Category: Co-ops in Capitalism

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A Graceful Transition Announcement

Few people recall the circumstances when a leader first assumed the role.  But everyone will know how the person left.  What were the motivations, the timing and most importantly, what happens to the legacy created.

CEO transitions can be moments of honor, but also introduce risks and uncertainty for staff and institutional momentum.

Recently I read the following CEO announcement of impending retirement.  It is gracious, reassuring and most importantly, carefully planned.

The words are well-chosen, a tribute to the confidence staff and CEO share with each other.  It should come as no surprise that this is one of the most successful leadership tenures by any measure, from net promoter scores, community-member  impact and financial soundness.

Most significantly, this CEO is ensuring the achievements are paid forward for the well-being of staff and future members’ children.   The transition continues  local control so that savings and loans are reinvested  into the community that supports it. Although more than doubling in size, the credit union  is still way under $1 billion.

Would all such cooperative  CEO leadership transitions have this  thoughtfulness or, in the words of the CEO, “It’s just business as usual.”

Upcoming Retirement

 

After thoughtful consideration and with both gratitude and confidence in our future, I’d like to share that I will retire from my role as Chief Executive Officer effective December 31, 2026.

 Serving this organization and working alongside each of you has been the greatest professional honor of my career. Together we have navigated change, strengthened our culture, delivered meaningful impact and value to our members and communities, and have posted our Best Year Ever for many consecutive years. I’m proud of what we have accomplished – and even more proud of the people who make this organization what it is.

 A detailed CEO succession plan was adopted by the Board of Directors last year, so know that this transition has been carefully and deliberately planned. The Board’s CEO succession plan prioritizes leadership continuity, strategic alignment, and organizational stability.

 This comprehensive plan has been developed over time, is now being executed and positions the organization for sustained success well beyond my tenure.

 The Board will communicate additional details regarding timing and leadership transitions as appropriate.

 Until then, it is very much business as usual, and I remain fully committed to my responsibilities through the end of 2026.

  I am confident in the strength of this organization, the clarity of its strategy, and the depth of its leadership. Thank you for your professionalism, dedication, trust and friendship. I look forward to continuing to work together over the coming months in our never-ending quest to provide members their  Best  Banking Experience Ever.

 

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Self-Awareness and Leadership

I heard several graduation speeches at the University of Michigan a week ago.  While the words were directed at the graduating classes, their wisdom went beyond the seniors.

One dean noted that.the four-year journey isn’t  only discovering what area of learning most interests you, but more importantly, who you want to become? What do you want to create? What are you good at? What are your values?   And his charge to the class, stay curious and become more self-aware about your life’s role, whatever that becomes.

I thought how this learning curve applies in most job responsibilities but especially leaders of organizations such as credit union CEO’s.   How many achieve this position of final organizational accountability and then stop learning?  The ascendency is itself was the goal, the payoff.

The CEO Short Timers

An example is a CEO transition failure at Cornerstone FCU which resulted in a merger in just over a year after the Chairman stepped down to become CEO.  This $110 million, community-based operation in Carlisle, PA had become a difference maker in all areas of community life under the long-term leadership of CEO David Keffer.   A transition plan and internal succession in place.  But the Chair decided he wanted the job only to discover he couldn’t handle it.  Within in a year he was reaching out to merge.

CEO’s who achieve the leadership role and stop learning about their own strengths and weaknesses will sooner or later seek a way out.  In credit unions, mergers are a preferred escape route.  Review the Vermont State Employees merger for a case in point.

What Can Be Done?

Personal ambition that overreaches a person’s abilities is not a new leadership issue. But among the many possible antidotes, I believe one idea might help open eyes as these leadership transitions occur. For ultimately these transition failures are examples of character shortcomings.

In American life, the guardians of our values are coaches, teachers, parents, religious and community leaders.  In this arena of moral examples are cooperative volunteers. Their decisions and actions set the circumstances in which leaders are selected and overseen.

If these carriers of our culture’s values fail whether it be in school, civic leadership or volunteer roles, can the organizations  succeed in their public purpose?

While the press and other sources of accountability can call out shortcomings for action, the leaders must still respond.

Living in a moment when “public service” is a grift not a calling, leadership will require an extra effort of courage and conduct,  if the best of our intentions and society’s possibilities are to be realized.   It is sometimes a lonely role, but an example never forgotten.

 

 

 

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Dollar’s Merger Claim: Merger Guidance From the Experts

Garrison Keillor of Prairie Home Companion fame, is taking his radio performance on the road around the country in one night stands.

Recently he was in Des Moines and drove across the Iowa farmscape prompting this post:

It was dramatic to drive for hundreds of miles and see no barns or silos, no windmill or grove around a farmhouse, the Grant Wood landscape of rural America, and see what corporate industrial agriculture looks like. It looks like Siberia. A place you send people as punishment.

A culture is slipping away that raised some fine self-reliant relatives of mine like my Aunt Eleanor who could handle a rifle, hitch up horses to a wagon, bake bread, plant a garden, throw a baseball, kill a chicken, sew clothing from a pattern, do basic repairs, and speak her mind in firm declarative sentences. The farm made her a strong woman and I say the world could use more like her.

Well, cultures are mortal, just as we are, and it’s a shame when the worthwhile peter out and the worst prosper, such as the culture of consultancy. Some of the stupidest managers I’ve encountered in my life now hang out their shingles as consultants prepared to advise on strategic planning and team building, who when I knew them were adept at strategic blather and creative imitation. I believe that AI will devastate their ranks and soon we’ll encounter them at drive-up windows, consulting on condiments and large vs. medium shakes.

Mortal Cultures

I found myself reflecting on the idea that cultures are mortal in this obsevation  which Keillor titled Looking Around, Not Looking Ahead as I read the following ad via a virtual credit union daily subscriber list:

Dollar Associates has successfully guided over 400 credit union mergers in their 22 years in business.  As their tagline says, “We know credit unions backwards and forward.  Especially forward.”

