Category: Co-ops in Capitalism

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The Ultimate Co-op Strategy to Overcome All Challenges

Worried about new fintech competitors?  Liquidity tight and interest margins narrowing? Hard to find competent, affordable staff?  Growth too slow?  Delinquency rising? CFPB and NCUA about to cap fees-reducing ROA?

There is one surefire solution to all these ill winds every credit union faces.  It is touted and practiced by CEO’s of all  credit union sizes.  Consultants are marketing their multiple processes for implementing this universal solution.

The magic formula is Merger.   And incidentally, if you are not the surviving credit union, the payoff can be even greater than keeping your regular “day job.”

As this siren song travels across the cooperative waves, two skeptics have written critiques.  One humorous and one listing what member-owners should know when asked to vote on this event.  Here are their thoughts on this all encompassing panacea being touted by credit union saviors today.

An Elder Learning Fable

A  story-metaphor  by Ancin Cooley, Principal , Synergy Credit Union Consulting and former OCC examiner.

Grandson Hey, grandma. How are you doing?

Grandma: I’m good, baby. How are you doing?

Grandson: Grandma, I was wondering… I heard you did something with the house?

Grandma: Yeah, baby, I went ahead and let the next-door neighbor merge with my house. Now we are all together in one big house.

Grandson: When did you decide to make that decision?

Grandma: Oh, baby, we decided a couple of days ago.

Grandson: The house had $500,000 in equity, Grandma. You just gave that away?

Grandma: Yup, they didn’t give me any money.

Grandson: What!?!?

Grandma: I got better cable and better air conditioning.

Grandson: Services?!?! Grandmother, with your equity, you could’ve bought cable and air conditioning. You didn’t have to give it all away.

Grandma: I know, but this nice person came over and said we’d just be better together.

Grandma: I’m happy. I can watch Judge Judy as many times as I want now.

Grandson: Who presented you with this idea?

Grandma: It was our property manager. He said the cost of keeping the house maintained was going up.

Grandson: Let me see the contract…. Grandma, the manager got $50k of your equity when you merged. That’s why he brought up the idea.

Grandma: Baby, you are blocking the TV.

What Member-Owners Should Know before Voting in a Merger

CEO  Daryl Empen of Gas and Electric Credit Union (GECU)  in Rock Island, Illinois sent comments motived by multiple merger announcements in the state.

In addition to his CEO longevity, Daryl’s entire leadership team posts their pictures and direct phone numbers on the credit union’s home page under the heading: Meet Your Credit Union.  His thoughts.

I cannot recall a merger in any industry that has led to better member service.  That’s not to say that mergers can’t bring benefits.  But more often than not, it means that consumers lose a voice and a say in things. 

Credit Unions are one of the last 100% member-owned industries.  As a member-owner, you should have a voice in your credit union, and certainly be fully informed about all of the areas below when asked to vote in a merger transaction.

The Minimum Disclosures Member-Owners Should Receive

Credit union mergers have been happening for decades.  Some forced by regulators, some  voluntary. There are a multitude of legitimate reasons.  But as I celebrate 32 years in this industry, it is still sad to see the pace of mergers pick up every year. 

When we lose our small credit unions, we are losing the heart and soul of our movement and the multiple earned legacies that make credit unions special.  No matter the size, credit unions are still member-owned, not-for-profit financial institutions.  But as we grow larger, whether organically or through mergers, members have less of a voice than at most smaller institution.  I fear that we are becoming just another industry, instead of a movement.

Eleven Areas for Disclosure

If I was a member of a credit union being merged into a larger credit union, what questions should I be asking? Merger announcements tend to use generic statements like “economies of scale, synergies, shared philosophy of member service”.  These all may be true, but are  incredibly generic and tell you nothing about specific benefits. 

Based on my experience, as both the President of a credit union, and a member-owner, here are some of those areas I would ask about.

1.Additional services.  Some credit unions cannot afford today’s technology and electronic services.  So this is a legitimate issue.  What makes the surviving credit union’s  version of your products better?

2.Operating expense ratio.  If the larger CU has a higher expense to assets ratio, that’s not a sign of economies of scale.  If the argument is the larger you are, the more efficient you are, then your operating expenses should be lower.   This is not always the case – size doesn’t always equal efficiency. 

3.Personnel. Will employees from the merging credit union be offered employment with the surviving credit union?  What will their new positions and salary be after the merger is completed?

