Category: Co-ops in Capitalism

Posted on

The Revolution Credit Unions Are Missing

During my college days five decades ago, the primary work-study jobs were dorm crew, dining hall or checking out library books.  Students receiving financial aid were expected to work at least 10 hours per week.

As the decade of the 1960’s progressed, the college campus atmosphere inspired by the Camelot years of President Kennedy gave way to the increasingly anti-Vietnam war and civil rights movements.

New protest groups were spawned across campuses.  These included SNCC, Black Panthers, SDS and multiple other efforts to support social and political change.

In a partial final year on campus waiting for my date with Uncle Sam, I  saw a three-day occupation of University Hall and attended a student meeting where one of the participants placed a gun on the table to demonstrate his radical intentions.

Part of this campus mood was anti-business—all kinds, not just the protests against Dow Chemical or other business seen as supporters of war. Capitalist society was deemed responsible for the multiple wrongs protestors wanted to change in US public policy and social inequity.  No one saw business, or entrepreneurship worthy of academic attention or support.

Still, students would occasionally use their university setting to develop start up ideas.  One that became very popular in the ’60’s was Operation Match, a paper based computer analysis of questionnaires to provide participants names of potential dating partners. It was noteworthy, because it was an innovation that filled an ever- present social need.

Today’s Campus Environment

For the past decade there has been a revolution in both attitude and support for students in higher education who wish to create new business startups.

All of the top universities now have on-campus organized support, including courses for students and faculty who want to start new businesses.

A February 24, 2024 article lists the 14 Best University Accelerators and Incubators for 2024.

Every listing is a top academic institution including Harvard, Duke, UT Austin to USC and UC Berkley.

Here is a description of MIT’s multi-option effort which is headlined with its $100k Pitch:

  • MIT delta v: An accelerator program that runs from June-Sept for MIT students with the ability to receive up to $20,000 in equity-free milestone funding.
  • MIT NYC Startup Studio: A startup studio in NYC for MIT students and alums with the ability to receive up to $20,000 in grant funding.
  • MIT Fuse: A 3-week micro accelerator for teams with at least one MIT student as a founder.
  • The MIT Entrepreneurship Club: A community that wants to help MIT students start companies and connect them with startup jobs. Watch my interview with them.

‍Amazon web services (AWS) now sponsors a nationwide competition for university based startups:   “It’s no secret that some of the most successful startups were founded by members of the university community: from Ava Labs to Anyscale and InsightFinder, to name a few. At Amazon Web Services (AWS), we believe this is because students and faculty are often creative thinkers who are willing to take risks and collaborate with their peers—all essential qualities in a founder.”

“For current Harvard students, the Venture Incubation Program (VIP) within Harvard’s Innovation Lab fund is a 12-week program with mentoring and resources. Harvard’s Innovation Lab also hosts the President’s Innovation Challenge, where students can win funding money of up to $75,000 for a great idea. Judging criteria includes viability, empathy, rigor, ingenuity, traction, economics, and impact.”

The George Washington New Venture Competition (NVC)

Here in D.C. George Washington University sponsors an annual competition inviting students, faculty and their supporters to present business proposals and collect cash prizes and other forms of startup support and counsel.

Three finalists compete in one of four startup categories:

Consumer Goods & Services

Business Goods & Services

Social Innovation

Health Care & Life Sciences

Each finalist prepares a one-minute video of their business proposal.  There are immediate cash prizes plus additional consulting and funding support:

  • First place winners selected from these tracks will each win $10,000
  • 2nd place cash prize $7,500/track
  • 3rd place cash prize $5,000/track

Companies have one year to register as an LLC to claim the money.

To see these young entrepreneurs’ ingenuity, passion, and commitment I would encourage you to sample one or all of the 12 finalists’ sixty second  pitches which you can find here.   Several that were intriguing were Siyeh Tech’s entry to accelerate the “Speed of Peace” after conflict, In-Locater, and Goal Plus.

All of these business ideas are either conceptually complete, if not already in beta.   George Washington’s New Venture Competition is one of many in the higher education community.   This is not only an “educational” institution responding to students’ interests; in some the university benefits from partnering as startups go to scale backed with venture capital.

These competitions are not standalone events such as a campus springtime arts festival.   These programs are supported by courses, different “labs,” seminars and lectures on the art of pitch preparation and visits by university alumni speaking on their business success.

