Category: Co-ops in Capitalism

Posted on

July 4, 2026: Credit Unions and America’s 250th-Ideals and Contradictions

America’s Declaration of Independence opens with words that  inspired a new era of world-wide democratic political revolutions.  No more rule based on divine right, inherited position or pure force.  The words:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

Centuries later America strives to achieve these ideals. Even with our imperfections and unfinished  dreams, individuals  and countries around the world are still  inspired by America’s past and its future hopes.

Democracy Is Not Easy

Democracy and its embrace of individual freedom is an ongoing challenge. One of the contributing factors is that the very freedom that encourages debate, dissent and speaking truth to power is used by all points of view.  The irony is that some of those views oppose the very values in the opening words of the Declaration.

Changing the status quo, or prior error,  has never been a quick task for America.  Necessary reforms are opposed as threats to existing structures of power and privilege.

This has always been the case.  Some divisions can take decades, or generations,  to heal or overcome.

Righting the nation’s or an institution’s misdirections is never easy, whether politically, culturally or economically. But it is also an opportunity for new voices and new generations of leaders.

Credit Unions’ American Context

The shortcomings between our cooperative ideals and our daily realities are part of the credit union story.  This challenge was recognized by the founders of the movement.

In Filene’s Speaking of Change, a collection of his speeches and articles published in 1939,  there is a  chapter, George Washington and Financial Liberty.
 Filene’s view was that one of Washington’s greatest achievements wasn’t winning the war for Independence, it was having Hamilton and Jefferson in one cabinet and getting results from both.
He uses that as the model for the credit union movement saying, “temperamental conservatives” and “temperamental radicals” can work together because they’re dealing with facts, not philosophies.
One example of the effective partnership of philosophical opposites is the pairing of Ed Callahan, a conservative who believed in limited government regulations and efficient use of public funds, with the Chicago, ward 1 Democratic precinct captain progressive Bucky Sebastian. Their combined talents revolutionized credit union oversight first in Illinois and then nationally at NCUA.
Several of Filene’s  observations are especially relevant this July 4th, 2026, in the movement’s 117th year:
  • “What is needed is that the American masses shall learn the art of constructive self-government in this machine age — in this age in which life is no longer organized on a small community pattern but in which all Americans are more or less dependent upon what all other Americans are doing.”
  • “For unless we can achieve economic democracy, our political democracy must be a sham.”  (Filene Source: Sarah McNeil CEO, United Trades FCU)
The challenge of member-owner rights and democratic governance is even more critical in today’s $2.5 trillion cooperative financial sector.  Credit union leadership is increasingly exercised as a privilege for the few, not a responsibility shared with the many member-owners.

Conflicting Coop Priorities

The rich and diverse legacy built by generations of loyal members is being swooped up in a merger frenzy driven by personal greed and ambition.  But many other leaders have remained dedicated to the unfinished work serving members in their communities.

Cooperative history is about more than the many volunteer founding stories and their early efforts to build a new financial system of worker and community groups.  It is also about those whose courage called attention to the inequitable financial member circumstances that should be the focus for cooperative solutions.

Those voices are present today.  But is their call to rediscover who we are and who we can be being heard? Especially in the present circumstances of coop business dynamics, social and political turmoil. Will the ever-present siren appeals of market opportunity drown out our unique founding goal of public purpose?

On this national holiday, the country is again having a critical conversation about our past and future greatness.  So too are credit union leaders.

My  hope for how we will respond to the present challenges, as a movement and as a country, is based on two factors:  our moral conscience and our history of doing the right thing in time. Our individual duty as citizens and as cooperative adherents is to witness what we value by our daily acts.

The Call for Grace in Times of Need-A Musical Reminder

Nowhere is this combination of America’s lofty aspirations and human reality more evident than in one of the most well-known songs with words from the poem, America the Beautiful.

The author, Katherine Lee Bates; (1859-1929) was inspired by a trip to Pikes Peak in 1893. Her poem first appeared in print on July 4, 1895, in The Congregationalist, a weekly journal.

