Category: Co-ops in Capitalism

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What Does Your Banner Say?

I took this picture in Bethesda yesterday.  Where do you think this banner is hanging?  The local primary school, our town hall, outside a car dealership, a grocery store, a CVS drug store, or maybe a bank?

It is in the front yard of St. John’s Norwood Episcopal church.  You probably guessed this from the picture.

St. John’s has an active community presence.  My wife has volunteered at their Opportunity Shop for two decades.  A group within the congregation holds regular fund raising efforts for Ukraine in partnership with nearby St. Andrew Ukrainian  Orthodox Cathedral.

Last week the two churches held an Easter bake sale that raised $8,600.  The week before there was an appeal for 200 civilian tourniquets at $100 each.  In three days they collected over $4,000.

Welcoming the stranger,  you might say, is what churches are supposed to do. Right?

A Shared Value

That welcome is also one of the foundations of America as a land of hope and opportunity.  For at one time in our family histories, we were all strangers to this land.

Americans by and large take pride in their roots elsewhere.  In our family the kids trace their heritage back to the Scots-Irish, China, Africa and Missouri.  Why Missouri?  That’s where my Mom and Dad went to get married after Pearl Harbor because there was no required waiting period as in Illinois.

American businesses, such as Ancestry.com and 23 and Me, were created to help us trace our many heritages.  Families sometimes refer to their Mayflower or Daughters of the American Revolution relatives.   We are all immigrants for one reason or another.

However national daily events  are undermining this core American ideal and strength.

Transactions Versus Values

Would your credit union put the above sign outside your main office? Some have sought to serve recent arrivals even using alternative identification numbers.

But credit unions compete in a capitalist society in which dominance and control are sought and celebrated.  The deal maker is now as honored or more so than the entrepreneur.

Credit unions were designed as an alternative to this drive for power.  The industry’s top public policy priority at the moment is to protect their tax exempt status.  This was granted to reflect the non-profit purpose of serving those whose needs were unmet or taken advantage of by profit driven firms.

Values were core to this purpose.  Individuals could find personal economic opportunity through a cooperative structure they owned and directed.

But market realities and personal ambitions have a siren allure that is hard to ignore.  Here is the latest press release of this cooperative drive for market dominance headlined with the words:  A Powerful Partnership

San Diego, Calif., (April 11, 2025) – In a move that would change the financial landscape of Southern California, California Coast Credit Union (Cal Coast) and San Diego County Credit Union (SDCCU) have announced plans to merge, pending regulatory approval and a Cal Coast membership vote.

Upon approval, the combined credit union will boast a powerhouse organization with assets totaling nearly $13.5 billion, 65 branch locations, and more than 1,400 employees serving members in Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo, Santa Barbara, and Ventura counties. The organization will remain the fourth largest credit union in the state and become the 16th largest in the nation.  (emphasis added)

Size, power,  dominance, strength, resilience are all elements of a transaction versus a value motivation.

Both institutions are financially strong, viable, creative and successful.   However the cooperative merger math is that 1 + 1= 1.   No longer are their two boards, two management teams and business strategies seeking to better serve their longtime member-owners.   Not a single benefit is listed that is not already available for a person choosing to join either credit union.  The industry has in fact reduced not expanded its reach.

The Stones Will Cry Out

One would hope that the long standing service of these credit union directors would have given them some insight into what makes credit unions different and successful.  It is not size, ranking within their state or nation, or even the number of branches or ATM’s.

Values inform purpose.  Together they can make credit unions a force to serve where for-profits will not.  Without these integrated in the institution, the cooperative difference is lost.

Values are talked about at funerals.  I attended performances of Brahms German Requiem this weekend.

Two English translations summarize the realities we all face:

“All flesh is as the grass, and all the glory of mankind is as the flower of grass.  For the grass withereth and the flower thereof is fallen.”

And in case we miss the point, “Verily mankind walketh in a vain show, even his best state is vanity.”