Mergers as a so-called growth strategy began in earnest following PenFed’s national McKinsey-like strategy of seeking mergers nation-wide in 2016.  The first big success was acquiring Fort Belvoir FCU,  a local well-entrenched competitor.  The standard gambit was promises of a better future combined with multi-year sinecures for the CEO, plus bonuses for senior management, three-year employee commitments or large separation payments to staff.  And of course, nothing for members except a bigger organization.  All details wrapped up with non-disclosure agreements including non-disparagement clauses for everyone who cashed out.

The solicitations were overt.  And PenFed’s over two dozen mergers from a post office credit union in Wisconsin to a Sperry Associates in New York did not add a single member, loan or asset to the movement.

But it changed the merger game from historical rescues of faltering credit unions in return for expanded FOM’s by regulators, into a wide-open pursuit of non-organic growth strategies.  Mergers looked easy, quick and most importantly, the continuing credit union gets paid in-free capital.  Just for taking over a business you already know how to run.

These are not market based transactions despite occasional regulatory utterances suggesting the same.  They are private deals, done in secret without any member input or notice, documented by signed “definitive agreements” and then sprung upon members. Often accompanied with a PR barrage with videos of the two CEO’s proclaiming a new promised land all executed without any member input or knowledge.

This is the merger world today.  Dollar claims to have “guided over 400 credit union mergers” which it would be fair to assume the bulk have taken place in the last decade of the movement’s merger frenzy.

Not Business Combinations But Political Events

These transfers of control of an entire credit union’s operation, net worth, facilities and its legacy franchise value are not business transactions.  The only “negotiations” involve how much the selling CEO and senior staff and sometimes board members will gain from the deal.  If there are enforceable agreements about future commitments, they are never disclosed or done so with the caveat “if conditions permit.”

While members have a say in all states except Illinois state charters which use proxy voting, the process, transparency and information for informed consent is a charade. Almost all votes are returned by mail ballot with the official Board Notice letter urging member approval—as the event has already received regulatory blessing, subject only to the member vote.

The Need for Facilitators and Go-Betweens

Because these are political events not real business transactions, facilitators are needed.  Brokers to quietly solicit candidates, test the waters and make introductions. Accountants, “strategic” consultants and lawyers to draft the private definitive agreements, Most importantly, external professional experts, such as former regulators, to assure boards, for whom this will be a singular and the final event of their tenure.

These volunteer board members need external assurance that they are doing the right thing, because it is irreversible. The so-called professionals will assist getting the necessary regulatory sign-offs-just look at our track record of 400 cases. Trust us, everybody else is doing it as well. You are in good hands.

The facilitators all take their cut of the pie, the vendors who are eliminated get cancellation fees, and staff promised greater professional opportunities. The member-owners receive nothing and lose their accumulated net worth. Most consequential is that  the legacy relationships and goodwill which built the credit union as a community resource to be paid forward for future generations is now gone.

“Looking Backwards”

Invoking Dollar’s hindsight, almost all mergers in this decade long period of private deal making have been of credit unions at least three generations old, with long serving records of meaningful community relationships and contributions.

Per Dollar’s claim, the industry now has lost 400 independent charters, their several thousand volunteer board members, and the CEO and other professional community leadership roles.  Their local and state political standing is gone.

Most importantly their function as an economic intermediary, taking the savings of local members and reinvesting back into loans for those same owners, no longer exists.  For now all these functions and responsibilities are controlled by a new board, often without any connections or knowledge and whose priorities are set following their historical ties and priorities.  The merged entity has no standing or recourse as the new brand and culture assert their sway and  operational model over the merged field of membership.

“Looking Forward”

The facilitators and apologists for this cooperative self-annihilation claim they are positioning credit unions for the future. Consolidation is inevitable, just let us show you the charts.  You need to get ahead of the game before all the “best” options (read payoffs) are gone.  Or worse, there might be a new regulatory change that would make it harder to get your cash prize payout.  Or worse, you may have to be more transparent in your intent and process.

Let’s be clear.  No one knows the future, Change is inevitable.  The current culture and political example of getting yours while you can, may indeed continue.  The animal spirits of capitalism, the drive for monopoly power may infect credit unions so thoroughly that the industry goes the way of the S&L’s.  The big go away.  The small and traditional, still around, but humble, toothless in all except a few communities and a charter neither sought by individuals or desired by the public

But change could also come in the form of a backlash–public, political or regulator.    New coop regulatory  leadership might start asking questions such as,  what is the public duty credit unions owe in return for their federal tax exemption?  What is the common good member-ownership is supposed to inspire?  Are credit unions following their own principles of governance and historical values?  Has cooperative leadership been usurped by self-interested individuals oblivious to their inherted legacy, current members’ welfare and their future generations?

The credit union system knows full well what this period of merger manipulation and self-dealing entails.  For at the same time credit unions are actively buying whole banks as part of their “external growth” strategies.   And in these events, the owners get paid out for their common equity interest and then a premium on top as credit unions can only pay cash, not stock to bank owners.

Certainly, one potential path to the future is the Dollar model.  The firm claims 400 success points to prove it can get the job done.  Cash out now, forget the past legacy, take the money and let someone else worry about the future of your members.

Will That Be With Large of Small Fries?

I may just be like Garrison Keillor surveying the loss of the family farms to the industrial agriculture industry today.   I would prefer a different, more diverse set of credit union options and leadership voices drivng the future.   But sometimes the next generation’s responsibility may be to clean up past excesses before creating something that inspires again.

 

 

 

 

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A 1982 Credit Union Leader’s Video “To All the Girls I’ve Loved Before”

I just received this video of six credit union state league Presidents recording a song in a studio.

The six state CEOs will be familiar to many CU veterans.  From left to right they are: Tony Schumacher , Gene Farley. Carroll Beach, Brad Murphy,  David Dinning and Bob Biancini. 

Note: Skip ahead to 17 seconds to begin the video.

To All the Girls

The Video’s Story (from a participant)

I thought you might get a kick out of this . The video was shot in 1982 I was at a meeting in New Orleans with a number of Credit Union League CEO’s . I do remember our gang walking from our hotel to a restaurant, “The Court of 2 Sisters” (still in business!) On our way we passed this recording facility where you could watch people making mostly silly videos.  The general consensus was, why would anyone embarrass themselves like that ?

