One CEO’s Most Vital Stewardship Attribute

The example of Boeing Employees Credit Union two recent CEO selections proves the adage that most organizations are onlly two transitions from failure. Not just performance shortfalls, but more importantly the loss or founding purpose and the associated values and culture.

See post: When the Song Fades-Leadership Turnover and the Loss of Cooperative Identity. (Link)

Newly installed CEO’s espeically from outside an organization assume they have been chosen to give new direction from their external experiences, often without first understanding the resources they now direct.

The failures are not due to lack of talent, skills or knowledge, but rather a more fundamental gap, an inability to discern the foundation for the success they inherit. That shortcoming is especially vital in democratically designed organizations such as credit unions:

In democratic organization, It turns out, in the end, there’s only one institutional factor that actually matters: Good character. Everything else in a democratically governed system follows and relies on that simple foundation.

To put the current BECU leadership culture in perspective (link), here is a summary of the legacy that Gary Oakland created upon his retirement in 2012. From a press release by CUNA.

Gary Oakland Wins Wegner Award for Lifetime Achievement

National Credit Union Foundation to Present Four Awards on February 24, 2014MADISON, WI (September 4, 2013) — In recognition of his visionary approach to leadership and extraordinary commitment to the credit union movement, the National Credit Union Foundation (NCUF) is pleased to announce Gary Oakland, retired President/CEO of BECU in Seattle, Wash., as a winners of the 2014 Herb Wegner Memorial Award for Lifetime Achievement.

“Gary is a slam dunk as a choice to bestow the Wegner Lifetime Achievement Award,” said John Gregoire, Chair of NCUF Wegner Awards Selection Committee. “Gary’s contributions to the credit union movement were so obvious as everything he touches turns to success for the average American consumer. It’s evident in the growth of BECU, the state supervision system, dual credit union chartering, Biz Kid$, NCUF, and much more. It’s also an honor to see Gary receiving the award rather than giving one.

Tireless Supporter of the Credit Union Movement
Over the course of his career, Oakland has supported the credit union movement in a myriad of ways. Those include serving on the board of the Credit Union National Association and as board chair for the Washington Credit Union League, the National Association of State Credit Union Supervisors (NASCUS), Filene Advisory Council and Board, and the National Credit Union Foundation. In his time as CEO of BECU, he guided the credit union to provide aid for more than a dozen low income credit unions across the country, often single-handedly locating the funds to keep his fellow members-first organizations afloat in times of hardship.

With his leadership, BECU was also able to play key roles in the founding of two low-income designate credit unions: TULIP Credit Union and Express Credit Union. Oakland also oversaw BECU’s creation of Prime Alliance (now Mortgage Cadence), a Credit Union Service Organization that provides mortgage solutions to approximately 600 credit unions.

“Until his recent retirement, [Gary] ably served as an intellectual thought leader on every important issue facing credit unions,” said Mary Martha Fortney, President and CEO of NASCUS. “Of particular note and importance are his dedication and efforts to make supplemental capital a reality for all natural person credit unions. We are seeing the result of Gary’s work on this issue today as supplemental capital in being considered on Capitol Hill.”

High-Impact Commitment to Member Value Oakland is hailed for his unfaltering dedication to improving value for the credit union member. Exemplifying the effect of this commitment, BECU grew from 108,000 members when he took on the position of CEO in 1986 to over 775,000 members at the time of his retirement in 2012.

Oakland was known for accommodating the needs of Boeing employees and providing guidance in responsible financial practices. He also led the credit union to a statewide field of membership to allow more members of the community to benefit from the credit union advantage: member-focused service with better rates and fewer fees.

While this growth trajectory could have changed the organization’s culture, Oakland held BECU true to its founding principles and the credit union philosophy of People Helping People. In 2006, BECU had an opportunity to return a portion of its reserves to its member base. He instated the Member Advantage account, which reversed the interest rate tiers, providing more return for smaller savings accounts and creating incentive to start saving at a time when U.S. savings rates were at or below 0.

“At the local level, Gary advocated for the member at every turn,” said Rae K. Miles, President of Innovative Resources, LLC. “He changed policy to help Boeing employees when they needed it most and led by example in promoted the importance of thrift to the membership. His ‘people helping people’ efforts went well beyond the membership of BECU.”

Biz Kid$ Spearhead

Among Oakland’s most influential accomplishments was the role he played in the launch of the PBS program, Biz Kid$, an award-winning financial education show for youth. Through leading the production initiative, committing $500,000 initially and $1 million over-all, bringing together a group of credit unions that raised $2.6 million per year, and ultimately making the project a possibility, Oakland has become the face associated with the show’s success.

After five seasons, Biz Kid$ has won 2 Emmy Awards and was nominated for 11 more. It claims nationwide recognition and makes a daily difference in the lives of its youth audiences.

“Had it not been for Gary’s effort, leadership, financial and personal commitment, [Biz Kid$] would never have happened,” said Rudy Hanley, President and CEO of SchoolsFirst FCU. “The result has been overwhelming. After five seasons, 13 Emmy nominations and 2 Emmy awards, the program is being delivered to millions of students through a variety of channels and participating organizations. The stature of the credit union brand has been greatly enhanced thanks to his vision and leadership.”

Steadfast Dedication to Employees

Amidst his countless other commitments and initiatives, Oakland still managed to earn the full respect and gratitude of his employees for his supportive and encouraging approach to leadership. He put his employees before himself and made concerted efforts to urge them to embrace personal and career growth opportunities. As a result of Gary’s compassion and attitude, BECU claims one of the lowest employee turnover rates in the industry and five former BECU employees are now CEOs of other credit unions.

“Gary understands that ‘People Helping People’ begins at home,” said Roger Mauldin, BECU Director. “It was always important to Gary that employees have a healthy work-life balance, be paid a fair wage, receive good benefits and know they are appreciated.”

“Man of Steel” Philanthropist

Described as a “Good Samaritan”, Oakland has left a legacy that extends the credit union philosophy well outside the credit union movement. He is known for his generosity and selflessness as well as a tendency to go above and beyond the call of duty.

