Be Like Mike

Mike Dickersonby Jim Blaine

Mike Dickerson recently retired, after 41 years, as the CEO of Oxford Credit Union. Under Mike’s leadership, the Credit Union has grown year over year – every year for 40 years! During Mike’s tenure the Credit Union increased in assets ten-fold to over $20 million; but funny, no member ever asked Mike “how big” the CU was. Oxford Credit Union was not about size; it was far more valuable than that. Oxford CU focused on service.  Mike Dickerson was one of the finest leaders in our community. In case you didn’t know that, I wanted to let you know why.

Folks usually have an opinion about CEOs – mostly not that favorable. CEO-types often appear a bit too self-important, are not known for humility, and seem to have spent way too much time in front of a mirror. Mike Dickerson was not that kind of leader. He thought common sense was better than an executive coach; he never tried to buy a bank; and he didn’t need a corporate jet to prove he was a leader – because he was the real thing. Mike never took himself too seriously as a CEO, but he was deadly serious about his responsibility to serve the best interests of his members, his staff, and his community. As with all strong leaders, Mike was also called upon to lead in his church, in our electric co-op, and in business and civic organizations.  Mike Dickerson believed life was about serving others. He spent a lifetime doing just that. It was as simple as that.

As leader of the Oxford Credit Union, Mike Dickerson worked hard to help local folks succeed – staff and members alike. He felt that every position at the Credit Union was important; he pushed his staff to discover who they were; he expected everyone to lead. Mike knew that fine folks come from all backgrounds and in all shapes, sizes and colors. The package really didn’t matter; it was what was inside your heart that counted. People knew Mike cared about them. And best of all, he would listen to them! It was as simple as that.   

Small, community-focused credit unions are home grown financial cooperatives – owned by the members who use their services. Access to credit is important to most folks in a small town, because “making ends meet” can be a struggle, there is never enough money to go around, and rich uncles are few and far between. As opposed to other financial institutions, credit unions operate on a non-profit basis and try hard to find ways to leave money in local folks’ pockets. Oxford Credit Union did just that; it practiced what it preached. So did Mike Dickerson – “frugal” was Mike’s middle name. Mike Dickerson took good care of “his stuff” – who else waxes their lawnmower? – and took even better care of his members.  Great leaders always seem to “take it personally”. It was as simple as that.

Mike Dickerson has spent his entire life in Granville County, N.C. and knew his members well. They were his friends, his neighbors, his family. In fact, Mike Dickerson was kin to over a third of his members, over half of them if you counted “by marriage”  – and all of them if you counted their second marriages! That’s the way it is in a small town.  Mike well-understood that when applying for a loan some folks “don’t always look good on paper”, because life can be messy, people make mistakes, things sometimes get out of control. Mike knew how to say “No”, but always sought for a way to say, “Yes”. In lending, “They’ve always done right by us “, was better than a credit score and character was more important than collateral. Mike Dickerson always kept his promises and he expected you to keep yours. If you broke your promise, there were consequences. When funds were short, folks always paid “Mr. Mike”. It was as simple as that.

Mike Dickerson was committed to the folks in our community for over 40 years and worked hard to make our lives better. Mike Dickerson went about his work in a quiet, humble manner. He was faithful in his stewardship as a leader. Mike Dickerson charted a sound path for the Oxford Credit Union; he never lost his way.He probably thought we didn’t notice, – but we did.  Mike Dickerson trusted his members and we trusted him. It was as simple as that.

Credit unions: It should be as simple as that.



Tongass FCU: Microsites and Relevance

A long-time financial consultant wrote me last week:

I will share what I know for a fact: market relevance trumps scale every day of the week. I will concede that part of maintaining market relevance requires continuous investment in your business and scale can help pay for that investment. But scale is not economy of scale. You can be big, inefficient, and fail spectacularly. You can be small, focused, and efficient and blunt competitors all day long.

I have multi-generational clients that are not massive in terms of scale, but they serve their communities better than anyone else. It’s a relationship business. People tend to forget that. Banking is not a transactional business, although people try to make it that way. If you are going to be in the transactional business, then you better have scale and be efficient.

An example of this observation is Tongass FCU ($131 million in assets) founded in 1963 by teachers unable to receive loans from banks because of their seasonal income. Today the credit union headquartered in Ketchikan establishes “microsites” partnering with local sponsors to bring financial services to Southeast Alaska’s coastal villages and towns.

Its motto is offering a credit union where no bank will go. The following are stories by the CEO, Helen Mickel carrying out this financial services mission.

Our First Microsite, then Branch at Metlakatla

Metlakatla is the only Native Indian Reserve in Alaska. It is located on Annette Island, a 12 minute float plane ride from Ketchikan.

Metlakatla was suffering from an economic downturn back in the early 2000’s which caused the only bank, Wells Fargo to shut their Metlakatla “store” in May of 2005. Wells Fargo Regional President, Richard Strutz, explained that, “With the economic decline in the area since 2000, it was difficult to maintain and staff a store.” Wells Fargo has a minimum asset requirement for their stores and the $4 million branch was well below that minimum.