On the way back from the restaurant after consuming about a bottle of wine each, this was the result.

The Significance of 1982 and State League Directors

The song’s lyrics might not pass muster today, but you have to admit they put on an excellent show.  But I think it tells a lot more about credit union leadership than the changing culture attitudes on relationships.

In this year of credit union history, the state league system was at its peak strength.  In some states credit unions were so numerous that there were even competing state level  organizations.

Leagues were vital pillars of the movement in this formative decade as credit union entered deregulation.  State charters were the only option until 1934.  Leagues were the driving force in the federal law pasage providing proof that credit union could be run by ordinary people.  State leagues were the vital organizers of  both federal and state charters.

At this moment there were 16 state insurance options along with the NCUSIF.  States were the incubators for change, innovation and creativity. These included activities off limits to FCU’s such as field of membership flexibility, share drafts, home mortgage loans, ATMS and  regulatory oversight and access. NCUA had become a three-person independent agency only in 1977.  The Agency was on its second chair, whereas some of these local leaders had served decades.

The state leaders founded CUNA at Estes Park.  CUNA was headquartered in Madison with a regulatory office in Washington DC.   Through ACULE these leaders coordinated legislative priorities and national leadership.  The corporate network was supported by the leagues initially with cross board membership which NCUA ultimately banned.

The system also spawned other organizational support groups with credit unions of similar fields of membership.  For example the League of IBM credit unions, Educational. Credit Union Council, the Airline Credit Union Association, and many more with like sponsors.

The results were a strong, grass roots state level system rapidly expanding their growing  role in communities in every state.  The movement’s success and the system’s support structure were closely linked and interdependent.

The Illinois Example

Leagues provided support services, education and chapters to promote local social and political interactions.  As a state supervisor from 1977 to 1981, I spoke at chapter meetings, annual meetings and worked with the league when examiners found problems. We would ask if someone from their two dozen or more field representatives might help out as we pursuded the shared the goal of a sound system.  For in 1977 there was no mandatory share insurance requirement for state charters.

Illinois had the largest number of credit unions of any state with over 1,100 active charters.  We wanted the Illinois system to be a national leader in serving Illinois residents. When the Suburban Bank Group sought a charter for  its employees, we granted the new charter. Then we hired the energetic person who organized the effort, Wanda Mallow,  to promote new charters across the state.

One of those new charters went o Baxter,  the medical services company.   The company then hired Rex Johnson who was deputy supervisof of DFI’s Chicao credit union office, to be its first CEO.

Through NASCUS, we learned  how other state supervisors in Texas, Michigan and California operated. NCUA was rarely present on the ground,

Together the League led by Dick Ensweiller and the Department recodified the Illinois Credit Union Act in 1979 introducing deregulation and flexibility for a changing financial marketplace.

The Cooperative System Today

The shape and character of the movement’s system is very different today.   Leagues have merged,  The number of credit unions has fallen from over 16,00 in 1977 to 4,300 today.   Large credit unions operate on their own, some with national ambitions in multiple states.

CUNA moved its operational leadership to DC and focused on national advocacy withdrawing from many support services often offered through the leagues.

Large credit unions dominate the industry. National issues of technology adoption, CUSO business partnerships and regulatory responsiveness  leave many smaller organizatons feeling left out or  irrelevant.  There is no system support for new charters,  In fact the opposite is happening with mergers of long serving, sound credit unions a seeming priority for leaders.

The strong capital ratios averaging over 11% and with long serving safe   franchises  have caused many credit unions to rely less and less on system support, except as an independent  business decision.  CEO turnover at both credit unions and support organizations has caused the shared efforts from the past to be just memories.  NCUA has been leaderless for over a year.  Since the 2008 financial crisis, it has strived to be “independent” of credit unions or as one board member more bluntly stated, don’t look to Washington for advice.

The critical question facing the movement is whether a support system is even necessary and if so, for what purpose.   The shadows of many of these groups still exist, but there is little to no shared sense of priority or direction.  Advocacy means protecting the status quo.

The sense of purpose and serving the common good are sometimes referenced in local planning, but rarely are part of national conversations.  At a time of increasing shortcomings in many ways and at many levels of political and business activity, credit union identity is becoming more and more market-like.  Coop leaders are playing the merger and growth games they find, rather than defining the game they want to play.

So maybe the nostalgic message of prior relationships recorded by these State League Directors is more prescient than they could have realized.  Is the system that spawned today’s credit union industry just is a nostalgic moment of an era now gone forever?

To all the girls I once caressed
And may I say I’ve held the best
For helping me to grow
I owe a lot I know
To all the girls I’ve loved before
The winds of change are always blowing
And every time I try to stay
The winds of change continue blowing
And they just carry me away

 

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A Cooperative Innovation-Solidarity Link (Part II of II)

Yesterday’s post described the growing disconnect between member-owners’ needs and credit union leadership priorities. Solidarity Link was an innovative way to close this divide.

Today’s post describes CEO McNeil’s analysis for change  and how this example might impact the movement.

The Thought Process Driving Cooperative Solutions

From conversations with CEO McNeil, I learned this program resulted from a deep concern that credit unions had departed from their cooperative roots. She believes that the essential system support structure has declined from the early years of chartering and institutional buildout. Today many credit unions believe they achieved  their present position on their own and that future visions are similarly theirs alone to determine.

Without a shared appreciation for and the influence of a cooperative system, individual coops with rich legacies of capital and assets, are able to strike out independently. Regardless of the consequences for the welfare of the whole network.

The decline of cooperative system thinking has enormous potential for everyone concerned about the sustainability of a unique  credit union financial option.  Solidarity Link is an attempt to  address this challenge.

CEO McNeil’s Description of How the Initiative Evolved

This program resulted from an analysis of how credit unions had departed from their cooperative roots, United Trades included, and how to reintroduce cooperative design as the touchstone of decisions.

