A Shadow Taller than Ourselves?

During this summer’s  legislative and budget battles in DC various spokespersons presented the credit union point of view.  Protecting the tax exemption, interchange fee status quo or jumping on the regulatory reductions were top concerns. Often the credit union position was defended by citing  the special value coops provide members.

In one situation a CEO’s testimony would have been contradicted by his own institution’s performance and priorities if Congress had bothered to look it up.

McCormick Foundation Professor Mohanbir Sawhney describes this natural tendency for exaggeration. While his description focuses on individual behavior, it is also relevant to institutional promotions:

“It’s often necessary to cast ourselves in a favorable light on social media, in resumes, in job interviews, and even on first dates. 

But in doing so, sometimes we end up creating a shadow of ourselves that looks taller than who we really are,” Sawhney says in a video on humility. 

“When this projection stretches beyond the bounds of reality, we can start to feel disconnected from ourselves, from others, and from opportunities to grow. 

That’s not to say that we shouldn’t promote ourselves or polish our brand. Rather,  we should do so, but with humility—by standing tall quietly, without fanfare or drama, and by being confident, but in an understated way.

Do Results Align with our Vision?

The issue is alignment between who you say you are and who you actually are.

Humility isn’t smallness or silence. It’s clarity. It’s knowing your strengths without distorting them. It’s being visible in the right way, for the right reasons.

As the sun sets today, take a look at your credit union’s shadow.   What events occurred  that gives members a true picture of who you are?

Do Cooperatives Change Market Practices?

An historical note to start:  Today is Constitution Day in the United States, because it was on this day in 1787, at the old State House in Philadelphia, that the final draft of the Constitution was signed.

From Jared Brock on capitalism’s financial incentives:

Turning anything — money, houses, scotch — into investment products skyrockets the price of things.

Financialization… the process of turning anything into an investment… skyrockets prices.

Think Taylor Swift concert tickets, Beanie Babies, baseball cards, cryptocurrency, etc.

Turning an item into an investment increases its price.

We’re currently witnessing this with the financialization of classic cars, high-end wine and scotch, and fractional investment in paintings.

A rare piece of canvas covered in colored paint is only “worth” $100 million if the investor knows he can rent that painting to a museum and re-sell it for $110 million in the future.

Because it’s more profitable to get rich by monopolizing stuff and lending it for a profit instead of actually working to create new stuff to sell, the rich are actually incentivized to bid up prices instead of creating new useable goods and services for others. Shareholders are actively trying to destroy our wellbeing for profit.

From a credit union observer:

Cooperatives are the future of our ecosystem. It is how we take care of each other, how we take care of our community, and it’s how we can create generational wealth for all of us moving forward without being a part of this really extractive system.”

The question:  Do credit unions practice both these economic goals for example in mergers and bank purchases? Is being a part time coop good enough?

Jump the Likely Drop in Market Rates

Unless there is a complete change in market sentiment or a “black swan” event, the consenus is that the Fed will lower interest rates by .25% in September.  Or for sure by October.

If that is your assessment, why not get ahead of the market with a special announcement to your members such as:

We’ve lowered our mortgage rates!

If you’ve been waiting for a sign to buy a new home, this could be it. Take advantage of ournew rate discount

Or it could be auto loans, student loans or HELOCS.

If you wait till the Fed makes a move, you will just be part of the market’s noise.

Why not get ahead of the game?  Start your “lowering our rates” campaign while everyone else just talks about it.  The President might even take note of your initiative!

Learning from History as We Debate the Past

Eighty years ago in August  1945  America exploded atomic bombs over Hiroshima and Nagaski. These actions propelled a quick end to the war with Japan.

President Truman’s  decision has been much debated since.  Some believe it was necessary; others disagree arguing that either a “demonstration” explosion or continuing the fight with an invasion of the Japanese homeland was the better next step.

As the topic will again be raised this week, I believe history provides an important perspective on this  decision. And insight as to how  we justify decisions now.

Two Post WW II Events

There were two WW II  related events that occurred when  while I was in the Navy on a ship homeported in Yokosuka, Japan.

The first was the return of the Okinawa islands to Japanese control via a treaty signed  in June 1971.  Return of this part of the Japanese territory was very emotional and deeply meaningful to the country.  Today Russia has failed to return the northern islands of Hokkaido they occupied at the war’s end.  It has left a deep emotional scar on the country’s  national pride.

