Category: Cooperative Design

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How Should Coops Measure Member Wealth: The Mean or the Median?

For over a year in their quarterly Trendwatch industry uupdates, Callahans has shown long term trends using both average ratios (the mean) as well as the median for industry level performance.

The mean is the weighted average outcome for all credit unions.  Obviously this approach gives more significance to larger institutions’ trends versus smaller.  The median shows the middle number where 50% are below and 50% are above the number being tracked. Here are two examples of these  analytical outcomes:

 

Callahan’s graphs illutrate these different  ways to present data.   While overall trend lines  may look similar, there is a real difference when interpreting individual circumstance  or peer comparisons.

The Impact for Credit Unions Member Analysis

Yesterday the web site Visual Capitalist published a chart that ranked the 30 Richest Countries in the World by average wealth per capita, that is total wealth divided by population.  The second ranking presented the mean or middle total for per capita wealth.

As one might expect America ranks second in average wealth at $695K per person, behind first place Switzerland at $910K.   America’s economy has long been one of the largest in the world in total and per capita. No surprise there.   On average Americans are well off.

The second column tells a different story.   When ranking by the median, the US number is  $69K per person.  That is 50% of population has less than that amount and the other 50% more.  That number places the US in 28th position out of the 30 countries, just above Greece and Germany.

No other country of the 30  in the UBS Glpbal Wealth Report ranking for 2026 had such a radical difference between the the mean and median average wealth per person.

The US reports the widest distribution in the  wealth ownership  gap between the very wealthy and the rest of the population.

The Credit Union Implications

This is not a new finding.  But it shows the extreme difference when placed in the context of other wealthy nations. Moreover, in America this wealth distribution disparity is growing.

In credit union analysis member participation is often calculated.  The result is frequently referred to as the 80:20 rule.  That is 20% or a small number of members contribute 80% or more of loans or deposits balances. These generally better off members are a much sought after class by all financial providers because of their impact on the firm.

But is an 80:20 outcome in member relationships where the credit union model is most effective?  Has your credit union looked at the mean and median income or net worth distribution of your members? Or in the market(s) you serve? Is the marketing priority to gain more profitable, higher balance  members or grow across all income levels?

The critical question is whether credit union business models and practices are contributing to and worsening the wealth gap, or trying to improve community equity?  Does a credit union’s fee structure, loan pricing policy and savings rates favor the well-to-do?  Do the less well off pay more for loans and earn less on their smaller savings balances?

One former credit union CEO who worked tirelessly to ensure there was not a wealth bias in the coop’s practice was Jim Blaine when he led SECU NC.  With his approach the credit union became the second largest in the country.  Pricing and fees were equitable for every member.

Measuring mean and median member income could be one of the most important indicators of credit unions fulfillling the movement’s public duty justifying its tax exempt status.  Or it might indicate the constant pull and siren appeal of the greater market’s for-profit forces.

How credit union’s respond to America’s growing disparity in its  distribution  ever increasing wealth could determine the movement’s future, that is either profit or non-profit.

 

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A Story that Illustrates an Entire Credit Union’s Mission

Sometimes a simple story can portray an entire philosophy, strategy or organization’s culture. No corporate manuals, strategic plans, or even special training sessions are needed.

For example in the Bible when Jesus says his second great commandment is to love your neighbor as yourself.  His critics ask, Who is my neighbor?   Jesus then tells the story  of the Good Samaritan.  It is about a traveler attacked and robbed by thieves, and left injured  lying alone on the road.  His fellow countrymen pass by. He is helped by a stranger, who is not from his country, religious tradition or ethnic background.

The following story  is the lead in a CEO’s monthly staff update.  It is long because the event was extended.  If you knew nothing more about this credit union other than this episode, you would surmise that it is probably very successful in traditional performance measures.  It is, but that is not the primary purpose. It succeeds because of a culture that tries to fulfill the special purpose of a cooperative charter for its members and communities.