A list of all post-merger promotions with new position and salary should be provided.

Describe the details of any retirements or severance packages because of the merger.

 4.Average Salary Expense.  This is directly tied to average operating expense, as salaries and benefits are usually the largest component of our expenses.  What are the wages of the top management?  Are they reasonable?  All state-chartered credit unions file IRS Form 990 tax return which are public and contains the salaries of the CEO and highest paid employees.  This information is should be included in the merger information, whether state or federal charter.

5.Net Worth.  It  is common that a smaller credit union will have a higher net worth or capital. If  your net worth is significantly higher than the surviving credit union, will a bonus dividend occur before the merger?  If not, why? 

6.Cost of Funds/average dividend per member.  A larger credit union should be able to pay better rates on savings products, especially if they are touting “economies of scale.”   If the larger credit union’s rates are not better, what is the benefit to you as a member?

7.Average Loan Rates.  Again, the surviving credit union should be able to charge lower  rates on their loans with better economies of scale.  If their average loan rates are higher, ask why.   

8.Member Service.  To some members, personal service is not important To others, it is THE most important item.  Does the surviving credit union have a call center?  Use ITMs not personal tellers?  How easy is it to talk with a live person?

9.Costs of the merger.  There are costs involved with any merger – paying out of the remaining terms of vendor contracts can be huge.  Communications and advertising is another cost.    Are there any bonuses or incentives being paid?  How much will the merger cost?

10.Repesentation.  Will you be represented on the new Board of Directors.  Will your credit union have a seat ?

11.The Process.  Who reached out to start the merger discussion?  Did someone research other credit unions to make sure they were finding the best fit?  If they didn’t, why not 

We find it is often the larger credit union that makes an unsolicited proposal, or uses a third party to seek merger partners.  In my 30+ years at GECU, we have never approached another credit union about merging.  They have all approached us first. I always encouraged them to research other credit unions, as they have an obligation to their membership to find the best fit and best value. 

Close

When asked to give up their long serving credit union charter with its multiple legacies of goodwill and accumulated collective wealth, members-owners should be provided specific details as to why they should approve ending their independence.   This is not happening today.  Transparency is critical for trust in a member-owned institution.

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Why the CLF Has No Interest

For over 15 years, the public-private credit union designed liquidity lender, the CLF, has had no activity.  The last major loans were to the NCUSIF for $10 million to pass through to US Central and WesCorp as part of the stabilization efforts when they were conserved by NCUA in 2009.

Liquidity Options

In April 2024 an $800 million credit union reported to the board their return on its two primary liquidity lender relationships as follows:

The FHLB declared and paid a 9.0% quarterly dividend last month.  Our capital stock value there is $1,884,000.

Corporate One FCU declared and paid a 5.75% dividend on all Perpetual Contributed Capital last month.  Our PCC there is $1,283,000. 

In contrast, the CLF reported its first quarter dividend as 4.54% which was down from 4.62% from the prior quarter.  That return is approximately 1% below the overnight rate credit unions are earning on risk free investments.

The CLF’s First Quarter Financials

At March 31, 2024 the CLF’s $895 million balance sheet was composed of $859 million in member shares and deposits and $41 million of retained earnings.  There were no loans.

The CLF’s primary assets are investments in Treasury notes ($819 million) and cash ($95 million).  At yearend the portfolio was $9.0 million underwater.  Why would a liquidity facility  ever invest longer than one year, let alone the $45 million extended beyond five years?

Moreover, the CLF has investment authority similar to FCU’s.  Why is it limiting its portfolio to just Treasury securities-generally the lowest return option in the market?  Does NCUA lack the investment expertise from staff who routinely evaluate the soundness of credit union portfolios?

The below market quarterly dividend means every credit union member is subsidizing the CLF.   The dividend decline is even more puzzling when the CLF reports adding $869,000 to retained earnings which now total over $41.1 million.

The CLF has no risk and no loans so why shouldn’t all net income be paid to its shareholders?  In the same quarter of 2023, for example, the CLF added only $3,000 electing to send all net income to shareholders.

A Vestigial Organ

The numbers show that the CLF has played no role in a year which saw record credit union borrowings and liquidity pressures from rising rates and banking failures.  CLF investments report below market returns. The dividends paid are not competitive.  That fact alone shows how detached CLF and NCUA leaders are from managing a facility that would actually serve the members who loyally fund it.