Because Metlakatla is on an island, accessible only by boat or float plane, cash was received only once or twice a week. Following Well Fargo’s closure, the community employees struggled to cash payroll checks through their tribal government office typically running out of cash well before the last person was served. This was in a town that primarily used cash for their purchases. One enterprising resident tried to run an ATM machine, but had difficulties keeping cash in the machine which ran out within hours of being reloaded.

The transportation of cash to the community was a constant problem. The community struggled and asked various financial institutions to come in, but found no takers. Then some community leaders visited Tongass’ then CEO, Susan Fisher, to ask about the possibility of a branch in Metlakatla.

The Credit Union’s officers and staff met with Metlakatla residents in June of 2005. Susan explained the difference between banks and credit unions and described the importance of their involvement for a credit union to be viable in their community. We needed affordable space for the credit union and residents willing to become members who would borrow and save at the credit union.

The credit union began offering services once a week at the Metlakatla Indian Community council chambers in the summer of 2005. Staff members flew to the island, opened accounts and transacted business with new members.

The residents gave us a warm welcome. One member waited for over an hour so he could show us his artwork and his small gift store at the artist’s village. Another member took staff to his house so we could take pictures for a home equity loan. We met his wife who was baking pies that day. She sold them once or twice a week as a small in-home business. Their daughter ran a take-out pizza restaurant out of their converted lower level.

Another member gave a tour showing us Purple Mountain – which brought new meaning to “purple mountain’s majesty, above the fruited plain” from “America the Beautiful.” We saw Yellow Hill – which would look more at home in the Arizona desert.

I fell in love with Metlakatla that day. It reminded me a little of Ketchikan when I was a kid and working at Steamboat Bay on southeast Alaska’s west coast. I felt welcomed and honored.

A New Office

Within months we opened a small office in the old Wells Fargo building doing all our transactions without the aid of computers. A staff of three part-time employees worked just two hours a day during the week. The ATM at the office was re-fitted and fired up right away. Two more ATMs were purchased over time and placed in the mini-mart and bingo hall. In the fall of 2006 computers were installed in the tiny office and our staff began doing real time posting.

In 2010 TFCU was approved for a secondary capital loan that allowed us to invest in a new building in Metlakatla. The new branch was completed in 2012.

Early in our outreach to Metlakatla we established a local advisory board. This board helped TFCU work toward providing services in their unique community. Listening to the community members has been a foundation for our progress on Annette Island.

A sign was requested by the local advisory board for the branch’s exterior. They wanted something that would reflect their culture and their “house of money” which is the Smalgyax translation for bank. In 2017 TFCU was able to connect that request with reality in the form of David R. Boxley’s “Spirit of the Tongass” logo, shown below in Smalgyax .

As of 8/31/21 Metlakatla Office’s numbers:
Members: 1,272
Shares:       $8,037,007
Loans:         $9,574,664


In 2006, we began offering financial services in Thorne Bay.

Our first space was located inside a sporting goods store that was in the lower level of the store owner’s home. The cash was kept in a gun safe and transactions were noted on paper.

Since that time, we have created a more sustainable model, hiring employees, using computers and eventually finding a home in the City of Thorne Bay building.

Thorne Bay became the blueprint for future sites.


In September 2019 TFCU opened our Hydaburg site in their local school with an offer to use an office in the common area. Then in December of 2019 we opened in Kake, sponsored by the Kake Tribal Corporation and located in their office building.

Our most recent community microsite is in Hoonah, opened during the pandemic in June 2020! Our TFCU promise and Hoonah’s commitment made it happen. Before, these communities were “banking deserts” with no available financial services.

We brought financial services to Hoonah in partnership with the Hoonah Indian Association – serving the community from their beautiful canoe shed.

Saving Members Money

CEO’s monthly messages to staff are an important communication on results and vision.

Leaders use stories to illustrate strategic purpose.  They  include examples of what an organization strives to be.

One example is WEOKIE Credit Union’s Jeff Carpenter’s internal newsletter illustrating how it delivers the benefits of cooperative ownership.   The following are vignettes of saving members money by refinancing from much higher rates and by understanding member’s specific circumstances.

The following cases are used by permission with only the names changed:

  • David came in to see if we could refinance his vehicle from Flagship where he was paying almost 17% interest! WEOKIE approved him at 7.49% and lowered his monthly payment from $660 to $400. David left happy knowing that not only would he be paying less every month, he also is saving over $3,000 in interest.
  • Rebecca consolidated her credit card debt with us. She was paying 24.99% and higher in interest on her credit cards. We were able to lower her interest to 11.99%. This saved over $2,400 in interest alone! The new monthly payment of $211.00, including payment protection, is $200 less than it was before!
  • Jordan refinanced his auto loan with WEOKIE at a 2.99% interest rate. The dealership had originally financed him with Santander Bank in Texas at a 20.99% interest rate. After some time building his credit and making good payments, he was able to refinance at this significantly lower rate. He will save about $7,601.41 in interest!
  • James refinanced his auto loan with WEOKIE at a 7.24% interest rate. He reluctantly financed with Capital One when he purchased the vehicle with a 15.67% interest rate. WEOKIE was able to cut his rate in half, which will save him about $8,207.30 in interest!
  • Ed came in asking for a payoff quote on his auto loans. Kady asked him why he was needing a payoff and he said he was refinancing to lower his interest rate. She asked more questions and learned he is purchasing another rental property. His goal was to reduce his debt to income ratio since he always does really short terms on his auto loans. After learning more, we proposed a cash out loan and lower interest rate to help him stay with WEOKIE. We were able to lower his rate to 1.99% extend his term to 60 months, lower his payment from $886 to $536 AND give him $15,000 in cash for his new rental purchase! Ed was ecstatic we could help him reach his financial goals without leaving WEOKIE!