My only edits are to protect the individuals named and the credit union’s identity.  I  would call it the story of A Credit Union Good Samaritan, because as in the original, the person assisted was not even a member of the credit union.

From a Cooperative CEO

This month’s story highlights Mary, a long-time shared-branching customer supported by Rose at our Central Avenue Member Center.

Mary is associated with an out-of-state shared-branching credit union and visits our location about once a month to withdraw a small amount of money. As an older individual, she prefers managing her banking in-person and occasionally stops in for general assistance. Over time, Rose developed a strong, trusting relationship with Mary.

One afternoon, Mary arrived visibly distressed. When Rose asked how she was doing,  Mary shared that she was feeling overwhelmed. She requested her account balance and withdrawal limit, and upon hearing the details, her anxiety seemed to increase. Mary mentioned needing to make a phone call to confirm something and stepped into the lobby.

While on the phone, Rose could overhear parts of the conversation. Mary sounded frustrated and repeatedly referenced taking cash to Walmart, which immediately raised concerns. After ending the call, she returned and requested to withdraw the maximum amount allowed.

Recognizing several red flags, Rose began asking thoughtful follow-up questions. Initially, Mary was hesitant to share details, explaining that she was sending money to her granddaughter. With patience and care, Rose continued the conversation, and Mary disclosed that she had been on the phone since early that morning with someone claiming to be from “FCC Loss Prevention.” This individual told her there were suspicious charges on her account and instructed her to withdraw funds to resolve the issue.

At this point, Rose explained the warning signs of a scam and expressed concern that the situation did not seem legitimate. Although Rose could not directly access Maary’s account because she is not a our member, she encouraged Mary to contact her home credit union using an official phone number to verify the claim.  Rose explained that if there were legitimate concerns, her credit union would be able to confirm and secure the account.

Mary agreed and returned to the lobby to make the call. As the situation progressed, Rose realized Mary had never fully disconnected from the original caller. The scammer quickly adapted their story, now claiming to be from Mary’s credit union after overhearing the conversation. Rose could hear Mary  beginning to question the caller, asking how to confirm their legitimacy, while the scammer continued to pressure her to withdraw funds and go to Walmart.

Seeing Mary becoming increasingly overwhelmed, Rose stepped in. She located the official contact information for Mary’s credit union, asked a colleague to cover her station, and invited Mary into a private office so they could call together. First, Rose ensured that Mary had fully disconnected from the scammer, despite being told not to hang up.

Together, they contacted Jean’s credit union directly and confirmed there were no unauthorized transactions or issues with her account. The credit union also shared that they had seen an increase in similar fraud attempts. Fortunately, because Mary had not shared sensitive information, no further action was necessary beyond documenting the incident.

Afterward, Rose helped Mary save her credit union’s official phone number in her contacts and block the scammer’s number.  Mary expressed deep gratitude, sharing that the scammer had attempted to convince her to withdraw and send nearly $11,000. She acknowledged that without Roses intervention, she likely would have followed through.

This experience reinforces the importance of vigilance, empathy, and proactive service. Protecting individuals—whether they are members or not—requires awareness, patience, and a commitment to going above and beyond.

This is a powerful example of how our credit union lives out its mission and purpose every day. Through care and compassion, you transformed a moment of fear and confusion into one of hope, stability, dignity, and safety for someone who needed it most.

 

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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)

 

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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)

 

 

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The Limits of Virtual Meetings and Relationships

One of the vital initiatives  Ed Callahan took as Chairman of NCUA was to take the monthly public board meetings “on the road.”  Over a period of two and half years, public  board meetings wewre held in all six regions. Often in locations that coincided with already planned league or national conferences.

For example the July 1982 board meeting was held in Chicago  at the same time as NAFCU’s annual meeting. That was the same weekend that the Penn Square bank failure occurred.  Because of credit union investments with uninsured Penn Square Bank CD’s, the Board meetingt attracted widespread interest.