Contrary to NCUA board members’ entreaties for new Congressional legislation, the lack of credit union support for the CLF is not a statutory shortcoming. It is a management one.

Over decades the CLF has evolved to become a regulatory vestigial organ serving no purpose. As shown above, credit unions have liquidity options which they also own and which provide real value.

Isn’t it time the CLF decided to do the same?  Or at a minimum pay a competitive dividend before shareholders decide there is no reason to continue “bankrolling” a moribund facility.

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Standing on the Shoulders of Others

Recently a CEO reported on a new event for his credit union:

Earlier this month the Executive Leadership Team and the Chairman hosted the First Annual Credit Union  Alumni Breakfast with 17 retired employees and volunteers. Special thanks to key staff for their work in putting on this special event.

Today we stand on the shoulders of these employees who have come before us as they laid the solid financial, operational, and philosophical foundation upon which we are building today.

We asked each attendee to share their favorite credit union memory.  They  can be summarized simply – the PEOPLE. To a person they shared that it was the members and/or colleagues that made this the best place they have ever worked.

They shared story after story about the changes in members’ and employees’ lives, and in many cases, how these interactions changed their own lives. We know that for so many of these retirees this was not just a job, but part of who you are.  So we will continue to cultivate that community, even after you have retired. These Alumni are some of the best Ambassadors in our community.

Celebrations Create and Honor a Shared Past

Yesterday was May Day, an informal, country-wide celebratory event in England.  My daughter sent several pictures of how the Day begins with the ringing of the bells and singing by the boy’s choir from the tower of Magdalen College. Oxford.

The event commemorates not only the beginning of spring, but the common destiny we all share with nature.

Merry Makers on the way to the Tower:

Bells ringing and boy’s choir singing to bring in Spring-with 14,000 early risers.

A Visit by Louise Herring to NCUA

In Ed Callahan, Bucky Sebastian and my first year at NCUA, Sam Rizzo who was the CEO of ASI (then NDGC) made a special  effort to bring to D.C. the last living attendee from CUNA’s founding at Estes Park, Colorado in 1934.  Louise Herring spent her entire life promoting, leading and founding numerous credit unions and supporting firms (such as ASI).  She had to travel attached to an  oxygen breathing cylinder.

Her mind and commitment were as sharp as ever.  Field of membership for FCU’s was a hot button issue. Her belief was that all Americans should have credit union access.  In her memorable phrase, “Poverty is not a common bond.”

The incredible chartering and organizational efforts of her era and the passion for the movement were apparent to everyone.

Louise is just one example of the pioneers who devoted their lives to lay the foundation for credit unions today.  Her commitment was a memorable experience for everyone she saw.

Recognizing past credit union regulatory leaders was an integral aspect of Chairman Callahan’s role.  Just one example. He honored his predecessors at NCUA and in the HEW’s  Credit Union Bureau by asking them to come to D.C. to celebrate the 50th anniversary of the Federal Credit Union Act in 1984.

Earlier that year Ed presented the Agency’s highest honor, a gold medal, to recognize many whose tenures were only recorded in official reports. (see Dean Gannon’s medal award)

Current and prior federal credit union regulators, General Counsels, and Executive Directors reunite  at NCUA’s headquarters, 1776 “G” Street, Washington D. C. on the 50th anniversary of the Federal Credit union Act.

The Past Makes the Present Possible

It is always tempting to believe when one achieves a position of great responsibility, that the future begins with their arrival.  The past is gone.  Those are the achievements of others.  Now it is our turn to pivot with new beginnings.  After all who wants to just carry forward the success of others when every impulse is to put one’s own imprimatur on events?

However, without a knowledge of the past it is difficult to sustain a sense of common purpose or community with others.  Each leaders turn at the wheel becomes a unique episode.  The lessons of prior efforts are overlooked.  The successes are taken for granted, because they seem just to endure naturally.

But that is not how lives or even organizations are remembered.  When individuals are at their best, their work and example transform the moment.   There is a moral component that recognizes the worth of each person, and a commitment to common good, not merely individual or organizational momentary success.

Every society has its May Day celebrations.  They create a shared heritage that goes back generations in England.

Current leaders and CEO’s of organizations may not know or even be interested in their predecessor’s  success or viewpoints.  The past leadership is gone and I am now in charge.  Some CEO’s are uncomfortable even talking with their forebears.