In 1995, at a member’s suggestion, he led the establishment of the BECU Foundation, a chartered foundation that provides college scholarships to students who excel in academics, leadership and community service. Since its creation, the BECU Foundation has awarded more than $1.5 million to 715 students.

Oakland served on the Board of Seattle’s Neighborhood Children’s Club, helping many children get on the right track to a productive future, and has guided BECU to support a number of non-profit organizations that provide affordable housing, including Habitat for Humanity, Rebuilding Together, Impact Capital and Plymouth Housing.

“Gary has been a trailblazer and a most generous and dedicated philanthropist, both inside and outside of the credit union movement,” said Robert L. Coleman, Director of Northwest Baptist FCU. “Gary Oakland’s career was spent not only ensuring the absolute best for his membership, but also ensuring the success of those surrounding him.”

(emphasis added)

April 17, 2026

Are Volunteers Still the Heart and Soul of the Credit Union Movement?

Many think of April as the month taxes are due. For the untaxed credit union system there is a more relevant event. In America, April is volunteer month. The country honors the millions of citizens who serve their communities and neighbors by sharing their most precious resource—their time.

This volunteer spirit is a vital part of American history and culture. Because the role of government was either nonexistent or limited in the country’s early years, citizens would volunteer to solve common needs. In 1736 Benjamin Franklin organized the first city fire department for Philadelphia, all volunteers. Today 65% of the country’s fire fighters are volunteers. Their collective effort is estimated to be valued at $50 billion if they were paid.

Down through history to the present day in every community, volunteers are at the center of vital social, civic and cultural activities It is an essential part of American culture. People take pride, have a sense of duty and enjoy the camaraderie these efforts offer. Just inventory your own involvements.

Cooperatives and Volunteers

The credit union movement was built by volunteers with governmental oversight often rushing to keep up. In the beginning, volunteers borrowed their “authority” to start the first coop and called it St. Mary’s Bank.

This essential contribution to the coop system’s creation is embodied in the public “definition”—non-profit, member-owned and volunteer-led. Until recently, “volunteer” meant unpaid. which is still the rule for federally chartered credit union board members.

Volunteers’ Founding Role

Every credit union active today gained their charter from the sweat equity of volunteer organizers. Often the first managers and staff were unpaid or seconded to oversee the effort while on the sponsor’s payroll. The physical location of these coop startups was donated either by a sponsor or even in a person’s home. These home-based coops were still common enough that in December 2013 the NCUA under Chairman Matz voted 2:1 to prohibit the practice in December 2013 board meeting. The effort was dropped.

The volunteer ethic is embedded in cooperative values. The seven cooperative principles (now eight) all infer or embrace the ideals of self-help and mutual interdependence. The words of the first principle: Credit unions are voluntary, not-for-profit financial cooperatives . . .

Today volunteers remain a vital component of credit union leadership. One example of this energetic leadership potential is from a recent a linkedIn profile. The student is donating part of her undergraduate career to a startup credit union on campus: Student at UNC Chapel Hill *4X World Record Mountaineer*3X TEDx Speaker*Blogger and Research Consultant*MUN Enthusiast*Cyclist* Runner-HM&FM*Badminton player*Artistic Roller Skater.

Concerns about Self-dealing in Coop Leadership

In the first fifty years of state charters, regulators were also worried about the temptations always present when managing other people’s financial resources.

In the early history of Illinois charters for example, senior managers, officers and directors could not borrow from their own credit unions for concern about self-dealing. The solution was to create chapter credit unions providing leaders an independent coop alternative. While this prohibition was changed, the call report today still monitors the total number and amount of loans outstanding to directors, committee members and senior management.

Volunteers No More?

Unlike the federal system in 22 states the credit unions are permitted to pay directors, some with formal rules, other with authority more open-ended.

For example, several years ago I worked with a state charter where directors met three of four times per month in board and committee meetings. This frequency was because compensation was based on the number of meetings attended. Meetings multiplied.

One rationale for paying directors is the need for qualified volunteers. A long- serving CEO whose directors were paid his entire tenure said the practice had the opposite effect. Less attentive directors became harder to replace as they did not want to give up their extra income.

Paying “Volunteers”

What can be learned from the increasing payments going to directors of state charters? Are these credit unions better performing versus their FCU peers? Are they more innovative? Are directors contributing in ways that unpaid volunteers may not?

While these are important issues, I believe one factor and the historical concern is already obvious and concerning. Specifically, does paying directors distort decisions away from what is in member-owners’ best interest, into what is in leadership’s personal interest or benefit?

A Case Study

There has been much public commentary and analysis of the proposed merger between Sacramento based SAFE and Tukwila, OR headquartered Boeing Employees Credit Unions (BECU). An important difference in the two states’ chartering rules is that state charters can pay their directors in Washington but not in California which follows federal practice.

Boeing Employees Credit Union’s 2024 IRS 990 shows the total compensation for the directors as $1.065 million. Chairperson Somberg received $154,375. The average pay for all nine was $118,352. Each reported working six hours per week for the credit union which equates to a $380 per hour rate.

In addition, the former CEO Benson Porter who retired as BECU President in December 2022 received $931,665 with zero working hours. The CEO Beverly Anderson who succeeded Benson reported working full time for 2024 compensation of $2,708, 880 or 17 times the average employee’s salary of $159,327.

One result from this compensation culture is that BECU has one of the highest operating expense ratios to average assets at 3.33% much higher than every California credit union over $10 billion. SAFE’s operating expense ratio in 2025 was 2.56%.