All eight stanzas open with praise for America’s glories (purple mountain majesty) and accomplishments (pilgrim feet).  But each verse then closes with a prayer, a call for grace or a plea.  America’s beauty is both her past and the aspiration for a better tomorrow..

Here are the verses edited to show first the real glory of America and then the ongoing needs:

O beautiful for spacious skies, For amber waves of grain,. . . God shed His grace on thee, And crown thy good with brotherhood, From sea to shining sea!

O beautiful for pilgrim feet Whose stern impassioned stress, A thoroughfare for freedom beat. . . God mend thine every flaw, Confirm thy soul in self-control, Thy liberty in law!

O beautiful for heroes proved In liberating strife. . .May God thy gold refine, Till all success be nobleness, And every gain divine!

O beautiful for patriot dream, That sees beyond the years, . . . God shed His grace on thee, And crown thy good with brotherhood From sea to shining sea!

Oh beautiful for halcyon skies For amber waves of grain . . . God shed His grace on thee, Till souls wax fair as earth and air And music-hearted sea!

O beautiful for pilgrim feet, Whose stern impassioned stress. . . God shed His grace on thee, Till paths be wrought through wilds of thought, By pilgrims foot and knee!

Oh beautiful for glory-tale Of liberating strife, . . Till selfish gain no longer strain The banner of the free!

O beautiful for patriot dream, That sees beyond the years, . . . God shed His grace on thee, Till nobler men keep once again Thy whiter jubilee!

.(https://www.youtube.com/watch?v=zEDv5xG3rxE&t=26s)

Posted on

Freedom and Credit Unions as America Celebrates Her 250th

One of America’s founding ideals is captured in this poem with its familiar and oft-quoted  final lines from her “silent lips:.”

The New Colossus

Not like the brazen giant of Greek fame,
With conquering limbs astride from land to land;
Here at our sea-washed, sunset gates shall stand
A mighty woman with a torch, whose flame
Is the imprisoned lightning, and her name
Mother of Exiles. From her beacon-hand
Glows world-wide welcome; her mild eyes command
The air-bridged harbor that twin cities frame.
“Keep, ancient lands, your storied pomp!” cries she
With silent lips. “Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!”

Emma Lazarus, written in 1883, on the Statue of Liberty

Freedom, Liberty and Opportunity

One of many possibilities beyond the  “golden door” was begun some 25 years later during one of America’s earlier progressive reform eras.  St. Mary’s Bank, the first credit union,  was organized in 1909 by a priest to help workers in a factory  with small personal loans.  From that small seed, today’s cooperative financial system has grown to $2.5 trillion serving tens of millions of American consumers.

More than seventy years later, a new era of credit union potential was launched. This new chapter was described  by the Chairman of NCUA in his Three Freedoms speech to the Massachusetts CUNA league’s Annual meeting on November 3, 1984.

Freedom is commonly understood to be free from something that limits or controls an individual’s actions by fear, want, arbitrary rules or sometimes coercion.

But freedom also  enables individuals and society to undertake collective efforts essential for living in communities in which interdependency is crucial for the well being of all. This “empowering” opportunity is how Callahan  described the transforming outcomes of deregulation for the credit union system.

The changes in government’s role had provided a new context where credit unions were enabled to make decisions not previously open to them.  The upshot of these multiple efforts were described as three freedoms

* Freedom of security: credit unions have their own unique cooperatively structured  insurance safety net (NCUSIF) and liquidity fund (CLF).

* Freedom to compete: credit unions could now make their own business decisions on products, services and interest rates for members;

* Freedom to serve: credit unions now decide who their membership will include (FOM choice).

Cooperative  design combines individual choice in an interdependent-cooperative financial system founded on self-help, self-governance and self-reliance. Not private capital or ownership  or government subsidy.

By 1984, the foundation had been set for a quarter century of  deregulatory leadership by cooperatives until the regulatory backlash from the 2008 financial crisis.

With its focus on personal financial opportunity, credit union purpose promotes  the country’s founding pursuits  of life, liberty and happiness.  Cooperative choice is a special American innovation entered though Lazarus’ golden door.