The sign above has a little noticed two words in the lawer left hand corner.   It says “Faithful America.”

The Brahms Requiem and two words on the banner remind us of our transient and transcendent opportunities. If we are silent in these moments of responsibility, one  prophecy  says the “rocks will cry out” the truth of our behavior.  What sign will you put outside your credit union?

 

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Our Moral Moments

When Jim Blaine was CEO of SECU(NC) he was sceptical of his peer’s elaborate strategic plans.   Instead he offered his mimalist version as follows:

Vision:  Send us your Moma.

Mission: Do the right thing.

These were guiding principles for how to serve members as well as evaluate tactical business options.

I was reminded of this simple guidance when reading the following “bettter deal” story from a CEO’s update for the staff and board:

Another member, Jessie, was set on purchasing a vehicle from Carvana for $19,880, even though its actual value was $15,300. While he was still willing to proceed, I wanted to ensure he got the best deal.

After a quick search, I found the same vehicle, in the same color and trim, but two years newer at a local franchise dealer for the same price. The vehicle was priced at its actual value, making it a far better investment. Jessie ended up purchasing the newer vehicle and closing through CUDL, securing a much smarter deal.

These are Not Normal Times

Yesterday another administration error was corrected by the Supreme Court which ordered that a migrant mistakenly sent to El Salvador be returned to the US.  The administration denied it had the power to do so.

Senator Cory Booker recently spoke:

“These are not normal times in America, and they should not be treated as such. This is our moral moment. This is when the most precious ideas of our country are being tested….”

As DOGE has now moved into NCUA, it is important to remember Booker’s assertion that,  “In this democracy the power of people is greater than the people in power.”

The Wrong Part

While resignations on principle, the dismissal of career federal employess and wholesale demolition of federal government departments may  seem remote or even necessary to some, the continued destruction of government services will ultimately negatively affect every American.

But we need look no further than credit unions to see how hard it is to follow Jim Blaine’s simple maxim to do the right thing.

CUDaily founder Frank Diekmann recently wrote an opinion piece Lots of Questions About Mergers. He .summarizing the multiple motives given members including examples of questionable accuracy:

The vague claims about “more products and services” and “better rates.” The big payouts for some management teams and nothing for the members. Whopping amounts of net worth just being transferred to the acquiring CU. And relatedly, a question that is never answered: if you’re lamenting you just couldn’t offer certain products and services, why didn’t you tap into some of your deep pile of capital? 

Also related, and a question I wish I could ask of many CUs: where in the world has the board been over the last few years or decade?

Our Moral Moments

What we are seeing in our public and professional lives show the inevitable challenge every person encounters at some point.  Perhaps more than once as we grow through stages of increased responsibility and accountability.

We all believe in our hearts we will do the right thing when necessary.  Unfortunately many others rely on a reality that “everyone has a price” with which they can be induced to go along.

Author and spiritual leader Richard Rohr described this human circumstance as follows:

It may not be in our power to determine how things will unfold, but it is in our power to decide how we respond. It is in our power to hold on to the practices that nourish us, inform us, and give us courage. It is in our power to remain in integrity, to choose nonviolence and noncooperation in the face of all the wrongs we are seeing. 

The beginning of a way out is to honestly see what we are doing. The price we’ll pay is that we will no longer comfortably fit in the dominant group!

Doing the Right Thing may not put you in the dominant group.  Remember that your ability to resist is because others gave you the personal wherewithal to both see and chose another way forward.  That is the individual foundation which all institutions require to survive.   We call that personal responsibility democracy.  It is how we achieved the freedom we share today.

 

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With Whom Do You Share Your Brand?

One of the truisms about branding is that grreat companies create great brands.  Brands do not build great companies.

Tim Calkins is a markeing professor at The Kellogg School of Northwestern University.  He publishes a monthly newsletter, Strong Brands,  providing contemporary  examples from his classroom.