If SAFE directors were truly seeking a better performing opportunity, here are California based credit unions who are much superior to BECU in financial management and branch availability:

Golden 1 (Sacramento) Assets: $21B OpEx: 2.20% Br: 62

SchoolsFirst (Tustin) Assets: $35B OpEx: 1.81% Br: 69

Patelco (Dublin) Assets: $10B OpEx: 1.84% Br: 37

First Tech (San Jose) Assets: $30B OpEx: 2.83% Br: 56

San Diego County (S. D.) Assets: $10B OpEx: 1.84% Br: 44

Redwood (Santa Rosa) Assets: $10B OpEx: 2.28% Br: 21

Logix (Valencia) Assets: $10B OpEx: 1.84% Br: 37

Star One (Sunnyvale) Assets: $10B OpEx: 0.73% Br: 7

A second outcome of this high expense environment from one analyst’s review: members of BECU, on average, pay more for loans and earn a whole lot less on savings… The cost of operating BECU is @+15% higher than all other CU peers! (link)

Given this clear underperformance by BECU versus its peers and local California options, why did the directors of the $4.4 billion SAFE sign a “definitive merger agreement” to transfer control of all operations and all assets to an out of state credit union with no local connections, experience or proximity?

The definitive agreement has not been disclosed, except to announce that several SAFE directors will be given seats on the BECU board where in 2024 the average compensation was $118,000. SAFE directors, as a California charter, are unpaid.

Who will benefit from this compensation if the merger proceeds has not been disclosed. What is known from safecu.org and clicking on SAFE management, is that only three of the current 12 directors were members prior to being nominated to the board of SAFE. SAFE bylaws clearly state that nominees must be members in good standing. In other words the board nomination and selection process would appear to be closely controlled if not irregular.

Following the money helps understand motivation. The new director compensation available post-merger raises important questions. What are the conflicts of interest as SAFE’s board decided to transfer the entire future of this strong local Sacramento institution and its 245,000 members’ $400 million of equity gifted to BECU for free? Especially as BECU’s performance on most all critical financial measures trails large California credit unions and BECU’s national peers.

The Interests of Paid Volunteers

The founders of coops understood human nature. Payments today to state credit union volunteers follow no common pattern or rules, are limited in or disclosed long after the facs in IRS 990filings, and lack transparency and context. In such circumstances human temptations are set loose.

Today there are very limited, if any, checks and. balances on volunteer compensation. As in the multiple situations where millions of dollars are paid to CEO’s who merge their credit unions, the regulators always seem to look away from these instances of self-enrichment. No one and no set of organizations will ever be perfect. Moreover, as BECU’s results suggest, there is no relation between performance and director pay, especially at a high level.

The ongoing credit union merger free-for-alls are opening up this new form of compensation incentive payments. If SAFE is approved, there will be lots of travel to California by credit unions whose boards are paid—think of Colorado and Washington as initial sources.

But the issue is more fundamental than old-fashioned corruption. The director pay practices in some state charters are leading credit unions to an even more critical cliff edge. Recall the public coop definition of non-profit, member-owned, led by volunteers. It is “volunteers” that govern how the other two characteristics of coops evolve. Can paid volunteers be entrusted with protecting these two defining credit union charter characteristics when their own personal well being is involved? Have credit unions morphed into more for-profit leadership behaviors and rewards? But without market accountability?

What’s at stake in the SAFE-BECU proposed merger and in other similar director paid merger initiated combinations is trust in the cooperative system. For the oldest test of character is: “If you have integrity, nothing else matters. And if you don’t have integrity, nothing else matters.”

April 14, 2026April 14, 2026

A Credit Union Moon Shot

Sometime in the next 12 months the proposed Carolina Students’ Credit Union will be launched.

The crew of 31 students is backed by a support team of faculty and credit union interested folk. As noted in yesterday’s post, new charters are rare with fewer than two a year succeeding after lift off.

The Beginning

What motivated these fulltime students to organize this coop venture?

Shiva Rajbhandari is originally from Boise, Idaho. When he arrived on campus as a freshman, he was unable to deposit his scholarship check remotely, so he searched for a financial option in Chapel Hill. As a climate activist, he wished to avoid large banks with their investments in fossil fuels.

When he couldn’t find a credit union available to UNC students, he decided to start one. Shiva is now a junior studying Public Policy and Sociology. He is also the President and founder of the student chartering team.

Critical Milestones Met to Date

By April of 2025 a board of advisors of credit union professionals and faculty was assembled.
NCUA approved their concept with an FOM of undergraduate and graduate students at UNC in August.
After two rounds of recruitment, the launch crew grew to 31 team members.
From advisors’ counsel, the group is seeking a state charter with the NC Credit Union Division. North Carlina has not issued a new charter in over 30 years.
Team members visited the student-run credit unions at Georgetown University and the University of Pennsylvania. They learned about student loan products, potential vendor partners, and university support. One critical takeaway: in the digital campus environment students value local personal service. Over 60% of the Georgetown student body are credit union members.
The first draft of the charter application is complete and circulating to advisors for review. It includes a 40-page continuity plan.-
Campus financial literacy presentations drew over 80 students further documenting interest.

Why a Credit Union Charter?

Founder Sarah Galdi, from Apex, NC, is a sophomore studying Economics and Mathematics. A life-long credit union member, she took for granted the value they provide communities. Then at college she realized not everyone has access to not-for-profit financial services. She describes three situations of immediate focus:

Wells Fargo has a monopoly on our campus. International students, for example, have a difficult time opening accounts with large banks. We will be able to lower these barriers to entry as has been done at UPenn’s credit union. Two international students joined our team because they were personally drawn to our mission .
Student organizations can be disadvantaged by the lack of financial options. To receive funding from student government, organizations must have a bank account. Wells Fargo, requires a minimum deposit to open organizational accounts, meaning students must advance this deposit requirement before receiving University funding.
As a public university, students come from all income levels. Economic inequality on campus mirrors society at large. Some student’s parents add their name on their children’s credit card to establish a credit history. Lower income and first-generation students often lack this option. They have low or no credit scores. This is a significant economic hurdle for these students. We plan to offer credit builder loans to close this gap.

An International Student’s Story

When I first came to the U.S. at 17, I was completely on my own — new campus, new country, no idea what I was doing.

And one of the first walls I hit was just trying to access the basic financial system.