These educational innovations are helping to spark an ever-renewing stream of new business ideas with support systems intended to foster success. Students are encouraged to jump into the capitalist world and perhaps reap fame and fortune.

Simultaneously a parallel change for venturing has developed for college athletes. They can now receive income from their Name, Image and Likeness (NIL) endorsements by private businesses.  Caitlin Clark is not only Iowa’s leading basketball player, but she also appears in commercials while her games are being broadcast.  She may be the first million dollar undergrad student-athlete.

And Credit Unions?

Unlike my era in college, higher education is an active participant in American enterprise.   What does this have to do with credit unions?

Cooperatives are missing in action.  Students are not learning about personal finance from credit unions.   Credit unions which have students in their FOM’s often see them as a secondary market opportunity.

Every company, professional sport franchise, consumer product, auto manufacturer etc. must resell its brand to the next generation of users.  Or face the prospect of going out of business. Product loyalty, like religious observance,  is not easily passed down in a family in today’s society of instant access and social media.

If credit unions miss this generation of college students, will they ever catch up as they move on in their careers and families?

In the 1980’s, NCUA played a very active role supporting new student led credit unions as described in this post.  That effort is missing today.

Credit union’s absence from college and university campuses feels like a missed opportunity for attracting this generation of self-help innovators and strivers.  How do coops become part of  this new enterprise engagement by student entrepreneurs?

Posted on

Two Biblical Stories and Human Nature

Today is Maundy Thursday of Holy Week. The day of the Last Supper and Jesus’ arrest in the Garden  of Gethsemane.

Events on this and subsequent days include two intense examples of human motivation not limited to strictly spiritual contexts.  Rather the story shows how any individual might react to events in their own life.

Prophets and Honor

Every social system has ways of recognizing the successful and the benefactors of their profession. In credit unions a major event is the Herb Wegner dinner, the occasion for presenting lifetime achievement awards to honor selected leaders.

These traditions salute individual’s values and/or performance that fulfill the goals of the industry: profit, service, innovation,  growth or even longevity.   Some goals are very tangible, others more qualitative.

Those Without Honors

But whose contribution does not get honored?   The topic is raised at least twice in the New Testament:

In Mark 6:4 Jesus said to the crowd, “A prophet is not without honor except in his own country, among his own relatives, and in his own house.”

And, in Luke 4:24 (English Standard Version 2016): “Truly, I say to you, no prophet is acceptable in his hometown.”

Why this disbelief?  Does familiarity breed contempt?  Are we skeptical of any special insight let alone prophetic wisdom from persons we know well, have worked with over years. and who seemingly share the same experiences as everyone else?  Why should one peer’s views be trusted over another’s?

There is an inherent caution to see those among us, whom we know well, as having special insight versus merely expressing a different opinion.   Persons, often outsider who focus more on the message, are often more inclined to listen to these singular views.

Ordinary people can have extraordinary wisdom.  Sometimes their outspokenness make them unpopular with those in authority or leadership.   The “prophetic voice” is uncomfortable.  It challenges current shortcomings often with a passionate hope for a different future.  For those who are being challenged, this passion feels like anger.

I am not referring to the purveyors (often consultants) of innovation who promote operating improvements. The prophet’s concern is more deeply rooted in fundamental meaning and purpose.

The question for credit unions is, are there any prophetic voices challenging local or national priorities today?  Who might they be?  What is basis for their critique?

And if we can name none, what does that say about the state of our “movement”?  Has consensus trumped wisdom?

The Thirty Pieces of Silver

A second example routinely pulled from Maundy Thursday is Judas’ betrayal of Jesus in the Garden for 30 pieces of silver.

Think of how often this metaphor is used to accuse someone taking an action for monetary or other rewards seemingly to betray their personal beliefs.

Rev. Megan Brown takes a more nuanced view of Judas’ motivation:

“Judas was not a peripheral bystander, but one of the twelve, the inner circle of disciples who had accompanied Jesus in his ministry and in a shared, communal life together.

Surely Judas knew the implications of his actions. Surely, he knew that the chief priests and the elders were growing weary of this rabble rouser, Jesus, and that they wanted him gone. This exchange, and the kiss that follows later are ominous moments in the life of Jesus and his followers. They leave one wondering about Judas’ motivations. “

Judas was a believer. Some have interpreted his action as driven by deep disappoint that Jesus was not radical or bold enough in his Jerusalem journey.  The march from the Mount of Olives to the Temple should signal a rebellion against Roman rule, not a pacificist call to turn the other cheek.