A Sleeping Giant Within the New Colossus

In his many credit union presentations, Ed  Callahan described credit union’s future potential as a “Sleeping Giant” or “America’s best Kept Secret.”

This was also a vision in an American folk and labor protest song written in 1948 by Les Rice.  He was an apple farmer in Newburgh, New York, who also served as president of the Ulster County chapter of the Farmers Union.

He wrote a song out of frustration during the post-WWII years. As small-scale farmers were being squeezed by large agricultural corporations that dictated the prices for produce and overcharged them for supplies.

The lyrics in The Banks Are Made of Marble contrast the  labor of working-class people, including farmers, seamen, and miners, with the vast wealth of the banking and corporate elite.

The repeating chorus points out the stark inequality: the vaults are filled with the wealth that the working class sweated for, while real people struggle.  The last two stanzas predict the rise of banks owned by the people:

I’ve seen my brothers working,
Throughout this mighty land,
l prayed we’d get together,
And together make a stand.

Then we’d own those banks of marble,
With a guard at every door,
And we would share those vaults of silver,
That we have sweated for!

(https://www.youtube.com/watch?v=umMTkHnnJag&t=13s)

 

.

Posted on

Credit Unions and America’s 250th Anniversary

As we head to this Saturday’s national celebration, this week’s posts  put credit unions’ role in the context of the country’s ongoing pursuit of “life, liberty and happiness.”

The country’s fulfillment of its ideals has not been a straight line for either individuals or our collective accomplishments.  Independence and interdependence in our common life often seem at cross purpose.

Credit unions operate in an economy dominated by capitalist ownership and the incessant drive for financial success, individually and corporately.   The cooperative way is a decision we must actively choose for ourselves.

As one commentator observed:  It is almost impossible to turn away from what seems like the only game in town (political, economic, or religious), unless we have glimpsed a more attractive alternative. It’s hard to imagine it, much less imitate it, unless we see someone else do it first.

Cooperatives are designed to meet individual needs with collectively managed resources in a democratic structure.  Theory and practice unfortunately do do not always align in specific cases.  As in the country at large, credit unions must constantly strive to achieve their goal of enhancing members’ economic freedom.

Doing the Right Thing and  Me-First Ambitions

Credit unions’ ongoing challenge to be an alternative to the dominant ethos is not new.  It is a struggle for individuals in all generations as described in this story-poem.

Grandma Shorba’s Ragamuffin Stew

by Freya Manfred

During World War II, Grandma Shorba
handed plates of bread and meat to strangers
who asked for work in exchange for food.
After chopping wood and mending fences,
the lean, stoop-shouldered men went on their way.
“May God watch over them,” Grandma said.

I was glad I didn’t have to follow them
down the long train tracks silvering west.
I didn’t want to sleep beside a strange campfire
around the bend, in the next world.
But I worried how they’d survive, and asked
my parents if they could live with us.

My begging only made everyone nervous.
Maybe Grandma’s stories of The Good Samaritan
and the Loaves and Fishes weren’t true?
If I’d been in charge, I’d have asked those men to stay—
but Gramma, who trusted God,
fed them, then sent them on their way.

The Eternal Striving for an Unclouded Day

We all have a dream in which life’s contradictions are resolved.  A home where we don’t have to face all the ambivalent choices of life  This dream of perfection. of “a city on a hill”  motivated America’s founders.  Credit unions are one example of searching for this “home where no storm clouds roam.”

Credit unions are  a uniquely American accomplishment.  In just over 100 years  an alternative, member-owned financial choice is thriving in a system dominated by privately owned, profit making institutions.   And in doing so they constantly strive to bring  “unclouded days” for members.

(https://www.youtube.com/watch?v=CE3nN6IvlGA)

 

 

Posted on

Credit Unions & America’s 250th Celebration-History’s Lessons

Today credit union  momentum for the 250th birthday of America was interrupted by a Supreme Court decision. The 6  – 3 conservative majority ruled  the President had authority to fire members of independent agency boards established by Congress to be partially shielded from total Presidential direction.