The latest edition includes an update on Tesla, a brand he has written about before.

Tesla
In my last post I wrote about Tesla’s brand repositioning. Things seem to only be getting worse and sales were sharply down in the first quarter. News that the Proud Boys are now showing up at Tesla dealers to show their support will only further polarize the brand.

Driving a Tesla has always been about making a statement. I suspect supporting the Proud Boys wasn’t the statement most Tesla buyers were trying to make. 

Credit unions have both individual identities as well as the generic reputation of being a different kind of financial institution.   What one credit union does well or becomes a front page story,  affects the cooperative system’s brand.

Just as important the individuals and organizations a credit union decides to work with or to support affects their reputation with their members and the communities they serve.

As credit unions decide their NIL relationships, the business partners they seek to serve, and the community events they support, they are creating a reputation much greater than a financial service option.

As boards consider whether to facilitate digital currency options, the sale of marijuana or vape products, or finance options such as interval vacation  ownership, consider the impact on the “brand” the credit union is presenting  members.

When a credit union offers  a special financial product or specific business loans, it endorses that activity.

For example is now the moment to promote a special financing option for the purchase of Teslas?

As in life, what credit unions do with members; money always speak louder than the latest PR or messaging  campaign.

 

 

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The Power of Questions. . . and Answers

This past week Senator Cory Booker stood in the chamber for over 25 hours delivering a powerful call for the  people to challenge the Trump administration’s threats to democracy.

It was an heroic physical commitment to ignite awareness of the critical political tests facing the country.

He described this time as our moral moment with America’s fundamental values on the line.  It was a call to the conscience of a nation.

Our democratic capability for change he summarized  as the power of the people is greater than the people in power.  

Our Moral Moments

 People may or may not agree with Booker’s impassioned call.  But his basic questions are ones every person will encounter in their own experiences.  He asked:

What will define our greatness in the moral moments we face?

What is the role of character?

What would we view as threats to our bedrock commitments?

Individuals will craft their personal responses as to what they want to uphold for the communities and society in which all live.

One person who analyzes the special role of credit unions and its abundance of business examples is Ancin Cooley, a credit union consultant. I believe his observation about credit union’s current political circumstances draws us back to Booker’s questions.

Tigers with Amnesia

In reflecting on the history of the credit union movement, one fact stands out: our strength has always been rooted in our members and communities—not in politics.

From its inception through its adolescence, the cooperative model thrived without relying on the president or Congress to dictate how we serve our members.

Today, many credit unions manage capital budgets that rival those of local governments, underscoring a powerful truth: real power resides within the community we live. Credit Union are tigers with amnesia.

While political wins and advocacy play a role, we must never lose sight of our true source of strength. The idea that credit unions must depend on politics is, in many ways, contrived. Instead, our focus should be on empowering our members and meeting their needs, regardless of which political party is in power.

After all, the cooperative movement challenges both traditional capitalism and political centralization by proving that community-driven finance is a force to be reckoned with.

Senator Booker and Cooley are both asking we carefully consider what we believe in.  What are we willing to stand up for? The actions we take when moral moments arise, will test who we will become.

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Why I Love My Job

From the field. The following examples are from a CEO’s monthly report to staff.  He documents their business strategy to “out-local” the competition.

Serving One Member at a Time

A member called in about his credit card. He stated he falls short on funds every month and has to use his credit card and can’t get out from behind it. He was asking if there is a way to change the payment date.

I looked deeper into this as he is on a fixed income and struggles financially due to always falling short about $60 monthly. I asked him if he had any other debt, and he said he had a couple Affirm loans he got to buy shoes and clothes.

I know we are here for our members, so I told him let’s look at a home equity as he has plenty of equity on the home. Here is where we now stand.

Instead of this member falling short $60 monthly and having to use his credit card we are doing a home equity and consolidating his credit card and his Affirm loans. He will now have an extra $100 monthly to give him some wiggle room. We will also decrease his credit card limit down to $1K to prevent him having easy access to a large amount. This was actually his idea to decrease the card’s limit.