Constituents Meeting Their Regulators

The purpose of these outside the beltway public events was to give credit unions a chance to attend meetings and see the board at work. In addition the visits often involved credit union conversations, local newspaper interviews, all which raised the profile of the credit union system and  the movements embrace of deregulation. The visit from DC raised the profile of an areas  credit unions and their contributions to their  their communities.

These interactions created awareness of NCUA’s activity and leadership.  It gave senior DC based staff direct conversations with credit union leaders on their home turf and in the various economic circumstances around the country.

Each board meeting was followed by an open press conference where Chairman Callahan and staff would answ questins from the media and credit union attendees.

Today’s Public Meetings

Yesterday’s NCUA board meeting was broadcast live, an effort going back years and accelerated by COVID’s cancellation of inperson events.  It is a practical way for many to watch a distant public meeting live or later by video.  While interaction is not sought, the slides and other presentation data can be downloaded by viewers.

Decades later this board live broadcast have replaced the on-the-road visibility which was discontinued after Chairman Callahan’s tenure ended in 1985.

But does it make a difference whether Board meetings are viewed via digital broadcast or in person in a physical serrting?

Why In-Person Matters

Tim Calkins is a marketing professor at Northwestern University’s Kellog Management School.  He uses remote learning sessions in both his class room lectures and private consulting assignments.

The Covid epidemic nade virtual delivery a necessity.  The use of remote, live virtual meetings has continued as an accepted option for many organizational inernal management meetings as well as public events such as member annual meetings.  Sessions can be  interactive and seemingly similar in content to in-person events with the same purpose.

Moreover, virtual  events can be a more effective use of time by both presenter(s) and participants.  No travel, recordings can be made at once, and AI edit summaries produced.  The reach can be  unlimited by audience size, location, or time zone.  What’s not to like?

Following is Tim Calkins’ assessment of why in-person still brings benefits that virtual sessions cannot duplicate from an article he posted last week:

The Project
Over the past quarter, I’ve had the chance to work with a leading company on a competitive situation. There were new entrants in their industry and the company was formulating a response. This was partly a strategy question and partly a political question: getting the team and the senior people on board.

I did the project remotely. I taught a class session for the team on Zoom, had multiple phone calls and then participated in two team planning sessions in a hybrid format.

The Problem
The project is winding down, and I’m not feeling great about it. I think I made a positive contribution, but not as much as I could have, for a very simple reason: I wasn’t there.

This wasn’t a problem for the class session; I can teach effectively on Zoom. It was definitely a limitation in the work session.

There were lots of problems with being remote. The first issue was that I couldn’t hear much of the conversation; I was picking up about 60% of the discussion. I could follow along but I missed some of the context. Then, it wasn’t easy for me to jump in; I didn’t know how I was showing up in the room, so I found it awkward to make a comment. I also couldn’t read the room. I couldn’t see how my comments were being received. Were people nodding and agreeing? Or rolling their eyes?

Perhaps most important, I wasn’t there for the open times: before the meeting, during the breaks, after the meeting. These liminal times are critical when it comes to influencing and building relationships. During a break one can follow-up on a comment, ask a question to clarify a point or just build a relationship.

In hindsight, I should have insisted that to take on the project, I had to travel to the company for the key meetings.

I didn’t do this because my schedule has been hectic, so travel would not have been easy. And the company didn’t request it; they routinely did hybrid and remote meetings.

The Learning
My takeaway is simple: don’t do a strategic project if you can’t be physically present.

I don’t need to take on company projects; I only accept a new program when I think I can add value and will learn something.

Going forward, I’ll pick and choose with a bit more care. I’ll still teach remotely, but I’ll only do strategy working meetings when I can be in the room.

The Opportunity for NCUA or Any Board with Public Accountablity

Might a new NCUA Chairman revisit the idea of taking Board meetings on the road?  Such events could accelerate relationships, learning about local credit union circumstances and most importantly, building trust that can only be created person to person.

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Kyle Hauptman’s Final Call as a One-person NCUA Board

If Senate hearings proceed as planned and Trump’s nominee for the next NCUA chair is approved, todays board meeting will be Hauptman’s final time as NCUA’s solo leader.