The decision overturned almost 100 years of precedent. It means Trump’s firing of NCUA board mebers Harper and Otsuka will  be upheld by lower courts where the case is on hold.   Trump  may then choose to select two new board members to join his recently nominated Chair John Crews, a republican working in the Treasury Department.  Or he could leave the positions vacant.

This event and its conseqences will be greeted with mixed reactions by credit union supporters.

But history can also provide us perspective to the current moment.  And more importantly, point the way forward.

Not the First Time for President’s Firing NCUA Leadership

On March 10, 1976, Administrator Herman Nickerson, Jr. of the National Credit Union Administration testified before the Senate Banking Subcommittee on Financial Institutions (chaired by Senator Thomas McIntyre) regarding S. 1475. The hearing focused on proposals to restructure the NCUA from a single-administrator agency to a multi-member board.
Nickerson testified that a single-administrator structure left the agency highly vulnerable to political pressure, stating that under his “day-to-day” tenure “you don’t know whether you’re going to take a position that would be your last day in office or not”. He argued that a three-person board would provide better long-term stability and continuity for regulating federal credit unions. 
In the hearing Administrator Herman Nickerson, Jr. was asked about his vulnerability to being fired, and Senator Thomas McIntyre confidently responded by assuring Nickerson that “it would never happen”.
Merely two hours after the hearing concluded, President Gerald Ford summoned Nickerson to the White House and fired him without cause.
March 19, 1976 Office of the White House Press Secretary

————————————————————

NOTICE TO THE PRESS

The President has accepted the resign.,tion of Herman Nickerson, Jr., as Administrator of the National Credit Union effective upon the appoint ment and quaJification of a succes sor. He was appointed on September 15, 1970. There is no successor to announce at this time.

The Three Person NCUA Board Legislation Approved

Senator McIntyre was reportedly shocked by the firing. He used the incident as a stark, real-time example on the Senate floor to successfully argue that the NCUA must be restructured into a multi-member independent board to protect its leadership from sudden political retaliation. 
This hearing served as a major catalyst in the legislative shift that eventually established a multi-member, bipartisan board to govern the agency. 
(Sources:  Rosemary Hardiman, then a reporter for  CUIS, Gerald Ford Library, AI search for hearing summary)

Today’s Response and the Future of Credit Unions

The three person, independent NCUA board was intended to moderate the extreme policy fluctuations if every President could choose to appoint new regulators who would then implement whatever policy  priorities he wanted.
In contrast,  the theory supporting independent agency status was to ensure experienced, knowledgeable board members  would be appointed to protect and promote the public interest not  partisan political agendas.
Only two NCUA board members could be from the same party.  In theory this assured some public debate or even opposition in policy and agency oversight.
The theory worked for NCUA’s first two chairs, Larry Connell and Ed Callahan. Both were experienced state regulators with direct knowledge of credit unions.   While other board appointments would appear more like political sinecures, agency leadership was in expert hands.
The assumptions of industry expertise and apolitical Chairs ended with the appointment of Senator Roger Jepsen (defeated in a re-election effort) to succeed Callahan in 1985.  Rarely have future Chairs had regulatory or credit union experience with the exception of JoAnn Johnson from Iowa.
She had been Superintendent of credit unions for the state and joined the NCUA board in 2002, becoming chair from 2004-2008.  After returning to Iowa she was again Superintendent of Iowa’s credit unions until her retirement in May 2017.
The vast majority of NCUA board appointments have had little to no credit union affiliation.  NCUA’s board appointments have been filled with former congressional or agency staff members seeking continued federal employment. Some have had strong professional credentials (McWatters) but virtually none had prior credit union associations or knowledge.
Credit unions have long abandoned efforts, individually and as a system,  to identify and promote knowledgeable individuals for NCUA positions.
 Both democratic and republican administrations have used NCUA board seats to reward political loyalists versus those with credit union credentials.
In pactice the theory of the independent agency with expert leadership acting in the best interests of credit union members has rarely happened  Instead  NCUA board appointments have become a backwater for those seeking the prestige, or sometimes the spoils, pf a political appointment.