Examples Tell the Cooperative Story

These cases demonstrate the credit union difference more concretely than general slogans.   They recognize staff initiative and document specific member benefits.

Stories are easier to remember than grand plans.   Thanks to Jeff and his team for sharing these examples of cooperative employees making a difference.

The Latino Community Credit Union-A Timeless Example of Cooperative Action

The 2003 Herb Wegner award for outstanding organization is perhaps even more significant today than when granted almost two decades ago.

Here is co-MC Annaloro’s description of the special nature of this award which had been given only 14 times before.

In 2003, Latino credit union was three years old, held $11 million in assets and had just 8,000 members.  Even then the credit unions was know for “punching far beyond its weight class.”

As Chair Chuck Purvis stated in his opening remarks, it is an example of the movement coming together to “effectively serve the needs” of the Hispanic market.  And those needs were clear and unmistakable as documented by the introductory 10 minute video from that evening. Why a credit union for the Hispanic community:

Latino Credit Union Today

This is a powerful example of credit union’s ability to respond to some of the most vulnerable persons in our society.  Few could foresee what the long-term results of this initial organizing effort would be.

Today Latino Community Credit Union has $663 million in assets and continues it focus on lending with a loan-to-share ratio of over 100%.  It has a below peer operating expense ratio even though it manages 13 branches with 157 employees serving in excess of 101,000 members.

Every aspect of its performance is exceptional with recent annual growth in shares (24%)  and loans (28%) at the very top of the industry.  It reported net worth of 11.2% at June 30 even with this high level of balance sheet growth.

Latino’s Meaning for Today

When passion and commitment meet human need, the opportunity for success is great.  This is the circumstances in which credit unions were begun in 1909.  Inequalities and vulnerable populations have not disappeared from American society.   The continued growth of payday lenders and check cashiers is an ongoing example of persons living paycheck to paycheck

Latino also shows the power  of new startups.  Some today disparage the efforts to form new credit unions.  They point out their small size forgetting that every credit union that exists today started small. Some point out the capacity of existing credit unions to serve more-and yet many parts of the their current FOM’s remained unserved or underserved.

Succeeding from scratch is not an easy thing to do.  Latino maximized its chances of success by getting inspiration from those who had already achieved what they want to accomplish.

We will learn in tomorrow’s acceptance speech, how these people became mentors-”family”-helping along the way.  Mentors increase the chance of success because they will have already confronted many of the questions that determine whether or not a start up will succeed.

We will see these people stand on stage with the Chair of Latino Community as he reminds us of a message-especially relevant today-why America needs more credit unions.


SECU’s Mike Lord: Two Remarkable Accomplishments

The CEO of the $50 billion State Employees’ Credit Union (SECU), Mike Lord retires at the end of this month. His career is noteworthy for two remarkable achievements:

  1. He successfully navigated 30 years of intellectual contrarianism with Jim Blaine, his boss. Jim’s motto is “often wrong, but never in doubt.” His public name-image-likeness (NIL) brand is an animal of the horse family, but typically smaller than a horse with longer ears and a braying call.
  2. Against all odds, he sustained and expanded SECU’s exceptional level of leadership and member well-being as Blaine’s successor in 2016.
    Succeeding a legend and then taking results to a new level whether in business, coaching a sport, politics or any field of public endeavor, is an incredibly rare event.

“Don’t Mess It Up”

The management consultant Peter Drucker stated, “the most common source of mistakes in management decisions is the emphasis on finding the right answer rather than the right question.”

For Lord and SECU that question has always been how to enhance member service. The mission and vision of the credit union are folksy truisms: “Send Us Your Mama” and “Do the Right Thing.”

When Lord became CEO in 2016 his stated goal was just as straight forward: “Don’t mess it up.”

In today’s individualistic culture that celebrates personal achievement, choosing a leader where the mission supersedes personal ego is a tribute both to the organization’s values as well as the leader’s character. Especially so in the second largest credit union in America.

An example of these values is SECU’s compensation practice. The credit union follows the “Mondragon model” to assure balance among all staff. There are no perks, no bonuses, no incentives and all staff receive the same benefits (health, retirement). This means that SECU CEOs are not paid the multi-million salaries prevalent at many smaller, less complex, less successful CUs.

Focus and Consistency

Several decades ago, SECU’s Board decided to “limit” SECU’s FOM to North Carolina. Those members who moved out of NC or lived in foreign countries could remain, but if they wanted loan services they were referred to a local CU. This focus on the core members who “brung us to the dance,” makes SECU a formidable force against major national banking competitors, several of whom call North Carolina home: Bank of America and Truist.

Today SECU serves 1 in 4 North Carolinians. Rather than trying to be a “national” credit union, its statewide focus has improved economic prospects for individuals and communities that are little more than an afterthought for large competitors.