Last year, about 15% of members were laid off. Others saw hours reduced or traveled across the country to stay employed. The response was Solidarity Link: a year-long commitment to use the credit union’s earnings not to maximize financial performance, but to prioritize member well-being.  Low-cost loans, small-dollar relief, and targeted resources for members going through hardship.

Financial services are dominated by provider logic. Institutions doing things for consumers. That logic runs deep, even inside credit unions. This isn’t charity or corporate philanthropy. It’s members helping members, with the credit union as the intermediary mechanism.

That framing challenges the assumption that financial success must always be the primary proof point for performance. There were questions. A break-even year wasn’t what people expected. Holding cooperative logic alongside financial logic requires intention.

United Trades is purposively acting as more than a financial institution, accepting that they are also a social institution. Community support takes many forms, and goodwill is never wasted.

 But a cooperative’s most authentic expression is not what it gives to its community from a position of strength. It is how it stands with its members inside the conditions they actually face. Responding to real circumstances with real tradeoffs. Accepting that in some years the bottom line looks different because that’s what the moment required. That’s not a departure from sound management. That’s what it means to be a cooperative.

Through April, 119 members have been helped with approximately $77,000 in total support deployed. Many aren’t asking for help yet. They want to know it’s there. Others are deepening their relationship with the credit union not because they need assistance, but because they want to support others.

 What we are observing is members who see what their coop can be. It’s their money. They don’t want to exploit each other.  Further, that the cooperative self-help value is working the way it was always meant to. ‘People Helping People’ always meant mutual responsibility.

The Takeaway for the Movement

Reinvigorating purpose requires creativity and courage.  Daring to invest up to a year’s earnings to reinvent the members’ understanding and to solidify trust is audacious.

But there is an even greater insight driving this effort.  We live at a time of uncertainty due to many external factors, events and individual circumstance.  Many are fearful about what’s next.

I believe Solidarity Link gives individuals something more precious than financial assistance. It is giving hope. “Hope is lived when it comes alive, when we go outside of ourselves and in joy and pain take part in the lives of others.”  (Theologian Jurgen Moltmann}

Hope  Is Contagious

The initiative is already creating further interest within United Trades membership and from other union locals  learning about the program. The United Trades team and sponsor are excited, engaged and challenged to identify new member-centered value.

Another lesson is the role of the leadership team.  It  is critical in developing a culture that supports this reinvention of cooperatives as both a social and financial force for good.

I believe this example could capture the imagination and interest of persons who have never joined a credit union. Or even explain  what the difference might be.  Now they can see it for themselves.

This leadership example reminds us of Albert Schweitzer’s observation: “Example is not the main thing in influencing others. It is the only thing.”

 

 

 

 

 

 

 

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A Cooperative Model Built on Solidarity (Part I of II)

How are credit unions, as cooperatives, different from other financial choices?

The difficulty from a Jim Blaine October 2016 post, Outside the Box Thinking: (link)

In the beginning ( no I was not there!); credit unions were created as cooperatives, which were to be owned and controlled by the members and managed in their best interests.

One member / one vote; a democratically elected Board; a common goal, a common purpose – the common good !

“We’re all in this together…”
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But today, some Boards and CEOs have become “more creative” in how they view their relationship with and their responsibilities to those member-owners.

Kind of an “outside the box” sorta view….

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See the problem? 

“We’re all in this together” no longer applies.

The members have become “outsiders”…. and therein lies our greatest challenge for the future!

Don’t box yourself in, 
don’t box your members out!

Has Cooperative Structure Become an Empty Suit?

Jim’s visual distinction  is critical. Increasingly credit union CEO’s and boards view the credit union institution as separate from its member-owners.  In cooperative design there are not two separate “stakeholders.”

Creating Differentiation Through a Cooperative Lens

What if your credit union’s budget for 2026 projected net earnings every month; but then management and the board agreed to distribute each month’s bottom line directly to benefit the member-owners of their community most in need?

Following is  is an example of  setting  monthly breakeven outcome so that the collective net income can be directed to assist other members through their common link, the credit union

United Trades FCU was founded in 1955 by members of Steamfitters Local 235 which is today the Local 290 of the United Association of Plumbers & Steamfitters (UA Local 290).

UA Local 290 members are the skilled tradespeople behind the region’s largest construction projects. These include  industrial facilities, hospitals, universities, and commercial buildings that define the Portland skyline. At a consumer level, they provide the heating, plumbing, and pipefitting systems that keep homes and communities running.

The credit union office is in the UA Local 290 union hall in Tualatin, Oregon. The credit union today has $56.7 million in assets serving over 4,200 members.  Many are local but members also travel to other jobs and other locals which do not have credit union access. An additional 2,200 union members maintain vacation fund accounts through the credit union, a benefit administered on behalf of UA Local 290.

The credit union staff of 10 is led by Sarah McNeil, who first joined as a filing clerk in high school. She returned after college as a Loan Officer and worked her way sarving in  nearly every staff function.

When the Great Recession hit UA Local 290 hard, with mass layoffs and members unable to pay their bills, the credit union created CU By Design.  This CUSO connected small credit unions with needs to others with spare capacity.  United Trades was able to generate income through the CUSO to offset losses and still serve  members throughout the crisis.  Sarah served as CUSO Director for a decade before returning to the credit union in 2018 to lead the Member Services team.  On January 1, 2026, she was appointed CEO.

.The union legacy and role is a central factor in how the credit union and members work in tandem. As stated on its website, United Trades FCU is your cooperative, built by members, for members.  Every dollar you save, borrow, or invest stays in skilled trades community. 

A Cooperative Innovation-Solidarity Link

When hearing about this credit union’s breakeven approach. called Solidarity Link, I reached out to learn more.  For it seemed to put members and the credit union together in Blaine’s single box.

The theme of solidarity is at the heart of union membership and the credit union’s member first priority.   The professional life of a steamfitter is uncertain. Work on large construction projects ends.  Many assignments, while full time, are temporary.  When no job requests are available locally the union members will travel to work on construction with other locals around the country.