The best part is this member will now have a couple hundred dollars in his pocket out of the loan proceeds and he is getting out of his financial struggle.

Yesterday he called and asked if it was ok to use his credit card for gas considering we haven’t closed yet. He said it’s been tough as he had to use a lot of gas for a trip as he just found out his sister of 77 years old committed suicide.

We just got approval to close on this loan. I’m sending this member a sympathy note and also putting a $10 member appreciation card in it.

At maybe the toughest time in the member’s life we are able to help him and bring some light into this time for him. He is very grateful and says this is changing his life for the better. This is why I love my job!”

Assistance to Members & Non-members Facing Layoffs

Also this month the credit union reported initiatives for local federal and  university employees being laid off.

Messaging was sent to members employed by the federal government, identified through direct deposit data, offering assistance in the event they may face an upcoming layoff.

That assistance could run the gamut from loan restructuring and payment deferrals to budgeting advice and financial solutions based on unique circumstances.

We have 16 associates designated as a Certified Credit Union Financial Counselor (CCUFC) and stand ready to help any impacted member.

The University of Dayton announced the lay-off of 65 individuals and an offer was made to the UD Vice President of HR of similar assistance to those people affected.

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How to Serve Owners: Examples from Two American Icons

Organizations succeed by what they accomplish externally for their owners, not because of superior internal cultures or unique strategies.

As Peter Drucker, management consultant, educator and author, stated, “all results are on the outside,” meaning that the true measure of an organization’s success lies in the outcomes it achieves externally with its customers.  In credit unions these are the owners.

Berkshire’s  Annual Meeting Celebration

Warren Buffett, the founder of Berkshire Hathaway, has overseen a 28% increase in the stock (BRK B) price over the past year.   However, whatever  the company’s return to shareholders, there is a weekend celebration inviting all owners to Omaha to hear from the founder directly.

The event is much like a credit union conference complete with an exhibit hall full of Berkshire- owned vendors.  Here is this year’s Guide to the festivities:

The 27-page guide includes an invite to a 5K race, the location of all Dairy Queen restaurants in the area, plus numerous other sites and information for navigating the three days of events:

The formal annual meeting in the CHI Convention Center is the main event on Saturday.  It begins with four hours of open Q & A questions from the live audience and from viewers on CNBC’s live broadcast.   Buffett, and maybe one or two of his senior staff, will respond to all queries.

The formal  meeting with votes on motions starts at 1:00 PM.   But the owners have their say first.

This meeting is a demonstration of Berkshire’s commitment to put its owners’ interests first.  It is a long standing tradition with shareholders attending year after year.  It is a capitalist feast of business successes and company good will that creates long lasting relationships with the company’s individual shareholders.

Can  member-owned credit unions find a better example of trust, leadership and pride in our movement?   What if Navy FCU or SECU decided to celebrate their success in a similar manner with workshops on personal finance, examples of member owner businesses and a meeting where members had their say?

Such an occasion would be noteworthy for the institution, but more importantly, it would be an example of the cooperative movement having its “Woodstock Moment.”

Giving Member-Owners Choice

A second example that credit unions can learn from is a recent innovation from the Vanguard mutual fund family.

Vanguard is a pioneer in low cost, index fund investing.  Warren Buffett’s advice to young investors singles out Vanguard’s approach as the easiest and most likely successful way to financial wealth accumulation for every day folks.

A second unique feature of the firm is that the  company that manages the funds is owned by each of the individual funds.  In other words it is a mutual coop, not a public or privately owned investment company like T. Rowe Price or Fidelity.

It has recently offered a unique way for individuals who own their funds to directly exercise their proxy voting preferences in the companies in which their fund’s invest.  This is a description of Vanguard’s new “Voting Choice for Member Owned Stocks.”