Sustaining success following the iconic 30-year tenure of Blaine required an underrated leadership trait, consistency, one of Lord’s strengths. While he may have had to go outside of SECU for some expertise, Lord continued to promote from within for employee advancement. Front line staff are much more than transaction providers. Some even receive training in multiple areas of financial service, including tax preparation, life insurance and investment counseling, while earning the appropriate license for each discipline.

Traditional media advertising was shunned. The credit union relied on word of mouth and its foundation’s public philanthropy to keep the SECU name in the press. The funding of scholarships for every local education agency in the state, contributing to teacher housing, new hospice facilities and dozens of other projects projected a “brand” deeply involved in members’ communities.

A Cooperative Financial Conglomerate

Describing SECU as the second largest credit union in the US does not begin to define the scope of its member services. With the credit union at its core, the credit union also oversees the following organizations-CUSO’s:

  • SECU Life is the only CU-owned life insurance company in the US. Other CUs which offer insurance do so as an agent for an outside firm;
  • A broker dealer and investment advisor that developed a unique partnership with the low-cost Vanguard mutual fund family for members seeking off balance sheet investment options;
  • A 501(c)3 Foundation that donates over $15 million per year for community needs in North Carolina;
  • A property management company (SECU*RE) that owns and manages 1,500 properties to provide housing, and improve declining neighborhoods, sometimes even selling homes to members. This company is for-profit, taxable and was begun as SECU’s response to the 2009 housing crisis. Its purpose is to reinvest in neighborhoods, prevent bottom fishers from underpaying for foreclosed properties, and provide renters a better choice than local slum lords.

With these multiple business lines come many regulators: NCUA’s ONES and North Carolina’s Credit Union Division of the Department of Commerce, NC Department of Insurance, CFPB, FINRA/SEC, and of course the IRS for the Foundation.

Staying Local While Becoming Larger

With a branch in every county of the state, the credit union’s over 270 locations operate like small credit unions. They provide local employment, knowledge and expertise for every part of the state. Branch managers consult with local advisory boards and often make recommendations for SECU services or foundation grants for their areas.

Lending decisions are all made at the branch level. Branch personnel are intimately familiar with local economic conditions and politics, even in the smallest community. This gives SECU deeper insight into all things economic when making loan decisions and keeps charge-offs way below peer averages.

A Simple Product Profile

The primary purpose of each SECU product is to help members become financially stronger. The credit union’s primary product for helping members build wealth is a variable rate home loan to encourage home ownership. Its loan portfolio is 74% first mortgages.

For over a quarter of a century SECU has made 100% mortgage loans with negligible losses to help lower income and young folks achieve home ownership. Underwriting was based on the common-sense idea that if members pay rent reliably they can be counted on to pay the same amount on a mortgage to own their home. These mortgage loans also invested billions in communities throughout North Carolina’s economy, not just in wealthier big cities.

There is no risk-based loan pricing: each product has a single rate whether a credit card, auto or other lending need. Each loan is based on individual underwriting, not credit scores. SECU’s Salary Advance loan has made billions in payday loans to members at APRs less than 15%. The program, which also has a savings component, fights for-profit payday lenders who prey upon the least advantaged in the economy.

In addition to traditional savings and share drafts, the credit union has $170 million in a 529 college savings plan, $67 million in HSA accounts, and $ 4 billion in IRA/Keogh retirement savings. SECU’s 529 plan is a financial “safer option” for all participants in North Carolina’s college savings program, not just SECU members. That selection says much about the confidence in SECU within the state.

As with loan pricing, there are no savings tiers based on account balances–all 2.6 million members receive the same rate on each product.

Serving the Cooperative System

SECU’s influence extends far beyond its 2.6 million members. Within North Carolina’s cooperative system, the credit union supports others who might reach out for mergers to offer mentoring and resources so they might continue their independent journeys. These operational alliances continue today with Local Government FCU, Latino Community CU, North Carolina Press Association Federal Credit Union and Greater Kinston Community Credit Union.

Greater Kinston is the last survivor of 55 credit unions chartered by the black community during the Jim Crow era when financial services were not open to them. SECU was also a leading fundraiser for the Martin Luther King memorial in Washington, DC.

At a time when many peers proclaim institutional growth as the critical performance objective, not members’ financial well-being, SECU adamantly asserts this is a false dichotomy. Members are the credit union.

As many leaders focus on innovation and the allure of the self-service virtual future, SECU continues the traditional embrace of a face-to-face relationships– for all ages from the newborn to the retiree.

The bedrock of its strategy is the cooperative model with all its inherent design advantages versus other firms. Member-ownership is the unmatchable competitive difference. It implements what writer Ken Wilber calls “good power” in which organizations protect the many who are often at the mercy of the firms they use. He contrasts this “good power” with the instinct of “dominant” organizations that use their position primarily to protect, maintain and promote their success at the expense of others.

SECU proves that size does not dilute cooperative values or purpose. It is a powerful example of the ability to achieve mission and counter the prevailing tendencies of credit unions to become more and more bank-like.

SECU demonstrates that economic, social and political influence can be accomplished by implementing and innovating traditional cooperative principles. Its success validates the credit union system’s contribution for both its members’ financial health and for co-ops as an essential part of the American economy.