The  Future of Federal Credit Union Regulation

Just as in 1976, there will be a reaction to the current political excesses and  NCUA’s increasing impotence  shaping the future of the cooperative system.
The Agency may become a department with a single administrator within Treasury, like the OCC.  The NCUSIF merged with the FDIC.
The future may be a more cooperative and innovative state support system.
NCUA may be caught up in a sweeping federal government reform post election or post Trump.
Following yesterday’s precedent in this week leading America’s 250th ,  it is useful to express our future hopes for the country and cooperatives in music.  While this was not my original choice for today, it seems to be one approach to future events when  asking  Who shall wear the starry crown?.
(https://www.youtube.com/watch?v=d2LjgalcsVI)

 

Posted on

Credit Unions Learning from America’s 250 Celebration

This week ends with the 250th July 4th national birthday celebration.

It is a moment of community consequence for a country founded on ideals and a vision begun  with the words all men are created. .  .

Our implementation of this founding declaration has been uneven. Even with ever increasing economic prosperity that leads the world.

So this milestone celebration creates ambivalent feelings for many who believe our vision is falling short in critical areas of our national life together.  For example, those whose families came to America from far away and many who believe immigration has been a source of America’s international standing and internal strength.

The Credit Union Parallels

Likewise there are strong parallels in today’s credit union story which spans  less than half the country’s.

The movement was founded on an ideal that cooperatives could be an alternative to the for-profit capitalist motivation which viewed  consumers as profit centers.

Credit unions’ financial success is impressive.  These institutions are now the second largest depository system in the country with  $2.5 trillion in assets and generations of members numbering in the tens of millions.

However, as financial success is achieved, some ask if the system has lived up to its aspirations.

For in America today, as Jim Blaine stated decades ago, “those who have the least or know the least, pay the most for financial services.”

There have been significant contributions by the movement’s founding  mothers and fathers that have given credit unions a legacy to be proud of and a system that can do great things for individual members and  their home communities.

But as in the country’s celebrations, there are concerns that the founding ideals are being lost.  There is increasing evidence that in some credit unions, and as common practice in many, the impact  is to actually widen the gap between those who are well off and those  who live on each pay period’s income.

Reasserting the Things that Make Us Special

To address any ambivalence you may feel  about either our country’s or our movement’s histories, or current challenges, I want to select music that honors our aspirational goals as a nation and as individuals.

When words are sung, their meaning is amplified and transformative.

Visions never die.  They lie dormant until leaders arise to challenge our ambitions, to call us to our higher selves and  to ignite hopes that spark everyone’s individual pursuits–of life, liberty and happiness.

A Credit Union Anthem

Here is an anthem for the credit union movement’s collective purpose: Hard Times Come Again No More.  Written by Stephen Foster in the 1850’s, it addresses the cycles of economic reality and the collective willingness to help each other when these circumstances occur.

(https://www.youtube.com/watch?v=5Fddr0CTflQ)

 

Posted on

Do Plants Have Feelings?

At a recent reunion a colleague told a story of his granddaughter’s college interview.  The panel was professors and tutors from the college.   Her area of study was liberal arts not science.

How might you or your grandchild have answered?

She paused  for a time, then said: ” I don’t know the answer. But here is how I would  test to determine what might be the situation.”

She was admitted to the college.

Many personal decisions and  business options do not have factually provable answers.  Such as 1 + 1 = 2.  Experts, analysis, prior examples and other  learning can suggest possible options.  But ultimately many outcomes are unknowable and require  reflective judgment.

A Credit Union Example

Last week a credit union professional asked,  do credit unions have too much capital.?  He provided no background, just the question.

I asked several credit union leaders how they would respond. Their universal answer:  “it depends.”  They said each credit union’s circumstances are different–the member base, the area’s economy and multiple other factors. .  This is something each credit union must determine for itself.

This may be procedurally correct. However, is there a conflict as the persons  making the  decision  benefit most from overcapitalization?  One former CEO of a large credit union publicly stated that a net worth ratio over 7% is “stealing from the members.”