I couldn’t get a debit card because I was under 18. I couldn’t work because I didn’t have a Social Security Number yet. And without an SSN, I couldn’t apply for a credit card It was an exhausting loop—every door seemed to require a key I didn’t have.

The hardest part, honestly, wasn’t even the bureaucracy. It was doing all of it alone. I was just figuring it out as I went, confused, frustrated, and sometimes just worn down by it.

That experience stuck with me. The system isn’t just complicated — it’s genuinely inaccessible for international students, especially those who arrive young. And that’s something I really want to change.

The witer, Hasvi Mariki, joined the credit union luanch crew.

A Standing Ovation at GAC

Through the support of Carolina credit unions and ACU, three student founders attended last month’s GAC. Here is one participant’s account.

At a Credit Union Roundtable, we told the people at our table our story. They got so excited for us, they grabbed a mic. Then they asked me to stand up and share our mission with the 100–200 people in the room. They gave us a standing ovation. People were inspired that we are encouraging young people to join credit unions and work in the credit union industry. We affirmed that cooperative finance is relevant and worth building for the next generation.

An observer at that session sent me this note: The students are choosing to build. Not because it’s easy. Not because the system makes it straightforward. But because they see a gap between what finance is and what it could be.

Regulator’s Funding Requirement

An outreach committee is seeking the initial $500,000 capital now required to receive a charter. Junior Mohammad Qureshi from Greensboro, NC, is the Chair for this task.

“I came to UNC on the pre-med track. From a young age, I knew I wanted a career centered on helping people, and becoming a physician felt like the natural path. But early in my sophomore year, I realized I wasn’t happy.

I switched to economics, as i was surrounded by business growing up. But something still felt off. Most business careers prioritize profit over people, and that bothered me. I’d lost my sense of purpose; sold out on doing something meaningful.

When seeing the opportunity to join the startup, I didn’t know much about credit unions, but I’d always heard of them. I researched and something clicked: high-impact finance that puts people first.

This has been one of the most transformative experiences of my time at UNC. Bringing a credit union to campus has become my way of leaving something meaningful behind, proof that purpose and business don’t have to be in conflict.”

This is Bigger than One Credit Union

This is a more consequential effort than founding one more credit union. It demonstrates the next generation’s belief that coops can make a difference.

Whenever a brand, a product, a company or even fan loyalty created by the founders is not renewed for following generations, consumers’ interest will atrophy and die.

This de novo effort has multiple projects and specific support needs. You can learn about these by contacting Sarah Galdi, Scgaldi@unc.edu or President Shiva Rajbhandari, Shiva.rajbhandari@unc.edu.

The credit union’s website is here. Individuals can make tax exempt donations through CU De Novo, linked here.

Support of this startup will have an impact on campus for students, on the NC credit union system and the public’s perception of coop’s relevance. But most importantly you will feel good knowing you made a difference.

If you have any hesitation, I recommend you talk with one of the founders. That is what convinced me this is a special group who will complete their mission.

March 26, 2026March 26, 2026

Democracy Takes Work-At Every Level of Society

As I went downtown during rush hour yesterday, a gray haired, older lady appoached me with a small handout at the escalator. It was a snall flyer for where to stand locally in the No Kings rally this Saturday around the country at over 3,000 locations.

But democratic duties are not limited to national and local politics. Virtually all volunteer, non-profit and community organizations have some form of member oversight. This can be the elections of representatives or to changes in bylaws and/or structure.

If one owns any publicly traded stocks, it is likely there will be reminders of the annual meeting with proxy solicitation calls. In this case the voting is based on share holdings, but voting none the less.

Credit unions can learn from these other exercises in organizational governance. Especially what can happen when democracy is usurped by those in control at the moment.

The Tools of Democratic Oversight

Jim Blaine the former CEO, observed that an organized minority in authority will always defeat a disorganized majority. And democratic majorities are, by definition, rarely in unanimous agreement. Not everyone in Virginia thought the idea of Give Me Liberty or Give Me Death, was a great choice.

One of the most important monitors of our various democratic processes is the press. This can be public press and broadcasts, industry publications, bloggers and those using social media to raise concerns, and even individual actors writin opinions for their local outlets. Here is how the press is covering a story of usurpation of democractic control in a major local powerful institution.

Democratic Control Removed-A Press Investigation

Recently the Houstan Chronical completed a five-part investigative series of a takeover of one of the largest Baptist Churches in the city by its pastor. (link)

While the details are behind a paywall, here is a summary of events.

Houston’s Second Baptist Church, with about 90,000 members, is a church at legal war with itself, since a group of influential congregants calling themselves the Jeremiah Counsel sued church leadership in 2025.

They’re challenging revised bylaws established in 2023 that deny lay members a vote in important church decisions, including the selection of senior pastor Ben Young, son of the church’s popular long-time leader, Ed Young.

The bylaw change was in a single sentence that seemingly slipped by most people and put the church at odds with its own faith: “Members are not entitled to vote in person, by proxy or otherwise.”

With those 12 words, the congregation at the now 98-year-old church lost more than its vote. It parted ways with a core tenet of Baptist doctrine: democratic rule.

The revolt started when a group of members realized they had given away their authority to vote on church business after an election in which hardly any congregants participated.

It didn’t take long for several influential church members — who are now suing to reverse changes made in that crucial vote — to realize where the new bylaws came from. They bear a striking resemblance to the bylaws of Fellowship Church in Grapevine.

Fellowship Church in Dallas, is another megachurch with family ties to Second Baptist. Second Baptist quietly copied Fellowship Church’s bylaws — and silenced its members.

One article in the series is headlined: How Second Baptist Church sacrificed its Democratic Principles: ‘You can’t fire the king’

Democracy vs. No Kings

The human tendency to rule by authority versus the more complicated exercise of democratic leadership is present in all organizations. But especially in credit unions. Because money amd, its use, is combined with power.

The result is that boards and senior management strive to limit any meaningful say in their oversightand leadership roles. Nominations for board seats are controlled by existing directors and limited to the exact number of vacancies. No voting needed, just ask members to approve by acclamation.