Sitting in the Same Place Where He First Began

SECU has been developing system leaders, not only by hiring at the entry level and promoting from within, but also by sending leaders to over 30 other credit unions. Some–Tom Dorety, Terry West, Maurice Smith, and Tom Feindt– ran billion-dollar shops while others migrated to smaller but no less vital firms.

Lord’s career exemplifies this leadership development capacity. In a 2016 interview after becoming CEO, Lord pointed out his office was at the same location where he first began his career 46 years earlier. Albeit in a very different building. Lord’s career exemplifies a critical life lesson, awareness of one’s “true home.”

In a poem called “Little Gidding,” T.S. Eliot ends his quartet by writing:

We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.

Lord is the rare exception to Eliot’s observation of human nature. For without exploring, he knew the place he belonged, from the very first time he arrived.

Two Reflections from Memorial Day

Opposition to the Vietnam war on many college campuses led to the cancellation of ROTC programs.  Subsequently the draft was ended with all branches of the military now relying on volunteers to fill their ranks.

One observer commented on the fewer ROTC programs and the elimination of the draft as incentives for college graduates to serve in an all-volunteer military.  He foresaw a possible outcome as follows:  Societies fall to folly when they draw distinct lines between their warriors and scholars. What this ultimately leads to is society’s thinking done by cowards and its fighting done by fools. 

What if we are called to serve and fail to answer?

The heydays of credit union charters began in the Great Depression with passage of the Federal Credit Union Act in 1934.   Post WWII saw another upsurge in new chartering activity.  From 1949-1970 between 500-700 new FCU charters were issued per year.

By yearend 1978, when NCUA became an independent agency, 23,278 federal charters had been granted of which 12,769 (55%) were still operating.

Many factors affected this chartering explosion.   One was the social ethic of the Greatest Generation.  The cooperative values of self-help, local leadership and community service were closely aligned with the ethos of the generation forged by depression and world war.

Some writers believe this capacity for social responsibility has been superseded in current generations by a more individualistic focus,  personal independence  and financial success.

A guest editorial by Margaret Renkl on this change of values was published Memorial Day, May 31, 2021 in the New York Times.

My question is whether this attitude might contribute to the virtual absence of new charters in this century.   There have been 193 FCU’s in first 20 years of this century, or fewer than 10 per year.  Here are several excerpts of the writer’s thinking:

“Young men of my father’s generation grew up during wartime and generally expected to serve when their turn came. No generation since has felt the same way. There are compelling reasons for that shift — the protracted catastrophe in Vietnam not least — but I’m less interested in why it happened than in what it tells us about our country now. What does it mean to live in a nation with no expectation for national service? With no close-hand experience of national sacrifice? . . .

 The need for some nonmartial way to nurture communitarian qualities is more urgent now than ever. We have lately been reminded of the absolute necessity for Americans to be motivated by warm fellow feeling across divides of region, race, class, politics, religion, age, gender, or ability; to cultivate a sense of common purpose; to make sacrifices for the sake of others. And that reminder came in the form of watching what happens when such qualities are absent, even anathema, in whole regions of the country. . .

If Vietnam exploded the unquestioned commitment to national service, the coronavirus pandemic should have been the very thing to bring it back.

That it did exactly the opposite tells us something about who we are as human beings, and who we are as a nation. There is more to mourn today than I ever understood before.” 

The Question for Credit Unions

To the extent that our society has lost capacity to “nurture its communitarian” responsibilities, how does this affect the cooperative model?  Credit unions rely on volunteers. Their greatest strength is the fabric of relationships they cultivate with members and their communities.   Has the model lost its way as a new generation of leaders takes control without a link or even knowledge of the qualities that created the institutions they inherit?

Have credit unions abandoned their capacity to cultivate a sense of common purpose; to make sacrifices for the sake of others now that they have achieved financial sufficiency and can stand apart from their roots?

Is credit union leadership today susceptible to the social folly described by the first writer?

An Unexpected Surprise From a Competitive Board Election at Frontwave

The response to my request for blog topics was blunt: “Board governance! Perhaps stemming from the frustration I feel on my own board. No relevant questions. No strategic discussions. No pressing in on how we can be better. No self-evaluations. Credit unions won’t survive with boards who simple show up and say aye.”

Then I learned how one election stimulated a complete renewal of the board’s role.

The Story

Frontwave Credit Union CEO Bill Birnie was “stunned” to learn the number of members who applied to compete for three open board seats in the 2021 annual election of directors. “Normally we have to beat the bushes for board and supervisory members.”

This year was different. The nominating committee approved ten applicants for a spot on the ballot. All submitted written statements with their professional background and why they wanted to volunteer.

Contested elections were rare at Frontwave (renamed in 2018) and even in its earlier era as Pacific Marine Credit Union.

The credit union put out its routine “Calling all Leaders” appeal in July of 2020 via email, a web posting and a member mailing on September 15. Headlines included: “Frontwave members make good leaders” “Got Frontwave Values?” “Help Members Financial Dreams Come True,” along with facts on the open positions and terms.

Highly Qualified Applicants

Among the applicants were nine with college degrees including four with MBAs. Their occupations included an active-duty marine, VP of finance, SVP asset-liability manager and budget analyst. Most had experience in an area of finance or management.