Or, maybe he sensed that the multiple political forces mobilizing against this upstart rabbi from Nazareth were becoming too strong; so he decided to go to the other, more likely “winning” side.

Perhaps he was emotionally confused by the historical intensity of the Passover remembrance, the increasing crowd appeal of Jesus and the growing immanence  of a life-making choice.

What we know is that Judas deeply regrets his actions, attempts to return the silver coins and commits suicide.

Judas shows us the very human side of intense hope and belief. Is this a movement that will go in the directions I believe it should? Is there another option to this leader’s course of action? How does one express dissent if convinced current directions are not the best?

How many initial “reformers” give up their quest from exhaustion,  just to get on with life, and be comfortable with their peers?

Whether Prophetic Voice or Judas?

All movements have both personalities in their adherents.   We all might cite leaders who took courageous stands or whom we believe compromised their duty to their followers.

That is what makes leadership so critical, and often controversial.   It is also what makes public dialogue so vital.

We live in an era where there is continuing reinterpretation and debate after millennia about faith, whether Christian, Jewish, Muslim or just a value-centered life.   While many believe that truth, when proclaimed, is universal; even some would challenge that assumption.

The one common approach that all faith and other “movements” followers have ultimately taken to succeed, is to pursue these issues in community. People aligned with one another agree to listen and learn together how their differing perspectives can arrive at common purpose or priority.

The Necessity of Community

Scott Galloway has put the power of relationships in a much broader context in his precent post Mammal.ai.

“Within and across species, relationships are essential to surviving and thriving. . .

“Humans have speedballed the power of relationships. Physically we are weak, slow, and fragile, with mediocre senses and absurdly long infancies. Yet, thanks to our superpower of cooperation, we’ve dominated our environment and become the apex of apex predators. There are more birds in captivity than birds in the wild. . .

“We are wired to seek and sustain relationships and cannot survive without them. The future of the human race won’t turn on space travel or climate tech, but on our ability to attach to others. A sense that we matter, that we can call on and be called upon by others to ease burdens and celebrate joy.”

It is not coincidence that the last moments of Maundy Thursday’s Biblical events were spent in community.   Christians call it The Last Supper.

Music for Holy Week

Stabat Mater, by Antonio Vivaldi (1712). There have been many beautiful settings depicting the scene of the Mother of God standing in sorrow at the foot of the cross.

(https://www.youtube.com/watch?v=qQpWwMkGtj4&t=228s)

 

 

 

 

Posted on

An Observervation on the Difficulty of  Gaining a Credit Union Charter

Oscar Abello is the senior economic writer for Next City.  His focus is community initiatives that bring opportunities to those left behind by existing financial options.  New credit union charters are an area of special interest.

His latest story is A Long-Awaited Black-Led Credit Union Finally Gets the Green Light.  The subtitle is “after eight years of work, Arise Community Credit Union just secured Minnesota’s first state charter in over two decades.”

The announcement of this new charter’s background has been reported by the credit union press.  Abello’s story focuses on the difficulties of the process.   Here are some of his observations:

Chartering a new credit union today is like traversing a long-lost trail through the woods, one that used to be well-traveled but is now overgrown, littered with fallen trees and other obstacles no one has had to navigate in many years. Prior to 1970, there were 500 to 600 new credit unions chartered across the country every year. After a steep decline to near zero, the numbers have never recovered. Over the past 10 years, fewer than 30 new credit unions have been chartered across the country.

New Credit Union Charters

The annual number of new credit union charters issued nationwide by the federal government, as published in the annual reports from the NCUA.

According to Inclusiv, a network of credit unions that focus on community development, minority credit unions across the country are closing at the rate of one per week, making the new Arise Community Credit Union’s chartering even more urgent if that trend is to ever be reversed.  (Editor’s note: all credit unions close at a rate of more than three per week). . .

Arise hopes to fill in the gap left behind by other more conventional banks and even other credit unions. Predatory lenders have jumped into the gap left behind by the retreat of the mainstream banking system from certain communities. African Americans are twice as likely to live within 2.5 miles of a payday lending storefront, compared with all Minnesotans. . .