In addition, there are the uncertainties of labor negotiations. On April 16, Local 290 members voted to authorize a strike in connection with their Master Labor Agreement negotiations. A strike authorization d is a bargaining tool that gives union leadership leverage at the table.

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The contract was settled this week. So the signs were not needed.

Solidarity is embraced by the credit union staff.  Some of the Local 290 office team, are members of OPEIU, Local 11.   No strike, but t-shirts were ready. This was the promise of credit union support had a strike occured. (link)

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The Solidarity Initiative in 2026

The program is outline on the web site. (link)The Relief Valve is a series of member options to ease financial pressure when the work cycle tightens or life changes unexpectedly. 

The Resevoir are options and tools to help members build strength during good times and prepare for what’s next in the work cycle.

All receive a free $100 travel card when going to an out of area job. Fifteen cards for a total of $1,500 have been issued through April.

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Members’ health challenges are are rising across the trades.  In step iwith Local 290, the credit union’s taff is trained to recognize mental health warning signs and connect members with right support.

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To date there have been 12 loans totally $57,000 to members in financial stress. Overall 119 members have been helped in one of seven financial options.

In April. the board approved a one-time hardship payout to all apprentice members who have been out of work for at lest 30 days (estimated at 80),  This  payment of $185 will total an estimated $15,000-from current earnings.

Details of the credit union’s performance are in its 2025 Annual Report.

In the CEO’s words: At United Trades FCU, cooperative thinking is what produced Solidarity Link.  We are both  a social and financial institution — where the Annual Report and meeting materials exist not as formalities, but as a genuine accounting to the people who own it: read more here.

Tomorrow in Part II I will share the new CEO’s logic for using cooperative principles as the standard for credit union performance. .
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How to Review a Coop’s Annual Report

in anticipation of the required Annual Meeting, most credit union publish their reports for the prior year.  Even NCUA issues a virtual document by Arpil 1 with audits and details of internal processes, albeit little about the state of the industry they were created to support.

How should these documents be evaluated?   Are they only the financial stewardship of ;members’ resources similar to any other consumer financial choices?  Or should there be an assessment of the cooperative dimension in their role with members?

I have been reviewing the 2025Annual Report and CEO presentation of a virtual Annual Meeting I wnat to attend this week.   Here are some issues I would like to see discussed by the leaders:

How did the credit union “show up” for members?
Many institutions will detail initiatives, programs, and new services deployed for members, often with large numbers.    Do these efforts read  like a series of programs or more like a cooperative working out its obligations to members in real time?
Democratic governance in practice
Were elections contested  or director  vacancies filled via board nominated candidates by those in perpetual positions of poiwer?  Uncontested elections are common in credit unions. The governance implied by the annual meeting requirement can become perfunctory.  The credit union is financially sound and service oriented, but is this enough to be a cooperative?  Has the legacy ownership structure  become merely ceremonial?
Financial philosophy
Virtually all credit unions today show stong capital positions  with an industry averge over 11%.
How have he financial metrics enhanced  member well being?  Do the numbers describe the hardship members face and  how the service culture responded?
A cooperative  financial overview would also include – here’s what went wrong, here’s what it cost, here’s what we as an institution are accountable for, here’s what the board decided. These issues are as vital to understanding the stewardship of member funds as are the normal financial metric comparisons.
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The cooperative as identity vs. the cooperative as aspiration
Annual reports will often update the founding  story while celebrating current contributions and roles in the community.  These past and current descriptions  are real, but are they more than brand positioning?  An acknowledgment that credit unions are supposed to be different in their roles with members?
Is the credit union telling what it is doing to enhance its obligations as a cooperative for members in an uneven and unequal economy?

The Bottom Line

There is no such think as the “perfect” credit union cooperative.  One of the advantages of the charter should be the diversity of approaches it empowers.
Cooperative behavior reflects the values of the people currently running the organization.  Leadership culture matters enormously.
But the integrity of cooperatives mission cannot depend on the continued presence of mission-aligned executives. That’s not a cooperative structure. That’s a benevolent institution.
The difference matters enormously when leadership turns over, when financial pressure intensifies, or when a crisis demands accountability. Or when external offers arise to transfer control. And these chalenges wil occur. They always do.
Members who have never been treated as owners forget that they ever were. And people who have forgotten they are owners don’t rise to claim what’s theirs. They simply leave, or absorb the loss, or accept what they are told, because nothing in their experience with the institution ever suggested they had the right to do otherwise.
Being a cooperative can result in a myriad of business models.  But what should be the common link is member-ownership.  Does the Annual Report reflect that fact?
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The New Credit Union Model: First Expand Members’ Economic Freedom– Then Become their Oppressor

Two evenings ago I received an email from Scott Rose.  This 25 year member of SAFE Credit Union had been prevented from speaking of his opposition to his credit union’s proposed merger with BECU.  He had informed the leaders of his intention to speak at the annual meeting.   Although the Chair recognized other members, he closed the meeting before allowing Scott to present his views even though aware of his intent.

Righteous Indignation

Scott was infuriated.  He disrupted the adjournment ploy, deeply angry and frustrated.  He had prepared a thoughtful statement presenting his views on the proposed merger’s impact on the collective future of his 245,000 fellow member-owners.

His pain was real.   It is the same deep emotion portrayed in David’s Psalm 52, The Deceitful Leader, opening stanza:

You cunning liar,  why publicize your evil need to harm the good?                         Your slanderous tongue is razor sharp honed to fulfill malicious plans;                  You love the lie and hate the truth.

Following is the statement Scott wanted to deliver at the SAFE Annual meeting before being silenced by the Chair’s abrupt termination. Judge for yourself the gravity of the issues raised.

Chairman Blumenfeld, Board Members, CEO Nabhani, fellow attendees                  (Subheads Added)

As SAFE leadership is well aware, I have made clear my opposition to this ill-conceived transaction from Day 1.  For those who do not know me, my name is Scott Rose and I have been a SAFE member for nearly 25 years. My sole interest today is to preserve SAFE Credit Union for future generations. I have no hidden agenda and no external financial interests.