Higher net worth  takes some of the performance pressures off management and boards.  Unlike public companies, there are no market comparisons forcing them to meet a minimum level of return on equity, or ROE.  This is the primary measure of effective capital management.

Is a more objective standard required? The distribution of capital ratios suggest the question of overcapitalization is widespread.

The Capital Distribution of Credit Unions Today

This is the distribution of net worth ratios for all credit unions at yearend 2025.  NCUA’s rule states that  7% equity ratio is considered well-capitalized.

Net Worth Ratio
      # of CUs at
      12/31/2025
                  Total Assets
13+
                 1,982
$408,743,666,638
12-13%
                    422
$246,934,302,564
11-12%
                    457
$520,062,897,151
10-11%
                    514
$523,027,212,223
9-10%
                    499
$428,895,471,832
8-9%
                    304
$264,042,605,226
7-8%
                    136
$57,902,263,277
<7%
                      61
$7,407,376,727
TOALS
                 4,375
$2,457,015,795,638

At the highest ratio level, 45% of credit unions hold 17% of assets or almost double the well-capitalized rule. A number of these are smaller credit unions,   but there is at least one top ten credit union in this tier.

Most credit unions report annual  increases in net worth, no matter the level, as a success indicator. The common expectation as to how much capital is enough is one word: more.

Because leaders may not know a precise answer, this does not excuse the need for objective processes and relevant comparisons for setting a maximum level and for returning excess net income to members.  Effective capital management begins with ROE.  Pubic markets generally expect outcomes in the 10-12% range as the minimum standard.

Answering Questions of Judgment

Do plants have feelings?  The too much capital question can be answered by every credit union.  The analysis should be transparent for members. It is an example of management’s  accountability to members of their stewardship of the collective savings.

Public presentation of a capital cap is a sign of thoughtful management.  “More” is not a capital plan. Nor is an ever increasing net worth ratio a success.

A cap may even be more important in an era of market exuberance with  bank buys, fintech investing and crypto partnerships announced almost daily. A capital maximum could  bring some much needed discipline in situations where overcapitalization seems to be “burning a hole in management’s pockets.”

 

 

Posted on

The Temptations of Excess Capital

 

When capital exceeds the well-capitalized level (7% for credit unions) organic growth is sometimes never enough to satisfy ambition.  Acquisitions come next.  A current example.

From Jamie Dimon , CEO JP Morgn on organic growth and acquisitions:

 

“If you sit around a lot of management meetings, the first thing they do when they’re not doing well in organic growth is they start to bulls—t about M&A.”
— JPMorgan Chase CEO Jamie Dimon, explaining that he warns his team not to get lost in pipe-dream deal talks instead of improving their own operations.

And yet, Dimon today announced that the bank could consider an acquisition worth up to $20 billion in the next few years now that it has greater flexibility from regulators to spend capital.  WSJ May 27, 2026

Tomorrow’s followup:  with credit unions’ average net worth over 11.3% at March 31, 2026,  do individual coops have excess capital? Are these billions of equity above required amounts fueling bank acquisition efforts? Or fintech investments?

Posted on

Stable Coins, Crypto and Human’s Gambling Urge

A number of economic and business leceaders in this era of stock market exuberance note that many of their peers have never managed through an  economic downturn.  Not just an nterest rate cycle as initiated by the Federal Reserve in 2022 to fight inflaiion.  But an actual recession.

A second potential bubble indicator beyond the stock market’s seemingly unending upward trajectory, is the multiple schemes to get rich-quickly.  These opportunities are based on some virtual digital  innovation with an intriguing but  unknowable future value. Hence crypto, stable coins and other forms of new financial transaction-payment business offerings.

The new CEO of Wells Fargo was asked whether the bank would be offering stable coins for consumers.  His reply was pragmatic.  A stable coin is just putting a wrapper around the US$.  “For countries with higher inflation than the US,it might make some sense.  But the use-case in the US is not clear.  Every time you use it you incur transaction costs.”

The Urge for Crypto

Retired Warren Buffet of Berkshire was outspoken inhis views on crypto and virtual currencies..