But when there is the prospect of members rising up, the next step is to copy the practice of Second Baptist. Specifically change the bylaws to make it impossible for members to self-nominate or to challenge the board’s control of the election process.

In the traditional FCU bylaws, members can submit a petition with 500 names for board nomination or to call special member meetings. The top three credit unions by assets,Navy FCU, SECU (NC) amd PenFed all took steps to make this member option impossible. Instead of a fixed number, the bylaws were changed to require a percentage of total members to sign the petition.

PenFed’s change came after a self-nominated candidate qualified for election. SECU’s board changed its bylaws after members challenged the closed board process in an open election. The board changed the bylaws and election procedures to make the process very difficult for member-nominated candidates to qualify.

All three bylaw changes to the long standing democratic process were approved by the reglators with members having no say or even knowledge.

Democratic oversight takes integrity, character and continuous vigilance. It requires a free press in all forms to cover uncomfortable truths and lapses in duty by those in power. Power in terms of community and local influence and those charged with responsibility for public oversight.

Firing a Credit Union Leader

One of the landmark events in credit union land was when CUNA fired its presient. The story in brief:

Herb Wegner was an avid pilot and owned his own plane. He had an agreement with (CUNA) to be reimbursed the equivalent of a first-class ticket whenever he flew his own plane for work. However, disputes over these expenses became a major point of friction with the CUNA Treasurer, Fred Krause.

At a board meeting in 1979, Krause reportedly announced he was “tired of fighting Herb about airplane expenses” and unexpectedly moved to fire him on the spot. The motion passed, stunning most of those in attendance.

While there were other factors at play, today the highest honor credit unions bestow on their leaders is called the Herb Wegner award. An irony which shows the cooperative system’s ambivalence in managing its own shortcomings.

What Everyone Must Do.

Democracy takes practice which is the root of the word participation. Here is my sign for Saturday.

March 17, 2026March 17, 2026

Every Member Has a Story

Two stories of a credit union going the extra mile to help members with card problems. From a CEO’s monthly staff briefing, used with permission.

The stories are long and show the team efforts needed to resolve difficult circumstances in the member’s best interest.

A Blocked Card and a Member In Transit

Our member called in on Thursday, Jan 22, 2026, because his debit card wasn’t working. When our CC representative, Kristen, took a look at his debit card, it was discovered that it was restricted due to suspicious activity, and she confirmed that the transactions were fraudulent.

After explaining that the card would need to be blocked, he became very frantic and upset as he was working out of town. His company was sending him home due to the incoming weather. However, he was going to be stranded in South Texas without a debit card, no gas, and no access to funds. The closest shared branch was 75 miles from where he was.

Kristen went to Jami, her supervisor, to see if there was anything that could be done to help this member. Jami reached out to RISK and asked if an exception could be made for us to un-restrict the member’s debit card long enough so that he could go to an ATM and withdraw funds, and then immediately block it when he was done, so that the credit union could maintain operating control.

When Kristen got back on the phone and told the member the good news, he was elated, and Hope took the place of despair. Kristen stayed on the phone with the member until he got to an ATM. She then coached him on how to get as many funds as he could from the ATM (the limit for that specific ATM was $200 per transaction). The member had to do multiple transaction withdrawals wich Kristen walked him through. After the member pulled what funds he could out, Kristen immediately blocked the card.

The entire team did the right thing by this member and found a way to enact our Principles of Operating Control while realizing that Every Person Has a Story. The credit union was able to deliver a happy ending by enabling him to get gas, necessities, and a hotel room so that he could make it home safely in time to avoid the bad weather.

An Overdrawn Credit Card in Default

A member and his mother came to the local Member Relationship Center after a frustrating experience related to a credit card that had been charged off. The member believed he had only been an authorized user on the account, added by his father when he was 18, to help build credit. Sadly, his father later passed away after struggling with alcoholism, leaving an $8,000+ balance that began reporting negatively on the member’s credit. It was later confirmed that the member had signed as a co-applicant, making the debt legally his responsibility.

Prior attempts to resolve the issue had been unsuccessful, leaving the member and his mother extremely upset. Joley from the Contact Center supported them during an emotional call and proactively coordinated with member service reps Allison and Bella to ensure the branch team was prepared. Bella also followed up based on a prior review, providing the card provider the deceased accounts contact information and continuing to advocate for support.

When mother and son arrived the next day, emotions were high. During a lengthy call with the card provider, we verified account details and requested a higher up review. While the conversation was tense at times, the focus remained on de-escalation, empathy, and finding a solution. After nearly an hour and multiple conversations, the credit card proviider’s recovery agent agreed to accept a one-time $1,000 settlement on the balance.

The mother who is on Social Security with limited savings, was prepared to pay the settlement that day. By the end of the meeting, both she and her son were visibly emotional—this time from relief. They shared that they had felt stuck for a long time and were deeply grateful for the advocacy, time, and teamwork that helped them reach a manageable resolution.

A Comment

This is the credit union difference in practice, not a PR slogan. These members were treated like owners whose special circumstances were recognized and resolved as a standard operating procedure (SOP).

Tomorrow I will show how this individual approach, intrinsic to cooperative design and purpose, carried over into the 1984 restructuring of credit union’s unique insurance saety net, the NCUSIF.

February 11, 2026February 11, 2026

Will NCUA’s Journey Be From Chartering a COOP Movement to a Regulatory Dead End?

What kind of financial regulator would be most effective to carry on the purpose of the credit union system stated in the FCU ACT? (see note on Congressional purpose at end)

Should the credit union system be overseen by a regulator of cooperatives or of financial institutions?

The arc of federal regulation from 1934 to today is simple. The federal regulator evolved from the role of chartering, promoting and supervising cooperatives to just another financial supervisor safeguarding an insurance fund.

The coop design is unique in American financial options. The users are the sole owners of the service. The intent was to create shared community resources not private wealth. The structure was to be perpetual with the common equity always “paid forward” to benefit future generations.