Knowing the history of any organization is vital to continued relevance. That is why I believe this credit union’s inaugural Alumni breakfast matters.  Honoring leaders from different eras and circumstances, gives meaning and context to current events and decisions. How a leader remembers their predecessors is a good indicator of how one’s own tenure is likely to be recalled.

 

 

 

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What Should the Role of TDECU Member-Owners Be In a Major Bank Purchase?

Yesterday the $4.7 billion TDECU announced its intention to purchase the $1.2 billion Sabine State Bank and Trust whose head office is in Many, LA

The joint press release  states:  Founded in 1901, Sabine has a footprint of 51 branches across Louisiana and east Texas and had approximately $1.2 billion in assets as of March 31, 2024. Sabine is an active lender in its markets and specializes in lending to the oil and gas, forestry, timber and agriculture sectors.

The CU Today article quotes TDECU’s CEO’s ratiionale for the purchase as: “TDECU is on a growth journey to expand across the state of Texas and beyond.”

The transaction is for cash. No financial details except broad asset totals were given.

The size of this $1.2 billion transaction (25% of TDECU’s balance sheet) the probable cash outlay of several hundred million if the price is in the 1.5 to2.0 times book value, and the operational/business expansion (51 more branches added with the 34 already),  plus new risk exposure to commercial lending raise critical questions:  What is the members’ role in this $1.2 billion purchase?  What should board and senior management be informing them about an action that could transfers as much as 50% of TDECU’s $465 million of collective savings to the bank’s owners?

TDECU’s Performance

TDECU’s 2023 yearend performance shows slightly  negative loan (-2.19%) and share growth (-2.55%). External borrowings total $310 million, a 14% increase over 2022. The credit union’s loan to share ratio has hovered around 100% for the past several years.   Delinquency is at 1.59%, ROA is .70% and net worth 10.06%.  Steady but not superior performance.

The credit union reports 386,000 total members out of a potential of 30 million.

What is the Members’ Role?

TDECU held its annual members meeting on March 23.  Was the CEO’s ambition of embarking on “a growth journey in Texas and beyond?” outlined there.  Or, were members not informed about board and management’s efforts to commit a significant portion of their net worth to a bank purchase?

The members are the owners. It is their collective savings accumulated over decades that has provided the ability to consider such an acquisition.  But what is in it for them?  What will be the return on their equity as TDECU’s ROE historically is in single digits?  How will this out-of-market expansion better serve their needs?  How will the “cash” be raised–will the credit union have to increase expensive external borrowings or seek subordinated debt to complete this transaction?

Putting TDECU’s Future on the Line

The financial size and business scope of this transaction puts the future of TDECU on the line. Members should be given full financial details including how large the intangible Goodwill asset created by the event will be.

Without full disclosure, the customary process in public bank to bank transactions, the members are left in the dark.  Management is not being held to any performance outcomes.  The traditional member-focused core service model is being put at risk to underwrite an expansion that has yet to be explained in any relevant detail.

Presumably full financial projections are being presented to the regulators who must approve this deal.  Shouldn’t the member-owners who are bankrolling this transaction be given the same details?

This transaction is not just a financial event; it is an obligation for TDECU’s board and senior management to be fully responsive to THEIR owners’ interests in this most consequential step.

 

 

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“Climbing Ladders to Nowhere”

A reader sent the following after reading Ed Callahan’s last interview as Chairman of NCUA. In that conversation he focused on the relationships between the agency and credit unions.

Hey Chip – I am just reading this.  My husband and I were camping in the wilds of Utah with very sketchy service.  In the “old days” it truly was a partnership with the Agency. 

Being a CEO my entire career, I was always highly engaged with the Examiners when they were in my credit union.  It was always a very positive relationship where we learned from each other.  Unfortunately, it devolved over the years into an “I GOTCHA” encounter. . .

Losing Our Heart and Soul

Greetings Chip!  I continue to read your blog . . .  After the latest news about more Illinois credit unions merging, I finally felt compelled to write down my thoughts on this issue.

I will publish his thoughts in the future.  These are his opening paragraphs:

Credit union mergers have been happening for decades.  Some are forced by the regulators, some are voluntary, and there are a multitude of legitimate reasons.  But as I celebrate 32 years in this industry, it is still sad to see the number of credit unions that disappear every single year, and to see the pace of mergers pick up every year.  When we lose our small credit unions, we are losing the heart and soul of our movement that makes credit unions special.  