The second was the surrender of the last Japanese soldier from WW II .   I remember the Japanese newspaper and TV accounts of this March 1974 event.  Here is  how the BBC described the event:

Lieutenant Onoda finally handed over his sword on March 9th 1974. He had held out in the Philippine jungle for 29 years. In interviews and writings after his return to Japan, Lt Onoda said he had been unable to accept that Japan had capitulated.

To many outsiders, Onoda looked like a fanatic. But in imperial Japan his actions were perfectly logical. Onoda had sworn never to surrender, to die for the emperor. He believed the rest of his countrymen, and women, would do the same.

Japan’s Internal Divide on WW II Surrender

Recognizing the Japanese strong allegiance to their homeland and their loyalty to the Emperor  exemplified by Lt. Onoda (who died in 2014), one can understand how difficult the decision to end the war was for Japan’s leaders.

The  internal political debate was intense. Whether Japan should accept  unconditional surrender or continue to fight is  reported in historian Martin  Gilbert’s book The Second World War.

At the very moment when the Nagasaki bomb exploded, the Japanese Supreme War Direction Council was meeting in Tokyo.  News of the bomb led to a renewed discussion as to whether Japan should accept unconditional surrender.  

The Council was evenly divided; three generals were for surrender, three for continuing the war.  The Foreign Minister, Shigenori Togo, cast his vote for surrender, as did the Prime Minister, Admiral Suzuki.  But the Minister of War, General Anami, was emphatic that there should be no surrender.  “It is far too early to say that the war is lost,” he told his colleagues, and he added:  “That we will inflict severe losses on the enemy when he invades Japan is certain, and is by no means impossible that we may be able to reverse the situation in our favour, pulling victory out of defeat.  Furthermore, our Army will not submit to demobilization.  And since they know they are not permitted to surrender, since they know that a fighting man who surrenders is liable to extremely heavy punishment, there is really no alternative for us but to continue the war.”  

The impasse was complete; but Togo and Suzuki were determined to end the war at once, and, in a secret meeting with Hirohito, prevailed upon him to summon a further meeting of the Supreme War Direction Council, and to preside over it himself.

The meeting took place shortly after midnight, in the Emperor’s underground bomb shelter.  First Suzuki read out the Potsdam Declaration.  Then, Togo urged its acceptance, provided that the position of the Emperor and the throne could be respected.  Suzuki supported Togo, General Anami opposed him.  For nearly two hours the discussion continued.  Then Hirohito spoke.  “Continuing the war,” he said, “can only result in the annihilation of the Japanese people and a prolongation of the suffering of all humanity.  It seems obvious that the nation is no longer able to wage war, and its ability to defend its own shores is doubtful.”

The time had come, Hirohito told the council, “to bear the unbearable”.  He therefore gave his sanction to Togo’s proposal that Japan should accept unconditional surrender.  The message to that effect, a formal acceptance of the Potsdam Declaration, was sent out from Tokyo, early on August 10, to the Japanese ambassadors in Switzerland and Sweden, for transmission to the Allies.

Is History Inevitable?

When an historical event is done, the outcome can seem almost inevitable.  In the use of the atomic bombs, there is an ongoing issue with the counter-factual argument that the US not have used the atomic weapons.

I believe the record of the internal political divisions and subsequent events such as the two above, suggest that this option was necessary.  That is not to dismiss the concerns about ever using atomic weapons again nor continue to learn from the aftermath.

I believe this event involved sober discussion and conflicting points of view by both the US and Japan’s leadership.  That is the point to remember today.  Few situations are without options, sometimes better ones, but not necessarily easier.

One of the most important questions any leader can ask in a crisis is what are my options? To describe choices by leaders as inevitable or dictated  by circumstance, takes away the agency and responsibility of those involved.   This is especially true when  the welfare of the whole is overridden by the self-interest of the few.

This acceptance of unalterable fate is a temptation the cooperative democratic system was designed to prevent.  But it hasn’t always worked that way.  Why?

What Do Your Employees Have in Their Wallets?

Which employee benefits are most important  to retaining a stable,  experienced work force?  In the comment below, one CEO reports on his conversations with long-serving employees on their 5-year anniversary dates.

I would note there are many elements to creating a dedicated employee culture and team spirit.  But this benefit seemed to resonate in this credit union.