In addition, they were active volunteers in the community. Some examples: a college trustee, school district board member, and current board or past officer of nonprofit organizations and educational associations.

Why the Surprising Interest?

Since renaming as Frontwave, the credit union has grown over 40% to $1.1 billion in the highly competitive San Diego market. Bill, the President, had rejoined the credit union 2015 after serving as CEO for Eagle Community Credit Union. Bill believes that the dramatic increase in volunteer interest is a response to the credit union’s innovative spirit shown by its rebranding, and its increased visibility in the community with 14 branches, only five of which are on base.

The credit union’s surveys documented a 35% increase in positive member satisfaction, another factor galvanizing participation. The volunteer surge, Bill believes, reflects a growing respect for the credit union in the community.

Reasons candidates gave for their interest included:

  • “To bring expertise, energy, and intellectual capital to power Frontwave’s success and strengthen our community. To represent the diversity and social culture of my community.”
  • “I would like to help Frontwave reach their objectives and build value for members…lead(ing) to greater financial success of our members.”
  • I want to have a “meaningful personal commitment to serve veterans and specifically Marines; real potential to have a tangible, lasting impact on their quality of life.”

The Vote by Members

The online voting period extended from February 24, 2021 to March 24, 2021. Members could submit ballots at any of the branches from March 8, 2021 to March 19, 2021. The vast majority voted online. The number voting, 583 members, was almost equal with the last election in 2018.

The electronic ballot form provided an opportunity for members to comment on the voting and election process. Their comments were positive, particularly placing the candidates’ information within the ballot:

  • “The (digital) interface is very easy to use…I like being able to open a page with all the bios while viewing the ballot at the same time.”
  • “The bios gave a very personal involvement.”
  • “The voting process is great reading all candidates listed in the process I didn’t know them, but by reading their bio gave me an idea of what they are all about. love it.”
  • “I was so sure that this online voting process would be difficult, but amazingly, it wasn’t and I’m glad I was able to vote. Thanks.”
  • “Very fast way to cast my ballot. I like to vote this way.”
  • “WOW a lot of qualified candidates. This is the first time I have seen so many people run for a voluntary position. Good luck.”
  • “I haven’t met any of these people, so I am voting based on the bios alone; they all seem like strong candidates to me.”

Lessons to Build On

Both management and board see this enhanced member interest as a “wake up” call for the credit union. Members were engaged in the election. The current age and tenure of the board suggests there will be more openings going forward.

The board is embarking on a self-assessment to evaluate their current skills and ascertain what the credit union needs going forward. The directors will provide the nominating committee guidance about the qualities and experiences they seek in candidates. The timeline, candidate qualifications and selection process may require further refinement with this new level of engagement.

While initially surprised, Bill Birnie now views this elevated interest as an opportunity to enhance the board’s contribution and engagement. The election has begun a process of board renewal: “We’re required to hold an annual meeting of the membership and, if needed, conduct an election. If we are going to do this, we are going to do it right.”

My reader above opined: “Credit unions won’t survive with boards who simply show up and say aye.” This example could be the best response to this “board governance” challenge.

Readers Opine On Infinity FCU Merger with Deere Employees

Readers reacted to last week’s analysis of the Infinity combination with Deere.

A Maine resident: “Very strange indeed – for many reasons; it goes completely against the Maine community approach of being a state with their own mind and will.”

Two comments posted on blog site:

1. Why, why, why? I can’t make any sense of what Liz is saying. . .Wonder what NCUA CURE will have to say?

2. Size matters to Liz and not a single Maine CU wanted to merge with her.

A Financial Consultant to Banks and Credit Unions:

  1. At $341 million, there is enough “scale” to not just survive but thrive. It’s a matter of allocation of resources. I work with a lot of community banks that are doing just fine at that asset size; quietly going about their business producing a good ROA and accreting capital. Relationships drive their business model and that’s what the competitors don’t provide.
  2. The board needs to be committed to independence. The board needs just one member who understands this, is committed to it, and can influence the other board members.
  3. The CEO and leadership team need to be committed to independence. . . there needs to be something holding the team accountable. If there is a merger, capital should be returned to members, not given to acquiring institution for free.
  4. This is a horribly unproductive credit union. The leadership team needs a kick in the pants in terms how they are deploying the resources the members entrusted them with.
  5. The banker in me says this would be an ideal takeover target. They have a great balance sheet. I’d cut out a lot of expense, and turn this into a money-making machine for CU purposes. It would mean being a lot more productive, and use the capital for growth, member give-back and/or community impact.

The CEO is speaking out of both sides of her mouth. What is the board’s relationship with the CEO if unable to do the job to begin with? Are they competent to govern?

A Coincidence? Two Credit Unions Rethink: Maine Credit Unions Call off Merger- Consolidation discussions end amicably between Midcoast FCU and Maine State CU. March 26, 2021 CU Times.

From a Member Who Just Experienced a Merger:

Just touching base after reading this article about Infinity and Deere. Sounds so much like my member story with Xceed merging with Kinecta.

On March 17th Kinecta FCU sent me a similar packet with a Cover Letter highlighting 3 big changes, a joke. The number 1 bit of news is Reducing of the Insufficient/Uncollected Funds Fee from $27 to $25! Its borderline insulting to think longtime members of a well-run credit union would jump for joy on that news. 