I know that no matter the size, credit unions are still member-owned, not-for-profit financial institutions.  But it is difficult to argue with the fact that as we grow larger, whether organically or through mergers, that members have less of a voice. . .  And I fear that we are becoming just another industry, instead of a movement.

No Longer a Movement?

There is no doubt credit unions are becoming more and more “mainstream.”  They tout their promotions with professional sports franchises, stadium naming rights and multiple business partnerships.

Growth is the dominant success indicator.  Credit union lobbyists argue in tandem with banks against the consumer protection initiatives of the CFP.  NCUA’s Chair cites the FDIC as a financial model for the NCUSIF and positions his supervisory initiatives  because that is how banking regulators act.

In becoming an important component in America’s financial sector, have credit unions also embraced the status quo?  Are they more concerned with protecting their achievements than addressing the economic inequities members face in the economy?

An observer might give examples on both sides of the “movement” issue.  However, I believe credit unions are not alone in their constant temptation to be seen as fully engaged participants in the so-called “free market.”

“The Only Game in Town”

Franciscan scholar Richard Rohr describes the ever-present allure of America’s economic system this way:

Most of us have grown up with a capitalist worldview which makes a virtue and goal out of accumulation, consumption, and collecting. It has taught us to assume, quite falsely, that more is better.

It’s hard for us to recognize this unsustainable and unhappy trap because it’s the only game in town. When parents perform multiple duties all day and into the night, that’s the story line their children surely absorb. “I produce therefore I am” and “I consume therefore I am” might be today’s answers to Descartes’ “I think therefore I am.” . . .

The course we are on assures us of a predictable future of strained individualism, environmental destruction, severe competition as resources dwindle for a growing population, and perpetual war. Our culture ingrains in us the belief that there isn’t enough to go around, which determines most of our politics and spending. . .

F. Schumacher said years ago, “Small is beautiful,” and many other wise people have come to know that less stuff invariably leaves room for more soul. In fact, possessions and soul seem to operate in inverse proportion to one another. Only through simplicity can we find deep contentment instead of perpetually striving and living unsatisfied. . .

St. Francis knew that climbing ladders to nowhere would never make us happy nor create peace and justice on this earth. Too many have to stay at the bottom of the ladder so some can be at the top. . .

 

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A Reaction to Patelco’s Annual Meeting

One permanent change from Covid’s impact is that organizations now live in a hybrid world.   There is the continuing day to day in person contacts and multiple virtual options for meetings and corporate events.

For example, most churches no matter the size, continue to provide both in-person and simultaneous zoom or YouTube broadcasts.  Restaurants continue to promote takeout options in tandem with full dine in re-openings.

In some instances I have found even local persons reluctant to meet in person, preferring the remoteness of a zoom conversation.

The Digital Hybrid World

The virtual interactions are now a routine part of high school curriculum options.  I recently received a link to the InfoFlow morning news show from Montgomery County’s Blair High School.   This virtual broadcast replaces the morning home room announcement over the PA system.

The episode shows a news desk with two student anchors presenting daily updates.  About two minutes in there is an external report on a local historical project recorded by a school reporter in which I participate.  The full broadcast can be viewed here.

The next generation is living and practicing this hybrid reality as a normal part of their activities.

The Credit Union Application

This past Friday I virtually “attended”  Patelco’s Annual Meeting.  The video was primarily the Chairman and CEO talking at desks with senior staff members available.

The format was fully scripted, as are most annual meetings.  The minutes and numerous reports were referred to as being available on the website.  The CEO Erin Mendez gave a short update including graphs showing Patelco’s key trends versus its California peers and the top 30 credit unions nationally.   They showed Patelco’s  10.07% net worth and ROA of .77% for 2023, significantly stronger than the two peer groups.

The directors ”election” was a formality since there were just three candidates and three openings .

The most interesting point was the Q&A at the end of the prepared agenda.   There were perhaps ten questions posted in the chat that were answered by the CEO, staff and even the chair.  These included CEO and board succession planning, priorities for 2024, questions on investments etc.

This was the one chance for members to interact, even though under the control of the virtual operator.

My overall impression of the meeting was a feeling of “formal awkwardness.”  Opening comments were read.  There were motions to move and accept minutes and reports, but no visuals of the members doing so, just head shots of officials leading the meeting.