” It provides a way for you to participate in the proxy voting process by choosing a proxy voting policy that will help direct how your shares in select Vanguard equity index funds are voted on shareholder matters at the companies held in those funds.

Public companies hold shareholder meetings where key issues—such as electing the board of directors and executive pay—are presented to a shareholder vote. Proxy voting enables shareholders to cast their votes without attending a specific company’s meeting.

Investor Choice currently offers five policy options that reflect a broad range of approaches to proxy voting that you may choose to apply to your participating Vanguard equity index funds.” 

One example would be Company Board-aligned Policy.

At the end of 2024, Vanguard had $10.4 trillion under management of which 82% were in index funds.

Vanguard serves over 50 million clients globally.  What kind of technology support must have been developed to allow an individual investor to cast their tiny share of a company’s voting proxy in line with each investor’s preferences?

In the past Vanguard has followed its Investor Advised Funds Policy, a single option.

The Credit Union Takeaway

If Vanguard can empower their  individual investors to exercise their minute share of corporate governance, should credit unions be exploring  options to enhance member-owner preferences? This is more than greater product choices for credit card or varied savings plans.

Some credit unions now give members options for charities to which they can direct interchange income.  But what are other ways members might be willing to participate in options such as funding affordable housing for seniors or first time home buyers?   Is it possible for members to have a say in prioritizing community ventures and partnerships?

Vanguard, a $10 trillion firm with 50 million clients, returned the owner’s proxy voting power back to the individual.  Might credit unions find a way to engage their owners in how their savings and credit extensions are being directed?  Or, as in public company voting, to approve senior executive compensation? Or even in buying a bank?

 

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Internships:  Planting Seeds for Future Employees

Many firms including credit unions offer summer internships as a way to attract college students and introduce them to their firm’s culture and employment opportunities.

One unique organization has a special program that places students interested in cooperatives with internships in the coop sector.   This 501 C 3 is NASCO or the North American Students of Cooperation.

Affordable Student Housing

NASCO’s  primary activity  is working with student- led campus housing cooperatives.  They provide resources, assist in their development, and encourage  participants to remain active  in the cooperative sector. There are over 20 of these housing facilities on campuses throughout the US.

NASCO’s projects would seem to be a natural fit especially for any credit union serving  these campuses.  This activity is also a primary source for applicants in the internship program described below.

Finding Future Leaders

One of the ways NASCO builds future cooperative leaders is their cooperative Internship program.   It functions as a placement service matching interested students with internships for 60-90 days during the summer.

Since the 1980s, this program has connected talented students with cooperative organizations, providing  hands-on work experience.

NASCO  matches skilled  cooperator applicants with host organizations including housing co-ops, worker co-ops, nonprofits, and credit unions.  These short term assignments are intended to be  meaningful projects that build familiarity with  areas such as governance, marketing, finance, and operations.

In turn host organizations have a chance to consider a person’s interest and skills for potential future employment.

The Summer 2025 Program Is Underway

NASCO is still seeking hosts for its Summer 2025 program.  This is a special opportunity for credit unions as candidates have expressed interest in working for a cooperative organization.

Because time is short, I would encourage interested credit unions to call NASCO’s internship manager, Katherine Jennings, at (708) 317-8608, or email at katherine@nasco.coop

NASCO provides interns monthly cohort zoom meetings to connect with fellow co-operators, share experiences, engage in guided discussions, skill-building trainings, or readings tailored to their interests. These sessions deepen their cooperative knowledge and strengthen their future potential role in member-owned organizations.

A complete description of the program is on NASCO’s website here.  Although the site indicates the host applications are closed, I am told hosting  opportunities can still be taken through this week.

There is also the chance to sponsor through grants, the internship network program.  Those options can be found here. 

The Future of the Cooperative Movement

Credit unions and NASCO share common values in promoting cooperative solutions.  The non-profit’s most important service is the affordable housing programs for students on campuses which I will highlight in a later blog.