A CEO’s Analysis of the Importance of a Specific Benefit Plan

I often ask about what has motivated employees to stay with our credit union on their 5. 10. 15. and 20 year anniversaries.

Our 401(k) is usually at or near the top of their reasons. 

Data show we are exceeding the performance of similar-sized credit unions in nearly every measurement:

Contribution Rate: 19% – Percentage of annual salary between both employer and employee contributions.  Peer 12%

Participation Rate: 91% – Percentage of employees that are participating in the plan. Peer85%

On-Target for Income Replacement: 80% – Percentage of employees that are estimated to “replace” 80% of their income with their 401(k) investments. Peers 56%

Investment Mix. 87% – Percentage of employees that are invested at a risk level commensurate with their age | Peers 87%

These employees practice smart financial planning for tomorrow.  How does your retirement plan participation compare?

Disrupting Credit Unions to Again Become a Movement

(Following are excerpts from exchanges between several CEO’s and a person, quoted below, interested in NCUA board openings)

Yesterday I was reminded about the fever of the small business entrepreneur to state their case in the wrong way that is,  the market capitalization (valuation)  of their firm.  

Their need is to be seen as an initiative or startup with the vision of selling the firm.  The goal of inflating the value not for the motivation of living the journey forward, but for being accepted by an audience handicapping their firm’s success and relevance to attract outside observers.

This is not a good look for cooperatives. Their “worth” was never meant as one ready to be traded, abandoned, or evaluated for observers who have no role building the firm.

The Market’s View

Once our industry started to be valued through the eyes of outsiders as a financial marketplace commodity, we were on the path to attracting all the trappings (inside and out) of those who think like commodity brokers.  These market driven criteria have a hard time with the ideals of community ownership (virtual) where acting and living the purpose is far different from cashing in.  

We sold out the magic of financial cooperatives not for the sake of being understood for our contribution and confidence in people acting together.  Rather the goal became putting a number on who we are.  Cash in, pay me, liquidation values, what was the other guy worth?  We strived to be evaluated and on par with ideals that are not the drivers of our member-owners’ success.

This transformation in outcomes is overseen by an out of touch NCUA and professional agents using criteria and motivation that will distort cooperative advantage for decades to come.

We need to hone the collective lens through which we set our vision for a new generation of leaders and oversight which will inspire cooperative entrepreneurs and the vesting and enthusiasm of American citizen owners.  

The Next Steps

  1. Call for the end of the NCUA – start a movement to highlight the fact that CU’s are not a government burden but an independent system wishing for autonomy.

1.a Separate the deposit insurance fund from government regulation and supervisory oversight.

  1. Take the newly separated cooperative insurance fund administration and refocus it on credit union success and nurturing innovation and leadership.

2 a.  Support a public initiative to prioritize league/trade organizational formats to return to advocacy and away from prostituting for commissions!

  1. Start a movement for cooperative entrepreneurial skills and measures that support CU differentials – in accounting, human resource., asset management, and network infrastructure and execution.  Surge collaborative business design initiatives.

Start something worth calling a MOVEMENT again.

On Mergers

  1. Reclassify merger into two transparent market types.

– rescues (with specific criteria)

– mergers for operational gain

  1. Announce a moratorium on mergers coming in 6 months.
  2. Publish an immediate effort for new rules in merger processes and due diligence by members and boards.  Announce new guidelines for explicit tactics around cooperative entrepreneurial ship, consumer-owner engagement goals, and programs for professional compensation over asset enrichment and gains.
  3. Moratorium in place for 12 months.  
  4. After 12 months – implement the new processes.

Your thoughts?  Ideas that certainly fit the times, not the status quo.

Watch Today’s Texas Credit Union Commission’s Live Hearing: Starts at 10:00 EDT

Click on the link below to tune into the live hearing of the Texas Commission which oversees the Credit Union Department (CUD) and its approximately 160 state charters.  Here’s why.

  1. This nine person oversight board sets policy for the CUD.  Five members are “public” and four are credit union professionals.  It is a vital contrast to the current one person NCUA board.
  2. The agenda has several topics relevant for all charters. One is a new merger rule following events such as the Space City-TDECU merger debacle:  Recommendation for Proposed Amendments to 7 TAC, Part 6, Chapter 91, 192 Subchapter J, Section 91.1003 (Mergers/Consolidations) 
  3. Texas’ Commission demonstrates the power of a strong dual chartering system with independent credit union oversight.
  4. The meeting’s agenda covers multiple topics such as an update on the state credit union system, the status of CUD’s 2025 budget and plan, FOIA requests and legal updates–to name just a few.  The comprehensive agenda is an interesting comparison with NCUA board meetings which average three iopics.