Chase Bank is offering a $200 to new customers and free checking with direct deposit. My folks have used Chase since it was called Chase Manhattan Bank, I think since the 60’s. They have been happy with Chase for 50 some years. 

It seems like credit union mergers have become so common it might happen to a person more than once. It’s like opening a new bank account, changing direct deposits, automatic bill payments and so on. I keep my credit reports locked so unlocking them is an added step. 

Its kind of sad but I’ll miss banking with the same place for so long. I remember when working for USAA after leaving Xerox in the 1990s. Xerox FCU still had a small two-person branch in Clearwater, FL for a few thousand Xerox employees/families in the Tampa Bay area. How many financial institutions today would go the distance to have a two-person branch? I think with all the mergers the days of that kind of a credit union operation are coming to an end.

Rather than go kicking and screaming into the Continuing Credit Union Kinecta, I’ll quietly leave my employer created credit union of 30+ years for my family’s national bank. And $200. 

An Historical Perspective:

“All things are lawful, but not all things are beautiful. All things are lawful, but not all things build up. Do not seek your own advantage, but that of the other.”

The Resilience of Small Firms

Ed Callahan championed credit unions, even smaller ones, for offering consumers a choice.  A member-owned option was vital to an economy dominated by for profit firms.

From his prior experiences growing up in Youngstown, Ohio, teaching high school in Milwaukee, WI and Rockford, Il. he knew the power of local institutions.  Size did not matter.

The effectiveness of local, nimble institutions has been described in two recent articles.  One focuses on local farmers; the second on distributing Covid vaccines via small, single store pharmacies, not national chains, in two states.

In both case studies, the reader could easily place credit unions as further examples of the responsiveness local ownership provides.

Efficiency is Not Resilience

The efficiency curse describes the effectiveness of small farmers adapting more readily to market disruptions of food distribution during the pandemic.

“Efficiency is a wonderful thing. It can result in benefits such as lower prices and better uses of resources. But a hyper-specialized system is more vulnerable to disruption; it is not resilient.

“Smaller farmers are doing relatively well. According to Civil Eats, farms with existing CSAs (Community Supported Agriculture) have seen “a massive increase” in memberships since the start of the pandemic, with some reporting a 50 percent bump in sales. One California farmer said, “It took a pandemic for people to support local sustainable agriculture again, and home cooking, and ‘know your farmer.’ ”

“Why don’t we pay as much attention to the benefits of resilience as to the benefits of efficiency? We tend to get good at what we can measure, and it’s easy to produce numbers that support efficiency, such as crop yields per acre. Resilience cannot be easily measured, though. Its benefits are most evident during the catastrophes that can’t be predicted and the trends that haven’t been foreseen.

“One striking thing I’ve learned is that many (industrial scale) farmers and companies lose track of who’s eating their products. 

“That sense of interconnectedness is, for me, one of the most powerful and hopeful lessons of the pandemic. People who had never given much thought to where their food comes from suddenly learned something about farms and farmers. Which is to say, they learned about our interconnectedness. The pandemic has shown us that the world is much more connected than we thought.”

The “Know Your Farmer,” bumper stickers of the sustainable-food movement might be translated to “Know Your Member” as the mantra for credit unions.

Nimbleness and Local Knowledge Beat Big Chains

A second example, “Small Pharmacies beat big chains at delivering vaccines,” showed how local independent pharmacies were more effective delivering Covid-19 vaccine shots than large retail chains. The reason: “local owners know their community best.” But even more relevant for credit unions is the author’s assertion that government policy makers promote bigness allowing “market power abuses.” The parallel to today’s merger sales of long-standing sound credit union charters, could not be clearer.

“More than a month into the coronavirus vaccine rollout, only about 60 percent of the doses distributed across the country have actually made it into people’s arms, according to federal data — a discouraging display of inefficiency. But a handful of states are far ahead of the pack. At the top of the list are West Virginia, which had given out 84 percent of its doses as of Friday, and North Dakota, at 81 percent.

“Many factors are slowing distribution. But one key element appears to be the type of pharmacy states choose to work with. While the federal government partnered with CVS and Walgreens to handle vaccinations at long-term care facilities in the first phase of the rollout, North Dakota and West Virginia have instead turned to independent, locally owned pharmacies. Small drugstores are prevalent in West Virginia, and in North Dakota they’re just about the only game around: A 1963 law mandates that only pharmacies owned by pharmacists may operate in the state (save for a few grandfathered CVS locations).

“These small providers have proved remarkably nimble. Meanwhile, CVS and Walgreens have stumbled.

“The vaccination results in West Virginia and North Dakota have prompted a wave of national news stories, noting how startling it is that two rural states relying on local drugstores — the epitome of the old-timey “mom and pop” stereotype — have rocketed far ahead of states like Massachusetts and Virginia, with their networks of supposedly sophisticated chain pharmacies that have largely replaced the independents.