Moreover, financial soundness was underwritten by this shared purpose of borrowers and savers. Governance was democratic–each member-owners had one vote. No proxies.

The Impact of NCUSIF On Coop Regulation

The turning point in cooperative regulation was the 1970 passage of a federal deposit insurance (NCUSIF) option modeled after the FDIC and FSLIC. The banking funds were created in the early 1930’s in response to the “banking holiday” failures in the depression. The nascent state chartered credit union movement had no such system failures. Deposit insurance was not part of the FCU act passed in 1934. It wasn’t needed.

The need for the NCUSIF was much debated by credit unions in the lated 1960’s. CUNA opposed the option arguing such an institution would eventually dominate the system’s functioning. A new trade association, NAFCU, was formed to lobby for and pass this federal option for cooperatives.

The NCUSIF was not created because of system failures. Rather it was a recognition that cooperatives, while different in design, were just as safe as any for-profit banking option.

As NCUSIF insurance spread, so did federal regulation mimicking other banking regulations.

From Cooperative Partner to Financial Overseer

When implementing deregulation from 1981-1985, NCUA Chairman Callahan asserted credit unions were unique. The so-called level playing field arguments, he believed, would undermine the cooperative advantages of member-ownership.

Callahan believed regulations should promote cooperative purpose and collaborative actions. Both tenets were key tp the financial restructure of the NCUSIF and achieving 100% credit union participation in the unique CLF’s-coop system liquidity partnership.

But the bureaucratic pull of Washington prompted later NCUA leaders to emulate the example and practices of banking regulators. Safety and soundness, not member service, became the regulator’s mantra.

Both NCUA and credit unions sought Congressional hearing seats at the tables with the titans of America’s financial services.

Today NCUA has copied banking regulators with rules such as risk-based capital and, expanding market sources of capital. New charters are non-existent. Cooperative purpose is never mentioned in supervisory priorities.

NCUA oversight has fluctuated between laissez faire (let the free market decide) to embracing the administration’s political ideology from DEI to government downsizing.

The absence of any reference to coop design is that there is no protection for for member-owner rights or their collective savings. NCUA like the banking regulators has reduced their oversight to merely offering a $250,000 payout in the event of institutional failure.

This neglect of member-owners’ rights has resulted in boards staying in power perpetually. Owners are kept out of any governance or voting role. Bylaws are modified with NCUA approval to prevent member initiatives. Boards and CEO’s feel free to take a credit union’s business model and its billions in legacy assets in any direction they choose.

Transparency for cu leaders’ conduct is non-existent. Director fiduciary duties flouted. Accountability for outcomes occurs only after a financial crisis. Then the system’s leadership shortcomings are quickly swept under the rug via mergers.

When new CEO’s arrive from outside the coop system, often former for-profit financial professionals, they bring their prior experiences with them. They act like teenagers given a new high-powered formula 1 car. With board assent, they jump into the driver’s seat and try to see how fast they can make their new institution grow.

The NCUA’s Future

Today NCUA acts and sounds like the other banking regulators. Credit unions applaud the Trump adminisration policy of government tear down and relaxed o exam oversight. NCUA appears alongside the other financial overseers in Congressional hearings, states all is well, and makes no effort to describe how the tax exempt coop system is fulfilling any public duty.

The consequence is that credit unions no longer see their organization as part of an interdependent financial system. Institutional success is celebrated versus cooperative’s ability to create better financial solutions for those who have the least or know the least about personal finances.

Individual credit union priorities look more and more like capitalist business plans. They attempt to acquire, not support their peers, via merger takeovers. If that fails, just buy a bank.

With self-perpetuating board oversight, regulatory withdrawal, no transparency about transfers using tens of millions of member-owners’ capital, the cooperative system may lack the capacity for self-correction. Industry hegemony, not cooperative purpose, becomes the institution’s endgame.

How much longer will Congress or public policy think tanks not pose the existential questions: Why does America need a financial system that emulates its competitors, but with a tax exemption? Will NCUA become part of Treasury’s financial oversight, just like the OCC? Why have two federally managed deposit insurance funds that provide the same function?

“It Makes No Sense:” One Analyst’s Assessment

Yesterday’s post gave a brief history of federal regulatory evolution, It tracked the various federal governmental departments that shepard credit union’s evolution. And subsequent events under NCUA as an independent agency. This is that author, Ancin Coolley’s concern, about where the coop movement stands today.

When you read credit union regulatory history and go back to the arguments, it keeps bringing me to this point: the FDIC and other agencies did not want credit unions. And it calls to mind the question, why did they not want them?

They did not want them because credit unions were not treated the same way as other financial institutions. They were viewed as something that drifted into a social-services posture.

And honestly, the more I dig into the history and the legal history, the more it feels like I’m finding out Santa Claus isn’t real. The more I learn about the lack of standing for members in court, and the reality that there’s often no remedy for members against directors who effectively give away capital, the more disorienting it feels.

It’s like there’s the reality I want to believe in, and then there’s the legal reality of what a credit union actually does.

And what I can’t even begin to reconcile conceptually is this: credit unions want to maintain their tax exemption while also purchasing banks. In good conscience, I can’t even argue against someone who says, “How are you going to maintain your tax exemption if you’re buying a bank, when you were originally given a tax exemption for not being a bank?”

It makes absolutely no sense.

Editor’s Note on Cooperative Purpose:

Congress added the following language to the Federal Credit Union Act on August 7, 1998.

The text was included as part of the Congressional Findings in Section 2 of Public Law 105–219, also known as the Credit Union Membership Access Act.

This specific language was crafted to affirm the Mission and reassert that credit unions serve people of “modest means.”