An Oath and Ethical Standards

The CUD’s website is filled with information about its policies, rules, employment as well as records of the Commission’s  meetings.  Several observations:

All Texas credit union directors are required to take an oath of office  to sign and return it to the Department. The first sentence reads:  As a director I have a legal responsibility  and a fiduciary duty tp the members to administer the credit union’s affairs  faithfully and to oversee management. , , (emphasis added)
In the CUD’s policy manual there are three pages of Ethical Standards.  The subsections include Principles, Code of Conduct, Code of Ethics, Conflict of Interest, EqualOpportunity and Resrictions.  The CUD’s examiners and staff are well informed about fiducicary responsibilities.
The CUD’s annual budget is approximately $6 million and has an independent annual audit.

Contact Information for the Hearing

The Credit Union Department Commission Meeting is scheduled for Friday, July 18, 2025 at 9:00 AM  (central time zone)

The Agenda (link)

Microsoft Teams Need help?

Join the meeting now

Meeting ID: 234 324 784 323 7

Passcode: Tr2qH72w

Dial in by phone

+1 936-213-5778 United States, Waller

Find a local number

Phone conference ID: 773 558 893#

I’m looking forward to see how this public policy and oversight meeting is conducted for a state that has been a leader of the credit union movement.  

 

 

 

 

The Power of Tradition: The Lesson of Longevity

One of the immediate consequences of mergers of sound credit unions is the loss of their legacy and traditions created by generations of member service.

Often the continuing credit union tries to ameliorate  this wasting  by temporarily retaining the old name while consolidating operations and leadership under outside direction.  And shortly thereafter comes the new brand.

Terms such as “goodwill” acknowledge the real value that the relationships and roles of long-serving firms bring their communities in addition to  their economic contributions.

Family vs Public Business Success

A July 11, 2025 article in Bloomberg Opinion by Adrian Wooldridge suggests that the recognition and respect for a firm’s history may be a critical factors in the long term survival of family business versus that of most public companies.

Below are a few excerpts from his article Europe’s Best Family Firms Have a Secret Weapon Money Can’t Buy.  

Tradition can’t be bought. It’s fashionable in business circles to pass over Europe with a sigh. But the best European family companies have survived everything history can throw at them, and the majority of businesses that have survived for 200-plus years are European,

Part of the answer lies in longevity: The best European family companies have survived plagues, famines, world wars, recessions, revolutions — and continue to thrive. The Henokiens Association, an international club of 57 family businesses that have survived for at least 200 years, includes only ten non-European members, all Japanese. . .

The typical life expectancy of any company, family or non-family, is only a couple of decades, and is falling. What explains the longevity of the best European family businesses? . . .

Tradition. Tradition is a unique resource which newer firms cannot match regardless of how much money they have: Thousands of companies produce wine, for example, but only the Frescobaldis in Tuscany can boast that their ancestor, Dino, rescued the first seven Cantos of Dante’s Divine Comedy from destruction.

Tradition provides impossible to quantify corporate benefits: pride in collective achievements; the self-confidence to make difficult decisions; and, perhaps most important of all, a sense of perspective–family companies are much better than public companies at resisting the pressure of quarterly results for long-term results.

For their part, big public companies often suffer from a “crisis of banality”: in a world that is hungry for meaning, all too many of them adopt identical virtue-signaling language or forgettable names or logos. . .

They should study the art of storytelling practiced by the likes of Berry Bros. & Rudd founded in 1698 selling coffee.  Even as some American tourists like to lament Europe’s supposed decline into a collection of monuments without any economic prospects, some of those monuments contain clever and innovative companies that will continue to thrive even after the giants of Silicon Valley have gone the way of Shelley’s Ozymandias.

The poem’s final stanza:

And on the pedestal, these words appear:
My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal Wreck, boundless and bare
The lone and level sands stretch far away.”
My question: Is the idea that credit unions are like family more powerful than we might at first realize?

Not Your Typical Strategic Planning Question

Lots of talk about strategy is happening now.  For 2026 and beyond.

This public dialogue asks a different question from those posed in traditional planning retreats.

How would you answer?  It could make a difference in your firm’s priorities.

