Category: NCUA

Posted on

The Entrepreneurs: Attracting the Next Cohort of Credit Union Leaders

Every business from Coca-Cola to Ford Motors faces the same marketplace reality. How does successfully serving one generation of customers transition to the next? Will consumers have the same tastes? Have the same transportation needs? Respond to similar messages?

At the George Washington University’s New Venture Competition, the guest speaker portrayed a different challenge in attracting today’s students.

Tim Hwang graduated from Princeton in 2013 and is today the CEO of Fiscal Notes a technology application for select areas of legal case research.

He described his age as the entrepreneurial generation. Students across the country are demonstrating widespread interest in building startups to change the status quo.

Today major universities see this student interest. From Ivy league schools to smaller liberal arts, university administrations are sponsoring new ventures and rewarding winning startups with cash prizes and offers of future help.

A sample of winners from GW’s recent contest are illuminating, even inspiring. From the winners list students are creating technology, engineering, social, and network business startups serving almost every area of society.

I was aware of this growing university commitment because one year earlier a group of freshmen who wanted to start a credit union for GW students, became one of the nine finalists out of hundreds of startup proposals in the new competition final.

These students have significant faculty and formal university endorsement. They have researched and met with numerous credit union vendors willing to help, often at little or no initial expense.

The most difficult part is the regulatory approval. They plan to spend the next three years of their college careers to this startup, and then leave it as a legacy for future students.

In addition to specific capital requirements, NCUA’s drawn out, detailed approval schedule would discourage even the most gung-ho organizers.

In the last decade there have been fewer than ten new charters. If this is the pace of new entries, will the cooperative model miss recruiting this generation of members?

As a member does your credit union actively serve startups? How does it encourage entrepreneurs of all ages seeking to create new solutions for their communities?

The questions are important. For the mindset to seek out and encourage member innovators, may be an important indicator of management’s ability to renew the credit union’s organizational design.

Posted on

A Black Hole

Astronomers capture first image of a black hole

In a worldwide scientific collaboration, scientists were able to create a picture of a black hole using a network of telescopes around the globe.

The discovery raises up questions about conventional physics and previous explanations of the evolution of the universe.

The photo below shows the dark center inside the ring where matter and light are wrapped.

Astronomers capture first image of a black hole
Credit: Event Horizon Telescope collaboration et al. via nsf.gov

However, for credit unions this first ever picture of a black hole was hardly unique. In fact, the cooperative system has been seeing black holes with ever increasing regularity.

On March 29, 2019, the most recent documentation of a black hole was released by the Inspector General’s office showing a black hole of at least $770 million dollars.

This observation was the latest in a series of IG observations going back as far as 2008. See:

  • Material Loss Review of Chester Upland School Employees, O P S EMP, Electrical Inspectors, Triangle Interests % Service Center, Cardozo Lodge, and Servco Federal Credit Unions (2/23/2017)
  • Material Loss Review of Telesis Community Credit Union (3/15/2013)
  • Material Loss Review of Southwest Corporate Federal Credit Union (9/22/2011)
  • Material Loss Review of St. Paul Croatian Federal Credit Union (10/7/2010)
  • Material Loss Review of Norlarco Credit Union (5/11/2009)

Unlike the astronomical black hole most recently observed that “open up questions for scientists to explore about deep fundamental physics and the explanations offered by theories of general relativity and quantum physics, NCUA’s black holes are more readily understood.

The black holes in the NCUSIF’s balance sheet stem from a continuing weakness in transparency and accountability in the Board’s oversight of NCUA. Although the causes are clearly understood there is no indication that these are being addressed. The only question is how many more black holes will be discovered in the future?