Illustrates an Entire Credit Union’s Mission

Sometimes a simple story can portray an entire philosophy, strategy or organization’s culture. No corporate manuals, strategic plans, or even special training sessions are needed.

For example in the Bible when Jesus says his second great commandment is to love your neighbor as yourself.  His critics ask, Who is my neighbor?   Jesus then tells the story  of the Good Samaritan.  It is about a traveler attacked and robbed by thieves, and left injured  lying alone on the road.  His fellow countrymen pass by. He is helped by a stranger, who is not from his country, religious tradition or ethnic background.

The following story  is the lead in a CEO’s monthly staff update.  It is long because the event was extended.  If you knew nothing more about this credit union other than this episode, you would surmise that it is probably very successful in traditional performance measures.  It is, but that is not the primary purpose. It succeeds because of a culture that tries to fulfill the special purpose of a cooperative charter for its members and communities.

My only edits are to protect the individuals named and the credit union’s identity.  I  would call it the story of A Credit Union Good Samaritan, because as in the original, the person assisted was not even a member of the credit union.

From a Cooperative CEO

This month’s story highlights Mary, a long-time shared-branching customer supported by Rose at our Central Avenue Member Center.

Mary is associated with an out-of-state shared-branching credit union and visits our location about once a month to withdraw a small amount of money. As an older individual, she prefers managing her banking in-person and occasionally stops in for general assistance. Over time, Rose developed a strong, trusting relationship with Mary.

One afternoon, Mary arrived visibly distressed. When Rose asked how she was doing,  Mary shared that she was feeling overwhelmed. She requested her account balance and withdrawal limit, and upon hearing the details, her anxiety seemed to increase. Mary mentioned needing to make a phone call to confirm something and stepped into the lobby.

While on the phone, Rose could overhear parts of the conversation. Mary sounded frustrated and repeatedly referenced taking cash to Walmart, which immediately raised concerns. After ending the call, she returned and requested to withdraw the maximum amount allowed.

Recognizing several red flags, Rose began asking thoughtful follow-up questions. Initially, Mary was hesitant to share details, explaining that she was sending money to her granddaughter. With patience and care, Rose continued the conversation, and Mary disclosed that she had been on the phone since early that morning with someone claiming to be from “FCC Loss Prevention.” This individual told her there were suspicious charges on her account and instructed her to withdraw funds to resolve the issue.

At this point, Rose explained the warning signs of a scam and expressed concern that the situation did not seem legitimate. Although Rose could not directly access Maary’s account because she is not a our member, she encouraged Mary to contact her home credit union using an official phone number to verify the claim.  Rose explained that if there were legitimate concerns, her credit union would be able to confirm and secure the account.

Mary agreed and returned to the lobby to make the call. As the situation progressed, Rose realized Mary had never fully disconnected from the original caller. The scammer quickly adapted their story, now claiming to be from Mary’s credit union after overhearing the conversation. Rose could hear Mary  beginning to question the caller, asking how to confirm their legitimacy, while the scammer continued to pressure her to withdraw funds and go to Walmart.

Seeing Mary becoming increasingly overwhelmed, Rose stepped in. She located the official contact information for Mary’s credit union, asked a colleague to cover her station, and invited Mary into a private office so they could call together. First, Rose ensured that Mary had fully disconnected from the scammer, despite being told not to hang up.

Together, they contacted Jean’s credit union directly and confirmed there were no unauthorized transactions or issues with her account. The credit union also shared that they had seen an increase in similar fraud attempts. Fortunately, because Mary had not shared sensitive information, no further action was necessary beyond documenting the incident.

Afterward, Rose helped Mary save her credit union’s official phone number in her contacts and block the scammer’s number.  Mary expressed deep gratitude, sharing that the scammer had attempted to convince her to withdraw and send nearly $11,000. She acknowledged that without Roses intervention, she likely would have followed through.

This experience reinforces the importance of vigilance, empathy, and proactive service. Protecting individuals—whether they are members or not—requires awareness, patience, and a commitment to going above and beyond.

This is a powerful example of how our credit union lives out its mission and purpose every day. Through care and compassion, you transformed a moment of fear and confusion into one of hope, stability, dignity, and safety for someone who needed it most.

 

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A CEO’s Words: Freedom Means “How We LIved”

Evergreen Credit Union, Portland. Maine was founded in 1951 to serve the employees of the S.D. Warren paper mill in Westbrook.   Today it serves six counties in the state with a complete line of personal and business services and with multiple community partnerships.

The credit union embraces the culture and spirit of Maine in  its branding.  But  importantly with its  many  local, engaged roles with the communities where it has branches.  Although Maine’s fourth largest at $641 million at June 30, it resonates with small town intimacy.

The CEO, Jason Lindstrom is a merger refugee from Belvoir FCU just outside Washington DC.  In March 2016 the senior management and Board of Belvoir completed a merger with PenFed.   In November 2016 this former Chief Marketing Officer was chosen to lead Evergreen as CEO.

The Call of Duty

Jason recently posted his  thoughts on freedom, responsibility and legacy after a decade as the credit union’s leader.  I might describe his thoughts as the Call of Duty.  His words are a charter for anyone serving in a position of private or public responsibility for others.

I’ve spent a lot of time thinking about leadership over the years, and one thing has become clear to me.

The greatest leaders don’t ask, “What can I get?” They ask, “What can I leave behind?”

As America celebrates 250 years, I think that’s the real challenge for each of us.

The freedoms we enjoy today were paid for by people who believed their responsibility was bigger than themselves. They built, served, sacrificed, and invested in a future they might never see. That is a legacy worth honoring.

Every generation has the same opportunity.

Not just to celebrate America, but to strengthen it. To be present with our families. To serve our communities. To treat people with dignity. To lead with integrity. To leave every person, every team, and every place a little better than we found it.

History isn’t written only by the famous. It’s written by ordinary people who choose to do the right thing, day after day, even when no one is watching.

As we celebrate 250 years of this remarkable nation, I hope we are remembered not simply for what we believed, but for how we lived.

Happy Independence Day, America! 

Editor’s PS:  Before Belvoir, where  I met Jason, he was Chief Political Officer at Schools First FCU and prior, AVP Business Development for Orange County CU.

Jason also has a podcast “Pilot 2 Co-Pilot” with Antonio Neves. The theme is  Leadership isn’t a solo flight, it’s a team effort.  There are 8 episodes.  They can be found in all major podcast directories and here:  (link) (https://pilot2copilot.buzzsprout.com/)