I would encourage credit unions to reach out to NASCO and learn more about all aspects of ther activities including the November conference in Ann Arbor, MI. The group would seem to be a logical partner for any credit union’s financial  and community investment goals.

 

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A Moderate’s Message on America’s Future

David Brooks (born August 11, 1961)[1] is a Canadian-born American book author and political and cultural commentator. Though he describes himself as an ideologic moderate, others have characterised him as centrist, moderate conservative, or conservative, based on his record as contributor to the PBS NewsHour, and as opinion columnist for The New York Times.

Here is a throughtful, entertaining and insightful presentation given last month in Great Britain on America’s direction.

His purpose is to put the current American angst about current issues into a longer perspective.  He sees our history as a cycle of cultural and political “rupture and repair.”

Of special note for credit unions and cooperatives, is his belief that the current trend is moving away from hyper-individualism to a more communal society.

Our moral formation is at the center of who we are as a people and as a country.

While the talk is a social analysis with several political references, his description captures some of the central dilemmas credit unions as value based organizations are also experiencing.

Credit unions are creatures of the society in which they operate.   You might want to ask if his critique of “elites” in America’s cultural life has parallels in your credit union and the larger movement.

(https://www.youtube.com/watch?app=desktop&v=QSa52TR9tCA)

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It’s the Members Who Have the Power to Bring Change

Uncertainty reigns in Washington DC about the future of federal government agencies and their traditional roles versus the public.

CDFI grants are threatened; minority (democratic) board members of the FTC are fired; agency personnel are asked to submit weekly updates to DOGE on their work. Credit union taxation is on some agendas. NCUA board members spar over OD fees, versus uniting to support the agency’s mission to serve credit unions.

As the political and constitutional events evolve, the outcome will depend on political power.  For credit unions, this is the voting and lobbying efforts of their members.  Every industry “walks the hill.”  Every paid lobbying group makes PAC donations.

But few groups would claim the potential clout of member-owners acting to protect their democratic institutions.

All Politics Is Local

Despite the news from Washington, all voting is done locally.

However, this member constituent power is latent.  Asking for action requires informed  awakening and clear messaging.

An immediate way to activate this process is to engage the members at the annual meeting.  That is where their attention as owners and their role in governance is exercised.

The required annual baord election is the opportunity to affirm their potential political role by making this a real meeting, not a pro forma event.  It starts, as shown in the example below, by showing how their board members are nominated and then voted on as part of the meeting.

The Chair and CEO’s reports should illustrate  their credit union’s special role in members’ lives and in their communities.  When presenting threats to the cooperative model, the members will know what is at stake.  Finally, specific actions they may be called upon to  support their  member-owned financial cooperatives  should be discussed and feedback sought.

Activating Member Empowerment at the Annual Meeting

Here is the lead story in the March 13, 2025 email to members by O BEE credit union.

Transparency and Trust

The link at the end of the article lists the duties of the board, includes an application to be a nominee, and details of the board’s compensation.

Transparency is vital to a credible election process.  This strengthens  members’ awareness of their governance role. When the credit union then asks them to a act as citizens in a democracy, you have already “walked the talk.”  They can trust that you have their best interets in mind.

 

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Videos Empowering Members and their Credit Union

Putting members at the center of a credit union’s story is an art.  When done well, it reinforces the fundamental cooperative difference, especially when an integral part of the public message.

One credit union that does this with great skill  is Whitefish Credit Union in Whitefish, MT.

“God’s Country”

Below is a recent example of their unique video series.  These member centered short films portray individuals’ special interests, the natural landscape of the area, and a broad community purpose being served.

Following is a story by a founder of the Back Country Horsemen on this non-profit’s 50th anniversary.  Their example has extended across the country.  As one person remarks, every state has its own “back country,” even Delaware.

The video makes you want to saddle up and be a part of this ride with this credit union.

(https://www.youtube.com/watch?v=wodQNsu5fSQ)