Chartering a new credit union is a huge lift. It’s been nearly eight years of organizing for Arise, but it’s not uncommon for aspiring credit union organizers to take multiple years between initial conversations to raising startup capital to finally getting a new charter. The Association for Black Economic Power also had to deal with a leadership transition along the way — it’s now led by Debra Hurston. The new credit union has its own CEO, Daniel Johnson, who has deep family ties and professional ties to the Northside of Minneapolis.

It would have been easier — and quicker — for Hurston if her group just brought in an existing bank or credit union as a partner organization to provide access to credit and basic financial services to the Northside.

But Hurston says in surveys, town halls and just informal conversations over the years, the Northside’s desire for its own institution has only gotten stronger.

“The mistrust in the banking community, it’s not a small thing, and it can’t be fixed overnight,” Hurston told me last year. “We’re starting from the wrong spot…if I have to protest in front of you to make you treat me right. Something’s not right about that. So no one from our communities has ever asked me if we should just partner with a larger bank.”

Insight for Those Who Care

Abello’s reporting should be a boon to the credit union community.  For as Robert Burns wrote of this ability to see what others may not:

O wad some Power the giftie gie us To see oursels as ithers see us! It wad frae mony a blunder free us, An’ foolish notion: What airs in dress an’ gait wad lea’e us, An’ ev’n devotion!

Music For Holy Week

Christ on the Mount of Olives, by Ludwig van Beethoven (1803)

(https://www.youtube.com/watch?v=5ZKWcn7bqsQ&t=41s)

Posted on

The Lehman Trilogy and the Arc of American Finance

The local Shakespeare Theater’s run of the story of Lehman Brothers family in America incorporates multiple themes.  They are all very much  present in America today.  I believe they  can inform the credit union story.

The play is an adaptation of a novel about the Lehman family. Three actors portray 55 different characters in the 163 years of the family’s timeline.

Although the firm’s $600 billion bankruptcy was the central drama of the 2008 financial crisis, the family had long been absent from any leadership roles when this occurred.

An Immigrant Story

The play is the story of a German Jewish family settling in Montgomery Alabama in 1844.  After first opening a dry goods store, they expand to become  “middle men” in the cotton trade between southern plantation growers and Northern textile mills.

They eventually open a New York office to enhance their trading activity and expand to other commodities post Civil War.  These trades include wheat, coal, iron ore, that is  the raw materials at the center of America’s industrial revolution.

As their trading activities expand they become a “bank” and underwrite the new industries being founded  from railroads to computers and entertainment after WW II.  Eventually these material commodities are supplanted by stock trading which brings the firm close to collapse in 1929.  Outside owners will now control a majority of the firm.

Post WW II trading activity dominates its traditional investments in other industries. These traders buy out the firm’s presiding CEO, Pete Peterson, putting their priority on a strategy that eventually leads  to the 2008 failure.

The story of growing economic wealth is interwoven with the family’s old world religious and family values. Jewish celebrations are initially central to life, but gradually become less so as succeeding generations assimilate into American culture.  Their religious observance is “reformed.”

A Three Part Saga

Part family history, part portrayal of evolving moral values and part the story of how finance becomes central to American enterprise give the play multiple layers of meaning.

As I watched this century and a half saga, many parallels with the present day credit union story come to mind.

Credit unions have largely moved away from their focus on a local group or community to become a diversified mixture of legacy founders and new market expansions.  The values and passion so critical for success in early years have been replaced by professional managers brought in for their expertise.

Growth becomes central to reporting success.  Corporate wealth creation versus member well-being is celebrated.  Instead of open governance, oversight is increasingly concentrated in a few hands where leaders perpetuate their tenures.  Rather than paying their success forward to future generations, incumbents explore options to cash out when their term in leadership is ending by turning control over to other firms.

The Past Is Gone

The Lehman family gradually lost control of their “bank” when market circumstances required new capital.  Evolving  financial trends for their trading skills also changed the firm’s purpose.  Middleman roles gradually evolved from buying and selling actual commodities, to underwriting new businesses and then merely trading pieces of paper, i.e.  stocks.  Ultimately finance became just digital transactions.

In this new world, everything becomes a number.   And everything has a price. Finance becomes just a way to make money, versus investing in tomorrow’s economy.

Buying and selling (acquisitions) become critical skills.  Member/customer trust is eroded because   consumers no longer believe you will be there for them.  Money management becomes the epicenter of success.  All ties to previous values and economic roles are ended.

That in short is the story of Lehman Brothers creation.   Is it an object lesson for credit unions?