Patelco now has over 500,000 member-owners.  Several decades ago, the credit union made an attempt to connect with members by holding 50 “town hall” meetings, or one a week, at branch and other locations in their market area.   These conversations with members were led by senior staff. In at least once case the meeting was recorded on video.  The goal was to update members and to listen to their  issues or needs.   But most importantly, to be seen and be available.

Such public interactions take practice.   Once a year formal meetings with Robert’s Rules of Order are not a substitute for ongoing, open conversations with owners.

Such contacts are  the grassroots of democratic governance.   Leaders have a chance to demonstrate their skills and accountability; and most critically to earn members’ confidence for the entire leadership team.

An additional start to develop this competence might be quarterly hybrid town halls with the latest business updates and outlooks.   It is standard operating procedure for public and even private companies.  Just follow any of the quarterly reports being presented daily in this “earnings season.”

Credit unions have an even more compelling reasons for engaging in open member dialogues.  It is not about supporting the stock price or analysts’ ratings; it is a much simpler reality: “They own us.”

 

 

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Chairman Callahan’s Last Interview at NCUA

“It’s a partnership and it works”

Knowing our shared past helps us to understand the present and envision the future.  History provides our sense of community.

From the May 1985 NCUA News, Vol 2, No. 4:

From the recent interview on NCUA’s Video Network, Chairman Callahan praised the NCUA staff, saying, “It’s all working, the team is in place.   There is a sense of confidence in the Agency, and it has infected the credit union movement with confidence as well.”

The Chairman is quick to credit examiners and other Agency personnel for the successes during his term: “Most people at NCUA have a good sense of where the Agency is going and how they fit into the picture.  People at NCUA get the credit for what we’ve been able to accomplish because they brought us to the point we are now.” 

He believes three years of unprecedented growth in shares, loans, capital and membership attest to the positive effects of deregulation and to the success of credit union managers and directors when given the opportunity to make their own business decisions.

As important as deregulation is to Mr. Callahan, increasing the examiner ranks and getting Agency staff out in the field, closer to credit unions is just as important.  “Deregulation actually increased our supervisory responsibilities,” he said.  “We told credit union officials ‘You run our institutions, and we’ll be there to help.’  It’s a partnership, and it works.”

P.S.  See the reference above to NCUA’s Video Network.  This interview was the final edition, number XXI.  If anyone has this recording in their credit union collection, I would appreciate making a copy.

 

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One Member at a Time

What does personal service really mean when a credit union has over 63,500 members?

Weokie Credit Union’s Mission Statement is:

Change lives  in our community, one person at a time, by being the best place our employees have ever worked and our members have ever banked.

A Nurturing Voice

The CEO, Jeff Carpenter, gave permission to demonstrate how this is done, one member at a time, in this story from his March 2024 report to his team:

“Marlene is an elderly member who has been the victim of several recent frauds. The team got together to determine what WEOKIE might do to help (and not upset the member or violate privacy concerns). We determined that WEOKIE should try to get Marlene to add one of her children to her account, to help monitor the activity.

“It was also decided  that Rhonda would make the call and Jeff S. would be there to assist in case things went sideways.  Jeff’s take on the call:

“Rhonda reached out to Marlene this morning while Melinda & I listened in the office. She did an EXCELLENT job speaking with Marlene and conveying WEOKIE’s concerns about her account activity and how we can best help her to  keep her accounts safe. 

“After several minutes and a lot of small talk to  gain Marlene’s trust, Rhonda was able to get her to agree to add her daughter added to the account to help with her finances.  When I say small talk, it was over 50 minutes of conversation!  It was like having a long discssion  with a grandparent. You just let the conversation take its own flow and slowly steer it back to the intended purpose. Rhonda did awesome in this aspect.  Her Nurturing Voice truly shined in this interaction. 

“Rhonda maintained ownership all the way through by following up with Jessica at Main to:  provide the details, including Marlene’s vulnerabilities to fraud; the estimated time when the two members might come in; a commitment to follow up when the meeting is set; a request to be notified to facilitate a warm hand-off; an explanation about the Risk department’s approval of the exceptions with a clear understanding of expectations of the member; and how our role impacts the member’s well being.

“This effort involved six employees and shows the role of teamwork, several of our monitoring tools, and our commitment to making this credit union the best place Marlene has ever banked!  