A Betrayal of our Community

The Board of Directors’ decision to terminate SAFE Credit Union’s 86 year old charter is a betrayal of our community.  So is their plan to hand over all $4.4 billion in SAFE assets to Boeing Employees Credit Union.

The so-called “benefits” of this transaction, as cited earlier by Ms. Nabhani, pale in comparison to the irreparable losses that our community will endure if this deal goes through.

How can an organization seven times the size of SAFE possibly benefit our members and our communities?

Giving Away $400 Million of Member Wealth

For BECU, this deal is a gift. Free money! Who doesn’t like free? $4.4 billion in assets. $3.9 billion in member deposits!  $400 million in member equity!

Why would our directors agree to such a lopsided transaction?

I have met with Ms. Nabhani on two separate occasions for a total of nearly five hours.  During our discussions it became evident to me that SAFE leadership not only initiated and negotiated this merger in secret, but deliberately excluded any member participation.

Member opinions were not solicited, there were no surveys, and there was never any attempt to engage the membership. The sudden announcement of a merger last November caught every member by surprise.

Board ‘s Corrupt Election

What motivated our Board of Directors to pursue this deal remains a mystery to me.  But what is obvious is that this board does not represent and cannot speak for the members.

Only three of the current directors were actual SAFE members when they were nominated and elected to the board.  The other nine directors were not SAFE members in good standing, as required by SAFE bylaws, until just prior to their nominations. These actions deliberately circumvented SAFE bylaws with the clear intent to exclude actual SAFE members from participating in SAFE governance.

This fraudulent pattern of election manipulation has been occurring for more than a decade, and the current plan to terminate the SAFE Credit Union charter is a direct consequence of this corruption.

The Truth

The pending consolidation of SAFE and BECU has drawn attention at the national level. BECU is now the fifth largest credit union in the country, and will become the fourth largest after the SAFE takeover. Many experts believe that credit union acquisitions like this will invite further scrutiny by regulators and accelerate recent  congressional efforts to eliminate their tax-exempt status. But the truth is, if credit unions like BECU behave like banks, why should they be treated any differently?

Edward Filene was an entrepreneur who ran Filene’s department store from 1891 to 1928, but it was his pioneering effort to establish the credit union movement that is his most enduring achievement. Filene’s underlying philosophy was that a credit union is a member-owned cooperative that is legally and ethically obligated to act in the best interests of its members.

It is evident that SAFE leadership has chosen to disregard their fiduciary obligation to SAFE members by failing to act in their best interests.

BECU CEO’s Banking Resume

On a separate subject, during my discussions with Ms. Nabhani, I noted that Beverly Anderson, current CEO of BECU, gained all of her financial experience as a commercial bank executive at Wells Fargo and American Express. This explains why she lacks an understanding of the cooperative credit union philosophy. Her professed motto of “people helping people” is a just cover for her true goal of expanding BECU’s market dominance by engaging in the same predatory behavior she perfected as a banker.

Local Roots & Home Turf

We have many huge commercial financial institutions and these are readily available to anyone who wants them. But those of us who truly support SAFE Credit Union want a local institution with Sacramento roots. We don’t need the likes of BECU invading our home turf and shutting down our credit union.

Thank you.   (Subheads added)

What Happens Now?

This merger is a violation of every principle multiple generations invested to bring greater economic opportunity to the Sacramento community.  This transaction converts  members  into victims of the very institution they built with their eight decades loyalty. 

That is the cooperative way of always paying forward their legacy for the benefit of their children’s children

This transaction  is a heartless betrayal motivated by greed.  The CEO and Board signed a “definitive legal agreement” negotiated in secret with no member input, knowledge or involvement legally obligating this transfer of all SAFE’s resources-past, present and future.  Then SAFE’s CEO issued a press release announcing the deal as all but done and providing no transparency of anything about the process.   

There was no explanation why transferring all future operations to BECU was in members’ best interest.  Or why the half dozen or more local California credit unions who would be more logical partners to expand member value and convenience were not approached.   Nor what the CEO and board negotiated for themselves as the agents of this transfer.  

This is not the free market at work.   It is back office, private self-interested deal making to benefit insiders clothed in rhetorical promises without verifiable substance.

This is not economic freedom.  Instead the 245,000 members’ financial relationships, the 800  employees’ jobs and all local investments are being transferred to the control of a  leadership group that has no connection to, knowledge of, or  experience in the Sacramento community.  All $4.4 billion for free including $400 million member equity.  The members are not owners, just customers to be bought and sold to whomever the Board chooses.

How Much Longer?

How long must  members suffer in this current environment of private profiteering and  community plundering  of their mutual wealth and future well being?

This predatory destruction will  continue as long as  people of good will, courage and belief in cooperatives stay silent.  For human greed has no limits.  If the leaders of the movement don’t speak out, why should the public, regulators, legislators and  loyal members care?

It is time for those who believe in democratic, not autocratic leadership of credit unions, to take a stand.  Cooperative credit unions are an interdependent system.  Seemingly individual actions will affect the future of all others.

It takes only a few to change the course of events, because that is how all revolutions against misuse of authority begin.

Place Scott’s speech in the public record, with the California Legislature, in the public media, in the Congressional Record.  It is a stand made by a person of courage, principle and diligence.   It should be in every league’s newsletter and given to every state and NCUA examiner by the credit union.

For if one member of conscience and sound judgment has the fortitude and bravery to stand up, surely those who believe in the principles of the cooperative option can follow his example.  We call that democracy, a duty we all have if we want to really remain free.

 

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One CEO’s Most Vital Stewardship Attribute

The example of Boeing Employees Credit Union two recent CEO selections proves the adage that most organizations are onlly two transitions from failure.  Not just performance shortfalls, but more importantly the loss or founding purpose and the associated values and culture.

See post: When the Song Fades-Leadership Turnover and the Loss of Cooperative Identity.    (Link)

Newly installed CEO’s espeically from outside an organization assume they have been chosen to give new direction from their external experiences, often without first understanding the resources they now direct.