The Congress finds the following:

The American Credit Union movement began as a cooperative effort to serve the productive and provident credit needs of individuals of modest means.
Credit unions continue to fulfill this public purpose, and current members and membership groups should not face divestiture from the financial services institution of their choice as result of recent court action.
To promote thrift and credit extension, a meaningful affinity and bond among members, manifested by a commonality of routine interaction, shared and related work experiences, interests, or activities, or of an otherwise well understood sense of cohesion or identity is essential to the fulfillment of the public mission of credit unions.
Credit unions, unlike many other participants in the financial services market, are exempt from Federal and most state taxes, because they are member-owned, democratically operated, not-for-profit organizations generally managed by volunteer boards of directors and because they have the specified mission of meeting the credit and savings needs of consumers, especially persons of modest means.
Improved credit union safety and soundness provisions will enhance the public benefit that citizens receive from these cooperative financial services institutions.

February 10, 2026February 10, 2026

A Short History of Federal Credit Union Regulators

History matters. It provides perspective for how we arrived at our present circumstance. This context can highlight critical prior assumptions. It teaches about successes and failings.

Most critically, knowledge of the past can help identify important issues for future sustainability.

In the summary which follows, Ancin Cooley provides insight about the motivations during credit unions founding era. And what has been lost from that generation’s experiences.

Tomorrow I address the underlying question from this history lesson: What kind of regulator is most likely to sustain an independent cooperative financial option for America?

A Short History of Credit Union Federal Regulation

By Ancin Cooley

Did you know that between 1934 and 1970, credit unions had four different federal regulators, and none of them actually wanted the job?

Here’s the journey:

1934–1942: Farm Credit Administration
When the Federal Credit Union Act was passed, the Federal Reserve and the Treasury Department were the “logical agencies” to oversee a financial institution. Both said “Nah, we’ll pass.”

1942–1948: FDIC
During World War II, credit unions were temporarily transferred to the FDIC. But the FDIC didn’t want them either.

1948–1953: Social Security Administration
When the FDIC pushed credit unions out, they didn’t go to another financial regulator. Credit unions were placed in the Social Security Administration.

1953–1970: Department of Health, Education, and Welfare
When HEW was created, credit unions moved again.

In 1970, the NCUA was established and the NCUSIF created.

What does this tell us?

Credit unions weren’t seen as financial institutions in the same category as banks. The St. Louis Fed wrote: “Credit unions are exempt from federal taxation because Congress views them as member cooperatives and, therefore, quite different from banks and thrifts.”

But why?

Why were credit unions classified differently and given a non-profit status? Many credit unions from that era were born out of crisis. The Great Depression wasn’t an abstraction for the people who built these institutions; it was a lived experience.

From the 1929 crash through 1933, about 9,000 U.S. banks failed. Those failures resulted in approximately $1.3B in losses. (I am sure someone can convert that into today’s dollars)

If you’ve ever known someone from that generation, you know it changed them. My grandmother is 93 years old. She hid money in places we have not yet found. That era shaped how an entire generation related to trust, to institutions, and to one another. Credit unions didn’t grow from a clever marketing campaign. They grew as a community in response to a collapse of trust.

A note on where we are now.

I’ve been wondering why the norms in the credit union movement began to deteriorate about 25 to 30 years ago. I believe the early builders reached a point at which they could no longer protect their institutions.

Many of the things we are watching today would have been harder to pull off if those original guardians were still in the boardroom. I find myself often whispering to myself, “Now, you know this wouldn’t have gone like this if Mr. John were still alive.”

The people who built many of these institutions carried a lived memory of bank failures. They remembered what it felt like to lose everything. That memory did something important. It created guardrails. Because when you have experienced a trust collapse, you do not treat a cooperative as a commodity.

Next post: how the S&L crisis reshaped the credit union landscape, including the entry of bankers who both helped and harmed the movement.

Editor’s note: I will post my response to Ancin’s insight tomorrow.

February 9, 2026February 10, 2026

Can Credit Unions Buy Their Way to Success?.

For the first 75 years of credit union history, member, share and asset growth was from internal, “organic “ business efforts versus external acquisitions.

Some of the factors requiring this approach were regulation, field of membership limits, the absence of external capital or liquidity, and the cooperative design’s “local” advantage.

After deregulation of financial services became government policy in the 1980’s, many of these constraints were modified. Growth options expanded. FOM regulations were broadened. New membership strategies such as indirect lending were introduced. Credit union leaders expanded their market ambitions.

Purchasing New Accounts

Today many credit union strategies involve both organic and external acquisition growth tactics.

This market bidding for new members is illustrated by financial institutions’ multiple offers for new checking accounts. Here are some recent cash bounties sent to me:

From an airline credit card issuer:

As a valued Chase customer we’re thanking you with an up to $900 offer. Open a new Chase total Checking account and the new Chase Savings account with qualifying business activities.

One of my credit unions emailed this offer:

Dear Charles,

You can still earn up to $100 when you open a new Patelco Checking and Money Market account. Here’s how.

USAA’s post card appeal had this headline; $400 Cash Bonus. The offer: When you apply for and open your first USAA Classic Checking account and receive a qualifying direct deposit. Offer is nontransferable.

A new local bank, Atlantic Union, promised a $400 welcome bonus in three easy steps.

Open a checking account.
Set up direct deposit.
Collect you $400 bonus.

Not to be outdone, PenFed offers up to $300 for opening a new checking account with a qualified deposit. To receive the full $300 requires an initial $20,000 deposit. The average daily balance must remain above this amount for five months to receive the $300.

Can Credit Unions Win These Bidding Battles?

Indirect auto loans illustrate the ultimate challenge of external asset purchases. Can these new customers be converted to loyal members. Or is the transacton a one and done event?

Before deregulation the credit union option was itself compelling. Word of mouth was the most common marketing effort. Credit union membership was thought to be a valuable benefit.

One proof of this belief is the many times members moved away from a job or their community, but chose to retain their credit union affiliation-just in case I need it.

In what some CEO’s view as a commoditized financial services arena, the quickest way to grow is to go buy it. These efforts include third party loan originations, purchasing individual participations, acquiring whole banks and the ever present offers to merge facilitated by golden parachutes for the selling CEO.

Is offering a better price sustainable?

Will these “bonus” pricing strategies result in long term loyalty?

What is the Coop Competitive Advantage?