 

 

Posted on

What Credit Union’s Can Learn from the FHLB System

This month the Congressional Budget Office (CBO) released a 27-page report analyzing the Federal Home Loan Bank System.

The significant chapters include an Overview, Financial Condition, Subsidies and Risks.

The FHLB system is the largest lender to credit unions. Hundreds of credit unions have capital invested in individual banks and rely on them as critical partners for liquidity and ALM management.  At 2023 credit union borrowings reached a peak in the system’s history:

The Central Liquidity Facility

How can the cooperatively owned, tax exempt FHLB, created to serve the savings and loan system, thrive with credit unions while their own funded CLF plays no role at all? Certainly, the borrowing demand is there.

At February 2024, the CLF reported $913 million in total assets, equity of $862 million and one loan for $1.0 million.

A 5% return on the fund’s retained earnings of $42 million would pay all CLF’s operating expenses.  It’s 4th quarter 2023 dividend of 4.62% trailed the overnight market by .75%. Why aren’t members even receiving a market return on their shares?

More importantly, what can credit unions learn from the CBO’s analysis and the system’s response?

The CBO and FHLB Summary

Ryan Donovan, CEO of the Council of the Federal Home Loan Banks posted a reply #FHLBank to the CBO report: “it does a fair job of acknowledging the many things we have been saying.” He singled out a number of key success factors:

Private investors — not the government or taxpayers — bear the cost of any “subsidy” associated with the FHLBank system.

The FHLBank system plays a valuable role in providing liquidity to its members, particularly during times of market stress.

The benefits the system provides accrue not only to the members but to borrowers and the public. In fact, it says,

“Lower financing costs on FHLBs’ debt are passed along through lower rates on advances than members would receive when borrowing in private debt markets. In turn, competition leads members to offer lower rates to borrowers.”

“Because members are both owners and customers of FHLBs, almost all of the subsidy (after afford-able housing payments are deducted) probably passes through to them, either in the form of low-cost advances or, to a lesser extent, through dividends.”

The existence of the FHLBank system “reduces mortgage rates and provides liquidity to the housing market, particularly during period of financial stress.”

The FHLBank system poses very little risk to taxpayers. If one accepts the CBO’s figure of $600 million in federal tax exemption, the roughly $1 billion that the FHLBanks will distribute in affordable housing and community development grants this year seems like a very good investment for taxpayers.   

Donovan concludes: The report stymies critics . . .because CBO makes clear FHLBanks pose little risk, they provide significant public benefit, the implicit guarantee is perceived by bond investors and the benefits of the system flow through to borrowers and communities.

The FHLBank system is poised to deliver $1 billion toward affordable housing and community development . . .We’re engaged every day with our members and other stakeholders on how those resources can be used most effectively.  (end)

All these housing and community benefits should be possible with the CLF.  Why isn’t this happening?  What might a CBO report on the CLF say? Would anyone care?

Music for Holy Week

With each daily post I will be adding excerpts from some of the great classical music inspired by this Holy Week. Today’s is the “Resurrexit” from Berlioz Messe Solennelle.

(https://www.youtube.com/watch?v=K-RX0XtBBnw&t=29s)

 

 

 

Posted on

A Baseball Story about Character: An Example for Credit Unions?

Opening Day of the 2024 baseball season is eight days away. Players are being assigned to AAA from spring training or gaining limited roster spots on the major league varsity.

The sporting press is full of hope and enthusiasm. Every team’s ambitions are equal at this starting line. Accompanying these renewed expectations is the ever present realities of enormous player contracts, team moves to save money and whether multi-million dollar veterans will  live up to their salaries and/or overcome temporary injury.

Baseball has become a game as much about money as competitive athletics.  “Winners” are those with record contracts but not necessarily leading their teams to greater success.

However there is a counter story.  It is about a player who stayed true to  the  game of baseball and his own values as told in the Imaginative Conservative:

The Baseball Hero Nobody Knows

By Stephen M. Klugewicz

His career stats indicate that he was a mediocre baseball pitcher—perhaps the epitome of mediocrity: 84 wins; 83 losses; a 4.49 Earned Run Average; a Walks-plus-Hits-to-Innings-Pitched ratio of 1.42.