The failures are not due to lack of talent, skills or knowledge, but rather a more fundamental gap,   an inability to discern the foundation for the success they inherit.  That shortcoming is especially vital in democratically designed organizations such as credit unions:

In democratic organization, It turns out, in the end, there’s only one institutional factor  that actually matters: Good character. Everything else in a democratically governed system follows and relies on that simple foundation.

To put the current BECU leadership culture in perspective (link), here is a summary of the legacy that Gary Oakland created upon his retirement in 2012. From a press release by CUNA.

Gary Oakland Wins Wegner Award for Lifetime Achievement

National Credit Union Foundation to Present Four Awards on February 24, 2014MADISON, WI (September 4, 2013) — In recognition of his visionary approach to leadership and extraordinary commitment to the credit union movement, the National Credit Union Foundation (NCUF) is pleased to announce Gary Oakland, retired President/CEO of BECU in Seattle, Wash., as a winners of the 2014 Herb Wegner Memorial Award for Lifetime Achievement.

“Gary is a slam dunk as a choice to bestow the Wegner Lifetime Achievement Award,” said John Gregoire, Chair of NCUF Wegner Awards Selection Committee. “Gary’s contributions to the credit union movement were so obvious as everything he touches turns to success for the average American consumer. It’s evident in the growth of BECU, the state supervision system, dual credit union chartering, Biz Kid$, NCUF, and much more. It’s also an honor to see Gary receiving the award rather than giving one.

Tireless Supporter of the Credit Union Movement 
Over the course of his career, Oakland has supported the credit union movement in a myriad of ways. Those include serving on the board of the Credit Union National Association and as board chair for the Washington Credit Union League, the National Association of State Credit Union Supervisors (NASCUS), Filene Advisory Council and Board, and the National Credit Union Foundation. In his time as CEO of BECU, he guided the credit union to provide aid for more than a dozen low income credit unions across the country, often single-handedly locating the funds to keep his fellow members-first organizations afloat in times of hardship.

With his leadership, BECU was also able to play key roles in the founding of two low-income designate credit unions: TULIP Credit Union and Express Credit Union. Oakland also oversaw BECU’s creation of Prime Alliance (now Mortgage Cadence), a Credit Union Service Organization that provides mortgage solutions to approximately 600 credit unions.

“Until his recent retirement, [Gary] ably served as an intellectual thought leader on every important issue facing credit unions,” said Mary Martha Fortney, President and CEO of NASCUS. “Of particular note and importance are his dedication and efforts to make supplemental capital a reality for all natural person credit unions. We are seeing the result of Gary’s work on this issue today as supplemental capital in being considered on Capitol Hill.”

High-Impact Commitment to Member Value                                                           Oakland is hailed for his unfaltering dedication to improving value for the credit union member. Exemplifying the effect of this commitment, BECU grew from 108,000 members when he took on the position of CEO in 1986 to over 775,000 members at the time of his retirement in 2012.

Oakland was known for accommodating the needs of Boeing employees and providing guidance in responsible financial practices. He also led the credit union to a statewide field of membership to allow more members of the community to benefit from the credit union advantage: member-focused service with better rates and fewer fees.

While this growth trajectory could have changed the organization’s culture, Oakland held BECU true to its founding principles and the credit union philosophy of People Helping People. In 2006, BECU had an opportunity to return a portion of its reserves to its member base. He instated the Member Advantage account, which reversed the interest rate tiers, providing more return for smaller savings accounts and creating incentive to start saving at a time when U.S. savings rates were at or below 0.

“At the local level, Gary advocated for the member at every turn,” said Rae K. Miles, President of Innovative Resources, LLC. “He changed policy to help Boeing employees when they needed it most and led by example in promoted the importance of thrift to the membership. His ‘people helping people’ efforts went well beyond the membership of BECU.”

Biz Kid$ Spearhead

Among Oakland’s most influential accomplishments was the role he played in the launch of the PBS program, Biz Kid$, an award-winning financial education show for youth. Through leading the production initiative, committing $500,000 initially and $1 million over-all, bringing together a group of credit unions that raised $2.6 million per year, and ultimately making the project a possibility, Oakland has become the face associated with the show’s success.

After five seasons, Biz Kid$ has won 2 Emmy Awards and was nominated for 11 more. It claims nationwide recognition and makes a daily difference in the lives of its youth audiences.

“Had it not been for Gary’s effort, leadership, financial and personal commitment, [Biz Kid$] would never have happened,” said Rudy Hanley, President and CEO of SchoolsFirst FCU. “The result has been overwhelming. After five seasons, 13 Emmy nominations and 2 Emmy awards, the program is being delivered to millions of students through a variety of channels and participating organizations. The stature of the credit union brand has been greatly enhanced thanks to his vision and leadership.”

Steadfast Dedication to Employees

Amidst his countless other commitments and initiatives, Oakland still managed to earn the full respect and gratitude of his employees for his supportive and encouraging approach to leadership. He put his employees before himself and made concerted efforts to urge them to embrace personal and career growth opportunities. As a result of Gary’s compassion and attitude, BECU claims one of the lowest employee turnover rates in the industry and five former BECU employees are now CEOs of other credit unions.

“Gary understands that ‘People Helping People’ begins at home,” said Roger Mauldin, BECU Director. “It was always important to Gary that employees have a healthy work-life balance, be paid a fair wage, receive good benefits and know they are appreciated.”

“Man of Steel” Philanthropist

Described as a “Good Samaritan”, Oakland has left a legacy that extends the credit union philosophy well outside the credit union movement. He is known for his generosity and selflessness as well as a tendency to go above and beyond the call of duty.

In 1995, at a member’s suggestion, he led the establishment of the BECU Foundation, a chartered foundation that provides college scholarships to students who excel in academics, leadership and community service. Since its creation, the BECU Foundation has awarded more than $1.5 million to 715 students.

Oakland served on the Board of Seattle’s Neighborhood Children’s Club, helping many children get on the right track to a productive future, and has guided BECU to support a number of non-profit organizations that provide affordable housing, including Habitat for Humanity, Rebuilding Together, Impact Capital and Plymouth Housing.