As he departs,  NCUA situation is like a suitcase without a handle, or wheels.  The agency is being led by a single person, not the prescribed board.  Its operataing capacity has been reduced by a DOGE induced, staff designed elimination of 20% of its workforce.

Flooding the Zone

Hauptman’s major initiative has been to “flood the zone” with over a dozen regulatory revews  addressing such urgent issues as banks purchase of credit unions versus the operational realities of credit unions purchase of banks.

The agency continues to publish  a repeating loop of bureaucratic processes such as banning people from further activity in credit unions or periodic issuance of credit union data.  When the nexr administrator opens the suitcase, he is likely to find little addressing critical cooperative  or administrative management issues, e.g. the effectiveness of agency examinations.  One indicator is the growing list of summary liquidations from sudden discoveries of significant, long term large operating deficits.

Hauptman has held board meetings “only as necessary.”   His solo tenure of almost 15 months is an example of the shortcomings of a single administrator  without either credit union context or regulatory experience.  However that resume gap is not unique to him.

The Knowledge GAAP

Such appointments, especially as Chair,  mean the learning curve for new leadership is extended and  there is total dependence on the bureaucracy’s agenda.  More critically, there is a lack of relationships and knowledge of the credit union system and its different leadership elements.   It narrows the understanding of issues from both an historical perspective as well as key differences about current system priorities.

The result is that the cooperative system’s uniqueness and capacity are underestimated.   Critical issues are viewed from the more familiar perspective of the banking system.  And the siren call of some lobbyists for the false standard of “parity” becomes a basis for decisions.

A Vacuum in Dual Regulatory Oversight

There has been a vacuum in regulatory leadership at both the state and federal levels for some time.  It is hard to think of a comment or action taken in either system that addresses important trends and issues in a considered manner. The issues silently observed include purchases of banks, the merger frenzy driven by CEO payouts, the absence of real member governance rights, and zero transparency in credit union strategy and cooperative accountability to owners.

Leading NCUA is not a one-person job,  It requires  both administrative oversight plus  constant  dialogue and initiatives with credit unions, collectively and individually.

An Empty Suitcase

Right now NCUA’s suitcase is pretty light.  It may be easy to lift without a handle.  But sooner or later the movement will experience the consequences of a regulatory system that  has no cooperative agenda or engaged oversight.

As the regulatory grasp and  staff effectiveness erode, this will  create a series of reactive responses to ideological/political priorities or to inevitable external problems or crisis.  The system will be at the mercy of events without informed and committed regulatory leadership.

 

 

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A Different COOP Growth Mode or The Real Thing?

In  the CEO’s words:  At Good Neighbors we do not have a “growth” strategy; we have a “strength” strategy. Which is to say that we are not looking to increase members by numbers but instead are trying to grow members intentionally by focusing on those who are philosophy/mission aligned and who want to participate as owners. This is because we no longer have exclusively our closed SEG group and are instead tasked with building our own common bond.

Co-op fest (Buffulo) is a great opportunity to meet others in the area who are like-minded and tell them about the credit union. My friends at Cooperation Buffalo call these people the “coop curious” – people who are open and interested in learning more about cooperatives.

We participate in the Cooperative Fellowship.

From that website:

Cooperative Changemakers: A Community Power Fellowship is an intensive 11-week training for cooperative entrepreneurs and advocates building an economy that puts people first.

Cooperative Changemakers aims to activate and empower those interested in joining and contributing to Buffalo’s growing cooperative community. The Fellowship fosters collaboration, knowledge sharing, and the development of skills essential for building democratic power in our communities.

Participants have the opportunity to engage with local cooperators and develop actionable plans to bring their visions to life. The Fellowship seeks to cultivate a vibrant and engaged community of cooperative entrepreneurs and advocates, driving positive social and economic change in Buffalo.

Source: Thank you Emma Smalley, CEO, Good Neighbors Credit Union

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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.”

 

 

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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?

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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?