Yet Gil Meche, who played for the Seattle Mariners and Kansas City Royals, was responsible for one of the most astounding, yet almost unnoticed, acts of virtue ever committed by a sports figure. In the winter of 2011, Mr. Meche, then with the Royals, voluntarily retired from the game, foregoing the final $12 million on his multi-year contract.

Mr. Meche was injured and would have sat out the 2012 season while receiving paychecks. “When I signed my contract, Mr. Meche explained, “my main goal was to earn it. Once I started to realize I wasn’t earning my money, I felt bad. I was making a crazy amount of money for not even pitching. Honestly, I didn’t feel like I deserved it.”

Mr. Meche’s decision is nearly unprecedented in professional sports; countless other injured players have gleefully accepted paychecks while they sat out entire seasons with injuries. “This isn’t about being a hero — that’s not even close to what it’s about,” Mr. Meche insisted. “Making that amount of money from a team that’s already given me over $40 million for my life and for my kids, it just wasn’t the right thing to do.”

Though a small event in the great arc of American history, Mr. Meche’s action would constitute an example of good character in any age, but it is especially noteworthy in the America of the early twenty-first century, an era of dishonesty, self-absorption, and greed. It should not go unnoticed, nor should it be forgotten.

Lost Virtues in Credit Unions

Today the opportunity to cash out one’s credit union tenure and leadership position is advertised in direct marketing appeals.

One headline reads:

1,200 Credit Union Mergers by 2030 –
How Are You Positioned?The YOU refers to the CEO ‘s who are being solicited.   Either give up and join the merger-sales endgame and /or join in the bidding to secure another credit union’s  resources. The need is urgent.  Here’s why:

With regulations set to zap fee income, interest rates slowing mortgage action, compliance burden increasing costs and the need for scale driving strategic decisions. . . predictions say there may be as many as 1,200 credit union mergers by end of year 2030.

·  Do your financials put your credit union in the position to be a merger or merge?

There is no pretense or subtlety here.  Your future is full of threats, give up now and we’ll help you cash out.  No mention of members’ best interests.  No recognition that virtually every credit union operating today has a charter that has served at least three generations of members and created meaningful reserves of collective wealth and service legacy.

The bottom line in this strategic outlook is that prospective failure can become a CEO’s present  success story.  So get out while the getting is good!

Instead of character and values being triumphant, some coop leaders and their consultant allies are directing the industry into an America of the early twenty-first century, an era of dishonesty, self-absorption, and greed.

These actions dishonor the character of hundreds of Co-op “Gil Meches” who retire each year and loyally pass the credit union’s torch to their successors.

Posted on

One State, a Credit Union CEO and Financial Literacy

According to the December 2023 Lane Report, a Kentucky Business Journal, there is change coming to the teaching of financial skills to students in the state:

Kentucky high schools maintain a C grade in a national report card on how well they teach personal finance, but by next year their grade may climb to a B.

Given a C in 2017, Kentucky maintains this grade in the updated 2023 National Report Card on State Efforts to Improve Financial Literacy in High Schools, issued by The Center for Financial Literacy at Champlain College in Burlington, Vt. . . 

John Pelletier, director of the Center for Financial Literacy, says that by 2028, 23 states are projected to have an A grade. . .

“Kentucky requires high school students to take vocational instruction, which includes personal finance concepts,” says Pelletier. “The Class of 2024 will be required to take one or more courses or programs with financial literacy content, but implementation will be up to school districts.”

Pelletier says state policy makers are responding to families without financial safety nets during the pandemic, as well as to advocacy by educators, administrators, parents and students. 

Prior to the passage of this bill in 2018, there was no specific financial literacy instruction requirement for high school graduation.

The Kentucky Department of Education now lists financial literacy resources on its website to assist schools implementing this requirement beginning in 2024.

The Advocacy Role by Credit Unions

At the recent GAC I spoke with a Kentucky credit union leader, a CEO for just ten years, who has put financial education at the center of the organization.

The credit union offers classes at  local high schools, for military retirees and veterans, and for employees of groups the credit union serves.

The CEO has taught some of these classes.  As a member and leader of the Kentucky league, the credit union community became advocates for this educational  priority in Kentucky schools.

This financial education concern was but one of  many initiatives this CEO shared about his short tenure.  What impressed me was his focus on “connecting” with the many constituents the credit union reaches.  He meets with the leaders of government and private organizations they serve, supports community and other credit unions in the state, and advocates for members’ financial well-being.