“Special thanks to Joseph for sharing this member story and how Rhonda, Diane, Jeff S, Melinda, and Victoria worked together to take great care of Marlene.”

The Takeaway

That’s every credit union’s potential secret power:  serving every member, one at a time.

 

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Credit Union Mergers and the Myth of Free Markets

Two conclusions excerpted from a long article by Jared Brock Mega-Landlords Busted for Using AI Algorithms to Price-Fix the Rental Market, on April 10, 2024.

I believe his observations apply to aspects of the cooperative system especially mergers of sound credit unions* now being presented to member-owners.

“First: The free market is a myth.  

“The idea that the world would somehow be better off if there were zero rules protecting the masses from predatory investors is not only deluded and insane, but it’s unfathomably dangerous. A rules-free-market is a black market where the worst actors win.

“Capitalism is all about incentives, and investors have twisted the economy to incentivize extraction and exploitation.

“Second: The modern rules-free-market isn’t what the father of capitalism Adam Smith meant when he said “the free market.”

“He meant a market free from parasites.”

*  See Credit Union Times article of April 15, 2024, Five Illinois Credit Unions Announce Proposed Plans to Merge

 

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Sharing Purpose & Meaning With Effect

Communication transforms when it touches a person’s emotions.  It transcends the moment.  It becomes art.  It helps us see beyond what we knew before.

The most difficult challenge for any organization is telling anyone why they should be interested in joining with you.

Messaging is more than competing for our attention with a product commercial or a clever brand.   Ultimately, it must appeal to something inside.   It should make us care.

He Gets Us is a video campaign that attempts to represent the “greatest love story ever told.”   It suggests the relevance of christen belief in today’s context of religious decline or misuse.

This creative group states its purpose as follows:

We’ve done a lot of homework on our culture. We researched how people feel about each other and what they think about Jesus and Christianity. We’ve connected with thousands of people of various faith traditions and those who claim no religion. We spoke to all kinds of people — different backgrounds, beliefs, and, yes, political affiliations.

And this is what we’ve learned: From politics to sexuality and religion, so many of us feel like our values, beliefs, and identities are under attack by the ideological “others” around us. Many perceive those who differ with them on issues of justice, dignity, and humanity as not just wrong or misguided but also as evil. As enemies. We often see these “others” as close-minded, selfish, hypocritical — and if we’re honest, many of us respond in kind. 

This week I will share several of the group’s “presentations” which look and are sometimes presented as commercials.  But they are much more.  They help us see, to understand more than we did before watching them.

The Credit Union Parallel

What do these “messages” have to do with credit unions?   To be seen as relevant in today’s crowded social media is the same challenge credit unions confront.  There are a number of organizational parallels.

The participation trend lines in most religious denominations are trending down.   Smaller churches are closing.  Larger ones are greying.   Sunday or Saturday “sabbath”  is a time  for  family errands, fun outings and preparation for the week ahead-not participating in a community of shared purpose.  Society’s divisions are mirrored in our religious practice as presented in the group’s purpose:

The more ideologically defensive we become, the more we are willing to sacrifice things like kindness, patience, and the respect and dignity of others for the sake of victory — the righteous ends justifying the dehumanizing means. And it’s tearing us apart. We experience it in politics, in the workplace, in schools, and even in churches. And at the heart of the conflicts is a fundamental disagreement about what it means to be good. 

Credit unions and churches no longer seem central to many persons’ lives. Our basic needs and core values, “to be good,” are fulfilled in other ways and commitments.

The He Gets Us videos try to show the relevance of lessons from generations ago for real people today.

My hope is to inspire rethinking for today’s coop messages.   We need to move beyond the headlines and priorities of our current moment and rediscover the energy that made the industry a movement, an alternative to the status quo and  rediscover who we can aspire to become.

The Immigrants

A hot button topic when people are polled about public issues for political campaigns is the flow of migrates to America.

The one-minute video, Refugee, presents this ongoing human circumstance with a specific context.

(https://hegetsus.com/en/featured-videos/refugee)

What I found equally compelling is the producer’s five-minute  story  telling how this video was assembled.  The making of the Refugee video:

(https://hegetsus.com/en/featured-videos/the-making-of-refugee)

Does this message open one to a different way of seeing this issue?  Does it stay with you after viewing?  Does this human-centered perspective suggest a parallel in your credit union’s role?