“Gary has been a trailblazer and a most generous and dedicated philanthropist, both inside and outside of the credit union movement,” said Robert L. Coleman, Director of Northwest Baptist FCU. “Gary Oakland’s career was spent not only ensuring the absolute best for his membership, but also ensuring the success of those surrounding him.”

(emphasis added)

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Boeing Employees Credit Union Culture and the Proposed SAFE Merger

On April 13, CU Daily reported on a conversation that SAFE CU long time member Scott Rose had with the CEO Faye Nabhani.   The article detailed Scott’s objections and the CEO’s response on SAFE’s new merger effort.  (link)

The proposal to transfer control of the $4.4 billion SAFE and its 245,000 Sacramento area members to Boeing Employees Credit Union has had coverage in the local press (Sacramento BEE) and on blog sites.   For example this post on SECU Just Asking lists four fundamental objections to the surrender of the state charter. It poses the question whether the California CU Regulator is Asheep at the Wheel? (link)

Much information has been provided by Scott and others about what  this charter loss would cost SAFE members and the community.   Less analysis has been provided about BECU’s leadership and financial trends.  Nothing has been  in the SAFE’s press releases about BECU’s performance, leadership culture, or strategy.

Last week I wrote a post describing BECU’s high cost culture resulting in an operating expense to asset ratio of 3.33%, much higher than the large credit unions in California.  The nine BECU directors were paid an average compensation of $118,000 in 2024 with he Chair receiving $154,000.   In California, state regulation prohibits director compensation which is the federal credit union legal situation

Insiders’ Opinions on BECU’s Culture and CEO

But what was new about the situation was the almost dozen responses to the CU Daily article by readers,  They all describe a very disturbing leadership environment at BECU.

They report  situations that only employees would be aware of.   Have these issues been discussed by the SAFE board? Has there been any onsite  due diligence?   Is this a leadership culture that one would want in charge of  245,000 members’ future?

Whatever the full story might be, there is a lot more  for members to know if their future should be put in hands of the BECU board and their
CEO’s recently  arrived senior team.

11 Responses  (link)

The 18 month no layoff should be little assurance. BECU needs those employees until they get on the same system. After they do, and when the SAFE CEO leaves at 18 months, there won’t be local leadership and no one to protect the local employees and community. Since BECU’s expense issue is so severe, there will be a lot of job reductions in CA.

Performative at best.

Glad these conversations are happening and that he’s asking the right questions—he’s pushing in the way more people should.

What’s becoming clear, though, is that the credit unions don’t really have strong answers—they just have strong PR. BECU, in particular, is very good at managing perception.

Underneath that, the leadership approach feels far more like a traditional bank than a credit union. The new CEO comes across as performative at best—saying the right things publicly, but not reflecting that same philosophy behind closed doors.

Internally, employees have described leadership as political and calculated—always saying the right thing publicly, but the moment anyone questions it, they’re pushed out, fired, or laid off.

BECU isn’t new to working the layoff systems with minimal NDA’s and severance packages. Last April, several employees were let go, and shortly after, nearly identical roles were reposted and filled—often through existing networks or familiar circles. All while moving forward with a costly (millions!) and terribly structured naming rights deal.

You can’t claim credit union values while operating like that.

100% a wolf in sheep’s clothing. Just because you “meet them and they said all the right thungs” doesn’t mean they are not well coach and performative AF. What that leadership teams says in public and what they do behind thr scenes are two very different things. . .

Anonymous says:

Someone from SAFE should ask why BECU’s General Counsel, Chief Auditor, Chief Risk Officer, Chief Impact Officer, and Chief Business Officer all decided to leave, more or less at once. Nothing normal about that.

Anonymous says:

Don’t forget the ENTIRE executive team that left within months of the new CEO coming on. It’s a revolving door in the C-Suite for a reason.

Most of the employees at BECU were very excited with this hire even knowing the CEO came from Wells Fargo, she seemed to say all the right things, talk about the movement, the members first philosophy, actually we all felt a little inspired and then reality hit.

3.5 years later BECU is a shell of what it was and there is no stewardship towards the CU movement AT ALL behind closed doors, it’s 100% toxic and performative. They have pushed out so many of the employees and leaders that made that place special.

So I am so glad Faye liked her and that Bev said “all the right things” but it is shallow and performative just like others have mentioned. She is a very very good actor in public, she very much slips up behind closed doors. To having the table slammed in front of you while profanities were flying to lying about how she was “listening” to employees with “listening sessions” but behind closed doors was saying “Gotta go pretend that I care about what they say” (jaw dropping really….) to being shushed in meetings for no reason, to tearing people up because they got one thing wrong in a speech she was giving.

The executive team is no longer local to Seattle, they live in Atlanta, New York, and LA – flying in on the companies dime with no connection to the region or any care about moving the community forward. Yes, they EMT and Board are being incentivized for a merger, so they chose a “SAFE” merger (pun intended) to get their bonuses and show they increased they asset size, cause their net growth is not great.

Anonymous says:

Good someone is asking the right questions. Fact is, Bev Anderson and her cadre of big bank execs she brought on Talk the Talk but don’t Walk the Walk when it comes to credit union values. She gutted the original EMT and slowly but surely pushed every exec who challenged what new operating values and the way people are treated out the door.

As another commenter said here, she’s amazing in public but behind closed doors treats people terribly. There is a verb in use at BECU now that you’ve “been Bev’d”, and that means she cursed at you, yelled threw a tantrum and most likely in front of your peers or even subordinates. Very inappropriate. Not to mention the Wells Fargo and Equifax background, hiring of other execs who have no clue about what Coops mean and ongoing performative gymnastics. It’s sad what BECU has become over the past few years. The board should be ashamed of themselves.

Time for More Facts on the Table

Four more comments follow, several as recently as yesterday.  This is an environment that needs to be brought into the discussion more than any data or numbers or rhetorical future promises.
The facts about  BECU’s new CEO’s leadership  actions are just a prelude to what SAFE employees, leadership and members will encounter if control of SAFE is turned over to her.