Buying growth seems easy at first. The costs and immediate increases in size are seen. The longer term question of whether these relationships last, is down the road.

The tactics of purchasing initial market success raises important questions:

Does cooperative design, other than the federal tax exemption, give the credit unions a competitive advantage in these price/bonus competitions?
Does acquisition of new accounts via third parties result in new member relationships, or a temporary lift?
If growth via acquisition becomes an important strategic effort, does a cooperative’s internal capability for organic market efforts atrophy?

Buying growth is not a unique market capability. It is very visible and easy. Just call up a broker or other third party originator. The real work of relationship building just begins with the booking.

Purchasing growth is constrained by internal resources and market competition. Is attracting new members with a better price the best way to present the cooperative value advantage?

Learning from the Past

The capabilities and reputation that created a $2.3 trillion ciiperative financial system today were built on a foundation of multiple factors. These included convenience, personal service, local familiarity and a fair price. All wrapped in values centered on collective community care.

The challenge of creating real organizational value is ever present. The answers are not simple and often unique to a credit union’s situation and leadership skills.

The response is not to go back to a prior era or model. Rather it is a simple lesson from generations of coop success. If an organization wants to be a credit union, then it must decide to be one. Not perfect, but at least good. America has plenty of banks.

P.S. Here is a case study published by CUDaily of a credit union expansion effort based on credit union advanages: Why a California Credit Union Intro’d a New Digital Brand in Georgia.

February 5, 2026February 5, 2026

What Are Credit Union Schools Teaching?

One of the important collaborative efforts is the system of credit union professional courses. These multi-year commitments are preparing junior staff members for leadership roles in their careers.

I received the following note from a person attending one of the oldest and largest of these programs:

I am in my third and final year at Western Credit Union Management school. In working on my final project, I came across a past high honors project that I wanted to share with you.

It details one larger credit union’s growth strategy through mergers and acquisitions. What is particularly interesting is how they view the Small Credit Union category, which they define as $500 million and less.

“A very desirable new market or a significant new strategic capability would need to be evident for our cedit union to consider a merger with a small credit union. Otherwise, the operational disruption would not be worth it.”

She attached the full project of almost 200 pages. It is very professionally done. Well organized, lots of data, tables and clear presentation strucure. The student’s own credit union is analyzed with a SWOT framework. Various consultant views are offered and footnoted.

Mergers and acquisitions are just one of five goals to try to restart the credit union’s slowing member growth.

I did not thoroughly read the entire thesis. My question would be who is providing feedback on these major academic efforts?

For the work is filled with data and other documentation, current in its references, and logical in the recommendations.

I did not study all the points. It is written from an institutional perspective. I did not see any reference to two areas: credit union system’s future as a unique alternative for members, and what parts of the consumer market are in most in need of cooperative solutions. Growth was the goal.

The thesis is a well written document that should be used as a starting point, not a final plan of what this credit union aspires to be. Who are the readers and evaluators for these academic exercises?

February 4, 2026February 4, 2026

When Music Transforms Words

The folk singer Jesse Welles and retired credit union CEO Jim Blaine are separated by two generations of lived experience. Yet they share a vision and common mission for the country.

Each person has their own professional “lane” for implementing their commitment. Side by side they illuminate each other’s core values.

Most credit union people of a certain era know about Jim Blaine’s career at SECU (NC). Over five decades he built the country’s second largest credit union by not following conventional industry practice.

His two guiding principles to staff were simple: Do the right thing and Bring us your Momma. Folksy, yet profound.

No risk-based pricing–a member either qualified or not for the loan. No indirect lending allowing a third party to set the rate. No frills credit cards. Focus on real estate as the surest means to enhance member long term well-being.

He created a Warren Buffet like organization with centralized funding but local decision making and implementation, SECU built a statewide network of ATM’s and over 200 branches. He chartered a unique member-funded foundation supporting education, health and other community needs throughout his home market, the Tar Heel state.

He was outspoken about his approach to cooperative purpose, often challenging peers’ priorities.

“A prophet is not without honor, except in his hometown” is a biblical phrase that summarizes Jim Blaine’s most recent efforts.

For the past four years he has spoken his mind about the direction SECU’s board and senior management have taken. His blog, SECU just Asking is plain spoken, factual, and sometimes personal when publicly challenging the credit union’s change of philosophy.

Over five decades Jim built one of the most successful cooperative financial charters in America by following one simple rule: “What’s good for the least of us, is good for all of us.” A phrase with multiple meanings.

The purpose of the tax exempt cooperative system is to serve a vital segment of America’s consumers. He described that group as: Those who have the least or know he least pay the most for financial services in America today.”

Many peers misunderstood this approach, believing his business model was archaic, lacking innovation and missing the most important market, the A credits and well-to-do.

Enter Jesse Welles

I was listening to recent protest songs from community sings in Minneapolis, now under federal armed siege. My algorithm offered a Woody Guthrie, Pete Seeger-style activist folk singer.

Born in 1992 in Arkansas, Jesse Welles has, over the last ten years, written hundreds of single ballads about life, politics and those left out of America’s promise.

One commentator describes his voice as sounding like burnt toast. To which he replied, but you can still eat it.

One ballad that caught my ear was called The Poor. The chorus has these ironical lines to support the common view that the poor just need to work a little harder: “It ain’t the banks / And it ain’t the taxes / It ain’t the payday loans and high-rent homes / And predatory fees and practices”.

(https://www.youtube.com/watch?v=I6vjaimSK4E)

Jim Blaine is the counter example to Jesse’s satirical critique of those who blame the poor for being poor.

A Common Mission

Both men are outspoken, but grounded in the belief that change can happen. They are unconventional in their approach to their professions so are unlikely to be honored by the establishment.

Both believe in protecting the vulnerable, standing up for justice and caring for “the least of these” in our communities. For them economic justice is moral justice. We cannot remain silent when individuals and families are preyed upon by a system that celebrates profit as its highest priority.

These two voices illuminate a shared vision. Together they challenge us to live into our better selves.