“Cryptocurrencies basically have no value and they don’t produce anything… In terms of value: zero.” (CNBC, 2020)

In this 2023 CNBC interview   Buffett explains the consumer and market fascination with digital options as another example of the human desire to gamble,.  Humans have an impulse to to take a chance on winning big even when all odds are that will not happen.

(https://www.youtube.com/watch?v=vGVt8Y2ZdWI)

Everybody Wants Your Money

This is a trailer for a recent movie on the crypto environment:  Everybody is Lying to You for Money:   

(https://www.youtube.com/watch?v=DZR7LncSmEE)

McKENZIE-the film’s creator:  Crypto is only good for two things: gambling—is the price going to go up or down?—and crime. The amount of crime that crypto facilitates is staggering. There’s a crypto company, Chainanalysis, that estimated $154 billion of criminal activity was facilitated via crypto last year alone. There’s the bubble idea that the price could, over time, keep going up, as new people flock to crypto as the story continues to spread. And then crime gives it a use case, a reason to be valuable.

The Appeal of Change

The future will be different than today.  Many physical aspects of our world will undergo makeovers and upgrades.

As stewards of member resources and community investments, the challenge for coop leaders is what changes are based on long understood core values; and what new enterprises rely or prey on human shortcomings.

Are crypto and stable coin “assets” adding to a community’s future or merely facilitating member participation in a gigantic, universal digital game?  Is this an area where your credit union should educate versus coordinate member experimentation?

Posted on

Which Priority Matters Now?

The 2026 irst quarter TrendWatch update from Callahans was a very positive description of a financially sound cooperative system.   Here are two slides summarizing key macro trnds. The full slide deck is here. 

 The  balance sheet is strong and gowing.

The income statement shows strong net margins and rising ROA.

Two of the five takeaways by Callahan’s staff were:

Consumers Need Support Now More Than Ever

The commentators  referenced the economic stress citizens feel with a 3.8% CPI increase; the majority who feel their financial circumstances are getting worse; and the K-shaped economy in which stock market’s gains are going primarly to those already well off, not those liiving on their weekly paycheck.

 Now Is The Time To Build Capital And Invest Strategically

With net worth at 11.3%, or over 400 basis points above the 7% well capitalized level, should credit unions continue to add more to retained earnings?

With multiple options, how  should credit union leaders allocate their success between these two priorities?  How would members view this decision?

 

Posted on

Three Comments on the State of Credit Unions

From a retired long-serving CEO observing mergers and governance issues:
We need an S in CAMEL to put the member back in first place among the things the credit union is rated on and that justify the tax exemption. 
We need to allow the state in which a credit union operates to regulate how it operates rather than allow an out of state regulator to make the rules. 
We need to limit compensation for directors, we need to mandate elections, we need to reduce the number of signatures to run for the board and do all we can to make nomination easier and to ventilate board elections, we need to have minimum quorum of members at an annual meeting, either in person or virtual to be some percentage of members.

The Cooperative Advantage

I am motivated by customer-owned models that will always respond to the lifetime needs of my community whether it be culture or tactics FIT to the evolving now of the ownership’s bond.
How are coop financial models more resilient than for-profit private ownership?

For-profit firms always have one foot in the grave via maximizing their liquidation values via the speculation of being compensated for a change of ownership.

At its core,  cooperatives assume a life cycle vision of an infinite marriage with the consumer’s need for a voice in the ownership of their communities’ focus and evolution.  My voice in my community.  (from a cooperative entrepreneur)

A Question for  Credit Union CEO’s from a CEO

If a credit union improves its capital ratio while its members’ average credit score drops, did it have a good year?

We don’t have a standard way to answer that and I think that’s a problem.

Financial health metrics for institutions are mature, required, and reported quarterly. Member financial health metrics are voluntary, inconsistent, and often absent.

To my credit union colleagues:

If you were building a Cooperative Health Index what would you put in it? Or if you already measure whether members are better off, what data do you look at?
NOTE: I’m looking for outcomes produced, like debt reduced. Not programs offered, like free financial coaching.
(from Sarah McNeil, CEO, United Trades FCU)