 

Question from a CEO:  Have we become so changed that our shared purpose and collective action is no longer a movement, but instead an industry like so many other market driven and profit making organizations? Even our credit union leaders and advocates refer to us as an industry in the daily rags that I read each morning. What are we now? Are we no longer a movement, whose mission is socially driven?

Response: Ancin Cooley, Principal, Synergy Credit Union Consulting,Inc

To answer your heartfelt question directly:

We are no longer a movement.

What we now have is something far more compromised. What remains today is a quasi-cooperative system—held together by legacy language (”We stand for hashtag#mainstreet values”), but driven mainly by pure capitalists in cooperative costumes.

If you pay close attention, you’ll notice something strange: No one publicly defends these credit union mergers.

Not on video. Not on LinkedIn. Not at conferences.

Why? Because there’s an inherent contradiction between what’s happening and what a cooperative is.

But here’s the truth: this trajectory could shift swiftly if just 20 to 30 credit union CEOs joined their league boards and made their positions known.

Yes, it might cost some relationships. But if someone can’t respect your position, you were never friends in the first place. Your friendship was predicated on compliance. So what if you don’t get invited to DC to take your fourth picture with your local congressman?

If you’re doing right by your members, community, and credit union, those congresspeople will come to your office, not the other way around.

Impact draws attention. Service builds power.

 

A Past and Present Story to Make Every CU Member Proud

A three year old credit union with just 8,000 members received the movement’s highest honor for “Outstanding Achievement” in the 2003 Herb Wegner annual award dinner.

Chartered in February of 2000, in three years the credit union had only $11.0 million in assets. But it was powered by passion, vision and a vital mission.

This excerpt from the Night of Stars video is Chairman John Herrera’s acceptance speech.

In just eleven minutes it is a timeless and powerful message for the difference credit unions make for members, communities and the country.

Several moments to note:

  • The size of the credit union’s “family”on stage with him;
  • His gratitude to the many credit union supporters in North Carolina who helped the startup–at one point he asks those in the audience to stand.
  • Two iconic credit union leaders on stage with his board and staff, Martin Eakes and Jim Blaine (around minute 5:00) who played special roles in this new charter’s progress.
  • His comments on the needs of the country’s 28 million new immigrants: “there are no illegal humans.” (around minute 9:00).  A message for today.

(https://www.youtube.com/watch?v=T9UfOhtljws)

This talk is as relevant now as it was in 2003. It shows the collaborative capability of credit unions to respond to critical human needs.  Service was an essential factor–the staff speaks five languages and although when hours are from 7:00am to 7:00 pm on Mondays and Fridays, the credit union doesn’t close till everyone in line is served.

Latino Community’s Example Today

For the next two decades, Latino Community has been one of the fastest growing credit unions in America.

At March 2025, Latino reported 133,000 members served by 320 employees in 15 branches.   It has a loan to share ratio of 114% with 75% of the portfolio in real estate loans.  Its net worth ratio is 22% augmented by $99 million of subordinated debt.  Without the debt, the equity ratio would be 13.5%.

New credit unions are rare.  Soul Community FCU, chartered by NCUA in December 2024, was closed six months later by the agency.

The capacity to begin new credit unions still exists.  The needs of individuals and communities is as great or maybe even greater in terms of the nation’s wealth inequality.

What is lacking is the spirit at many levels in the coop system to join with and support the passions of the approximately 100 new charter applicants and/or inquiries resting at NCUA.

One of the persons who assisted the Latino start up was Jim Blaine, then CEO at SECU.  He describes the reason this effort succeeded as follows:

In 2000, SECU joined with a host of community activists, churches (the local Catholic Bishop), state/federal regulators (especially NCUA’s RD Alonzo Swann), and numerous other credit unions to help charter Latino Community Credit Union. It was a remarkable cooperative effort. Our unserved and financially at-risk Latino neighbors were the challenge, community was the answer. 

Each group brought a unique expertise but shared the same purpose. SECU provided the operational systems and “back office” support which gave the staff time to learn and grow – time to focus on their community – without the threat of failure.

SECU also sought low-cost deposits for lending from credit unions nationwide; the credit union community responded with over $10 million. Folks often miss what’s most important about LCCU.  Latino yes, but  a credit union community most! 

Would it be so today!  Go back and listen to the last two minutes again for a message that should  be close to everyone’s heart now.