The History of Financial Education

His efforts are an example of a generation changing event.  His role is more than managing the financial trends of a credit union, but uplifting possibilities for all across the state.

What I didn’t realize was how difficult this education priority was until seeing this brief, five minute history of financial education in America.  It shows how educational priorities have changed since the Eisenhower era’s  focus on math and science. Today the emphasis on teaching financial life skills is one area of strong bipartisan support.

(https://www.youtube.com/watch?v=0uvurQcj0fs)

This is how one CEO has provided leadership far beyond his membership.  Yet without his credit union’s example and the practice of what he was seeking, the effort might not have been as successful.

Now all Kentucky students, and their parents, have the prospect of a “B” or even an “A” in this most important understanding of  financial responsibilities throughout life.

Posted on

The Oscar Nominated Film Every Credit Union Should See

Nominated as best documentary for this year’s Oscar awards, The Barber of Little Rock is a must see for every credit union believer.

The film is the story of Arlo Washington’s personal commitment  to bring financial services and hope to the black community of Little Rock, Arkansas.

The film produced by the New Yorker magazine is 35 minutes and can be watched online any time.

(https://www.youtube.com/watch?v=1amOPUn49aM)

Story upon Story

Arlo is a barber who converts his basic role in the black community to one of broader service.  This story is told in this Next City article The Black Barber Opened the First Credit Union In Arkansas Since 1996. 

The film is Arlo’s first person account filled with dozens of examples of hardship. hope, and grant making through the CDFI he organized to make loans.

There are numerous examples of what it means “to be banking while black” and why there is little trust in the existing banking system. The film provides a brief history of black efforts for economic equality from the post civil war promise of “forty acres and a mule”  to modern day red lining in Little Rock-a city divided by inequality and a highway.

The film even shows learning empathy in the “two minute drill”  where two former incarcerated men learn to “see” each other’s hurts.

A Potential for Every Credit Union: Economic Justice Rights Wrongs

The film is a study in self-help.  It shows the need and power of putting money back into the community.  “A tree is known by the fruit it bears,” says Arlo. “If you have all the money and wealth you want, and don’t make an impact, what do you have?”

The film’s many residents assert multiple times  that economic opportunity brings freedom.  One says that if this (model) catches on, it will become a threat because people can see what they can do to be free.  There will be no more excuses for economic injustice.

People Trust Community FCU

The film’s story of Arlo’s efforts ends before the credit union he chartered is up and running.  There is a picture of the building and sign, but no recognition.

At December 2023, the credit union reported total assets of $4.4 million, loans of $326,410 and 445 members.  It has capital of 11% or $482,000.

The film was released just two months ago and has been viewed 352,000 times with 433 comments posted afterwards.

The impact of this enterprising person’s example  is extending far beyond the borders of Little Rock. It is a wakeup reminder for every existing credit union of the potential to change people’s lives and the trajectory of their community.

Viewing this current effort should be a catalyst for conversations in every credit union  trying to make a difference in their members’ lives.

 

 

Posted on

Credit Unions Before NCUA, America’s Credit Unions or Share Insurance

Before the organizational titans of today’s cooperative system were created, there were tens of thousands of credit unions chartered by ordinary men and women.  Who believed in extraordinary possibilities.

A living example of this belief is Rincones Presbyterian Credit union, chartered on January 1, 1960.  This founding predates the “origins” of most of today’s credit union leaders.

At yearend 2023,  the credit union was $5.2 million in assets with 804 members.  It has three employees with an average salary of $32,745. Last year their loan originations increased 15.7% to total $2.3 million, the majority for autos.

Rincones in Spanish means a “small secluded valley,” or literally a nook. Located in Chacon, an unincorporated area of New Mexico with an elevation of 8,166 feet, harsh winters have given the area the name “Little Alaska.”

Their vision and mission are printed on the sign marking their “head office.”

Would credit unions be even more successful if they followed the Trust of these founders?

After all, that is what we print on all of our coins and  currency.

Posted on

A Study of US Credit Unions

“. . .our results indicate a serious misalignment between the legislation that establishes the credit union mission (a tax exemption in exchange for meeting the credit and savings needs of consumers, especially those of modest means) and the actual performance of credit unions under that legislation.”

Brief extract from: Who Consumes the Credit Union Subsidies? (Queen’s Management School, Research Paper 2022/03 written May 10, 2022)

The Challenge

How would your credit union respond to this academic conclusion?