Public Policy Treats Small as Expendable

“For decades, Americans have been steeped in the idea that big businesses naturally outperform small ones. Indeed, much public policy is predicated on this belief. Our antitrust rules bless most corporate mergers on the grounds that larger companies are more efficient. Our financial regulations grease the flow of capital to the biggest firms. And in unstable times, the federal government almost invariably steps in to ensure their survival, while treating small businesses, local banks and family farms as expendable.

“So ingrained is this ideology of bigness that we routinely overlook evidence to the contrary. The fact is independent pharmacies have been outperforming their larger rivals all along. According to research by Consumer Reports, for instance, local pharmacies generally offer lower prices than the chains. And while the major chains only recently began offering one- or two-day home delivery, most independents have been providing same-day delivery for more than a decade (and most do it free).

Better Results from Being Small

“Independent pharmacies achieve superior results not despite being small, but because they are small. It’s their local ownership that makes the difference. Their decisions are guided not by the prerogatives of Wall Street but by the healthcare needs of their neighbors. Lacking top-heavy bureaucracy and rich with local knowledge and relationships, independent pharmacies possess what you might call economies of small scale. That helps explain why, in the places where they’ve been tapped to provide vaccinations at nursing homes, they’ve been able to quickly map out a plan and efficiently execute it.

“Like pharmacies, small banks derive advantages by virtue of being locally run that big banks simply cannot match: The owners know their communities and their borrowers, giving them access to a rich trove of “soft” information that enables the institutions to extend loans to new and growing businesses on the basis of factors that aren’t easily quantified and don’t fit the rigid parameters of big-bank lending. This is true not only during crises like the pandemic: Community banks account for less than one-fifth of the industry’s assets, but they supply nearly half of all lending to small businesses.

Regulatory Bias for Bigness

“So, if local pharmacies, banks and other businesses are outcompeting their biggest rivals, why are they losing ground? The number of independent pharmacies, for instance, has dropped by nearly 1,400 over the last decade, to 21,700 — and their market share has fallen from 28 percent to less than 20 percent.

“The answer is that policymakers, convinced of the inherent superiority of bigness, have allowed a few corporations to amass outsize power and wield it with impunity. Rather than compete head-to-head with their smaller rivals on price or service, these huge companies can simply crush them. (ed. or buy them out via mergers)

“These kinds of market-power abuses are rampant across the economy, but we’ve been conditioned not to see them. Confronted with yet another shuttered storefront, we take it as simply more evidence that small businesses can’t compete.

“It’s not just some hazy nostalgic feeling that we’re losing when independent businesses close. The stakes are much more consequential. We’re trading away some of the most productive and effective parts of our economy. The strong performance by local pharmacies in distributing lifesaving vaccines makes that clear

The Takeaway for Credit Unions

Every time a sound, locally supported and managed credit union is merged, the local economy, the cooperative system and the American marketplace is less diverse, nimble and responsive.

Hamilton: The Credit Union Connection

The family of Lin Manuel Miranda, the creator of the historical musical Hamilton, is from Puerto Rico.

His extended family still lives there. As a child he would visit Vega Alta, his family home in the summer.

One of the local economic institutions is VegaCoop, a credit union. (

The credit union was founded by Ignacio Miranda, the great grandfather of Lin Miranda.

It is one aspect of credit unions’ presence in Puerto Rico. Over 100 of these locally chartered cooperatives are regulated and overseen by COSSEC.

There are 7 NCUA chartered credit unions* with headquarters in Puerto Rico providing banking services from 33 branch office locations as of January 2021. These federal credit unions have a total of 90,209 members with over $935 million assets. Finally, there are branches of US based credit unions such as Baxter (BCU) with full operations.

The Miranda Influence

The story of Vega Alta, Miranda’s family, and the economic problems in Puerto Rica are summarized in this NBC news story from 2016. It includes a clip of a school children performing one of the songs from the musical.

Hurricane Maria devastated the U.S. territory on Sept. 20, 2017, ultimately killing at least 2,975 people; it was the deadliest U.S.-based natural disaster in 100 years.

Over 200,000 Puerto Ricans left for the mainland, many temporarily and some permanently. Island residents had no full power for almost a year. The health system was overwhelmed, and an understaffed forensics sciences department couldn’t keep up with the bodies piling up. Not much progress has been made since.

Puerto Rico’s Economic Plight

Lin-Manuel began advocating for Island relief in the form of a restructuring of Puerto Rico’s $70 billion debt in 2016.

“I write plays. I am an artist. I figure out what words rhyme. I never asked for this role,” said Lin-Manuel, “I don’t know what else to do when your people are suffering and you have a giant light on you. All you want to do is just take the light and reflect it on them,” as he described his strong ties to the Island.

The Credit Union Opportunity

The Island’s circumstances have only worsened since these financial and natural disasters. The question: is there a way for credit unions or leagues to partner with the Puerto Rico credit union system and strengthen the cooperative self-help economic model? And invite Lin Manuel Miranda’s participation?


*Seven Puerto Rico FCU’s at September 30, 2020

Rank State Name assets
1 PR Caribe $483,643,621
2 PR VAPR $233,042,199
3 PR Puerto Rico $166,796,050
4 PR Universal Coop $27,950,406
5 PR Borinquen Community $16,249,885
6 PR Glamour $4,245,800
7 PR Puerto Rico Employee Groups $3,343,064
Totals for 7 institutions $935,271,025